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


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                -----------------

                                   FORM 10 - Q
                                -----------------

                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934.

                  For the quarterly period ended June 30, 2005

                                    000-18122
                                    ---------
                            (Commission File Number)

                          ARC Wireless Solutions, Inc.
                          ----------------------------
             (Exact name of registrant as specified in its charter)

               Utah                                            87-0454148
               ----                                            ----------
 (State or other jurisdiction of                              (IRS Employer
          incorporation)                                  Identification Number)

                             10601 West 48th Avenue
                       Wheat Ridge, Colorado, 80033-2660
                       ---------------------------------
           (Address of principal executive offices including zip code)

                                 (303) 421-4063
                                 --------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
                                 --------------
          (Former Name or Former Address, 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 Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes   X    No
    -----     -----

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes ____     No __X__
                -----

As of August 1, 2005, the Registrant had 154,286,173 shares outstanding of its
$.0005 par value common stock.

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


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

                          ARC Wireless Solutions, Inc.

                          Quarterly Report on FORM 10-Q

                       For The Period Ended June 30, 2005

                                Table of Contents

                                                                        Page No.

                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Balance Sheets as of June 30, 2005
            (unaudited) and December 31, 2004................................3

         Consolidated Statements of Operations for the
            Three Months and Six Months Ended
            June 30, 2005 and 2004 (unaudited)...............................4

         Consolidated Statements of Cash Flows for the Six Months Ended
            June 30, 2005 and 2004 (unaudited)...............................5

         Notes to Consolidated Financial Statements..........................6

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations...............................................13

Item 3.  Quantitative and Qualitative Disclosures About Market Risk..........18

Item 4.  Controls and Procedures.............................................18


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings...................................................19

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds ........19

Item 6.  Exhibits............................................................19


Signatures...................................................................19

Exhibit 31.1.................................................................20

Exhibit 32.1.................................................................22

                                       2
<PAGE>


Part I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                          ARC Wireless Solutions, Inc.
                           Consolidated Balance Sheets

                                                     June 30,       December 31,
                                                       2005            2004
Assets                                              (unaudited)         *
Current assets:
   Cash and equivalents                            $    698,000    $    321,000
   Accounts receivable - trade, net                   4,191,000       4,145,000
   Accounts receivable - vendors, net                   339,000         688,000
   Inventory, net                                     4,397,000       5,624,000
   Other current assets                                 400,000         209,000
                                                   ----------------------------
Total current assets                                 10,025,000      10,987,000
                                                   ----------------------------

Property and equipment, net                             441,000         527,000
                                                   ----------------------------

Other assets:
   Goodwill, net                                     10,824,000      10,824,000
   Intangible assets, net                               107,000         113,000
   Deposits                                              68,000          42,000
                                                   ----------------------------
Total assets                                       $ 21,465,000    $ 22,493,000
                                                   ============================

Liabilities and stockholders' equity
Current liabilities:
   Accounts payable                                $  3,377,000    $  2,253,000
   Bank debt - current                                1,690,000         493,000
   Accrued expenses                                     612,000         890,000
   Current portion of capital lease obligations          55,000          62,000
                                                   ----------------------------
Total current liabilities                             5,734,000       3,698,000

Capital lease obligations, less current portion          67,000          90,000
Bank debt, less current portion                          42,000       3,243,000
                                                   ----------------------------
Total liabilities                                     5,843,000       7,031,000
                                                   ----------------------------

Commitments
Stockholders' equity:
   Common stock                                          78,000          78,000
   Preferred stock                                                        --
   Additional paid-in capital                        21,758,000      21,704,000
   Treasury stock                                    (1,195,000)     (1,195,000)
   Accumulated deficit                               (5,019,000)     (5,125,000)
                                                   ----------------------------
Total stockholders' equity                           15,622,000      15,462,000
                                                   ----------------------------
Total liabilities and stockholders' equity         $ 21,465,000    $ 22,493,000
                                                   ============================

* These numbers were derived from the audited financial statements for the year
ended December 31, 2004.

 See accompanying notes.
                                       3

<PAGE>

<TABLE>
<CAPTION>

                                                    ARC Wireless Solutions, Inc.
                                              Consolidated Statements of Operations


                                                         Three months ended June 30,           Six Months Ended June 30,
                                                          2005               2004              2005               2004
                                                     ---------------------------------------------------------------------
                                                                (unaudited)                          (unaudited)

<S>                                                  <C>                <C>                <C>                <C>
Sales, net                                           $  8,634,000       $  9,952,000       $ 17,658,000       $ 17,186,000
Cost of sales                                           6,800,000          8,184,000         14,412,000         14,060,000
                                                     ---------------------------------------------------------------------
      Gross profit                                      1,834,000          1,768,000          3,246,000          3,126,000
                                                     ---------------------------------------------------------------------

Operating expenses:
   Selling, general and administrative expenses         1,587,000          1,492,000          3,172,000          2,775,000
                                                     ---------------------------------------------------------------------
Total operating expenses                                1,587,000          1,492,000          3,172,000          2,775,000
                                                     ---------------------------------------------------------------------
      Income from operations                              247,000            276,000             74,000            351,000

Other income (expense):
   Interest expense, net                                  (72,000)           (79,000)          (141,000)          (146,000)
   Other income                                            40,000            134,000            188,000            215,000
                                                     ---------------------------------------------------------------------
      Total other income (expense)                        (32,000)            55,000             47,000             69,000
                                                     ---------------------------------------------------------------------
Income before income taxes                                215,000            331,000            121,000            420,000

Provision for income taxes                                 (8,000)            (7,000)           (15,000)           (15,000)
                                                     ---------------------------------------------------------------------
Net Income                                           $    207,000       $    324,000       $    106,000       $    405,000
                                                     =====================================================================

                                                     =====================================================================
Net income per share - basic                         $       .001       $       .002       $       .001       $       .003
                                                     =====================================================================
Net income per share - diluted                       $       .001       $       .002       $       .001       $       .003
                                                     =====================================================================

See accompanying notes.

                                                               4
<PAGE>


                                            ARC Wireless Solutions, Inc.
                                       Consolidated Statements of Cash Flows


                                                                            Six months ended June 30,
                                                                            2005                  2004
                                                                       ----------------------------------
                                                                                   (unaudited)
Operating activities
Net income                                                             $   106,000            $   405,000
Adjustments to reconcile net income to net cash
provided by Operating activities:
     Depreciation and amortization                                         130,000                115,000
      Provision for doubtful accounts                                      136,000                108,000
     Non-cash expense for issuance of stock and options                     (3,000)                 1,000
     Changes in operating assets and liabilities:
       Accounts receivable, trade and vendor                               167,000               (263,000)
       Inventory                                                         1,227,000               (250,000)
       Prepaids and other current assets                                  (191,000)              (140,000)
          Other assets                                                     (26,000)                (2,000)
       Accounts payable and accrued expenses                               903,000                723,000
                                                                       ----------------------------------
Net cash provided by operating activities                                2,449,000                697,000
                                                                       ----------------------------------

Investing activities
Patent acquisition costs                                                    (1,000)               (10,000)
Purchase of plant and equipment                                            (37,000)               (60,000)
                                                                       ----------------------------------
Net cash used in investing activities                                      (38,000)               (70,000)
                                                                       ----------------------------------

Financing activities
Repayment of line of credit and capital lease obligations               (2,034,000)              (139,000)
Net borrowings under lines of credit and other debt                           --                     --
                                                                       ----------------------------------
Net cash used in financing activities                                   (2,034,000)              (139,000)
                                                                       ----------------------------------

Net increase in cash                                                       377,000                488,000
Cash, beginning of period                                                  321,000                227,000
                                                                       ----------------------------------
Cash, end of period                                                    $   698,000            $   715,000
                                                                       ==================================

Supplemental cash flow information:
  Cash paid for interest                                               $   141,000            $   174,000
  Equipment acquired under capital lease                                      --              $    52,000
   Issuance of common stock for accrued 401(k) employer matching       $    57,000                   --
 contribution
</TABLE>


See accompanying notes.

                                                         5
<PAGE>


                          ARC Wireless Solutions, Inc.
                   Notes to Consolidated Financial Statements
                                  June 30, 2005

Note 1.  Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
for interim financial information and pursuant to the rules and regulations of
the Securities and Exchange Commission. Accordingly, they do not include all of
the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. In the opinion
of management, all adjustments considered necessary for a fair presentation have
been included. For further information, refer to the financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2004.

The Company operates in three business segments, which are identified as
distribution, manufacturing and cable, offering a wide variety of wireless
component and network solutions to service providers, systems integrators, value
added resellers, businesses and consumers, primarily in the United States.

Operating results for the three months and six months ended June 30, 2005 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 2005 or any future period.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates and such
differences may be material to the financial statements

Consolidation Policy

The accompanying unaudited consolidated financial statements include the
accounts of ARC Wireless Solutions, Inc. ("ARC") and its wholly-owned subsidiary
corporations, Winncom Technologies Corp. ("Winncom") and Starworks Wireless Inc.
("Starworks"), since their respective acquisition dates, after elimination of
all material intercompany accounts, transactions, and profits.

Stock Based Compensation

The Company has elected to follow APB Opinion No. 25 and related interpretations
in accounting for its stock options and grants since the alternative fair market
value accounting provided for under Statement of Financial Accounting Standards
(SFAS) No. 123 requires use of grant valuation models that were not developed
for use in valuing employee stock options and grants. Under APB Opinion No. 25,
if the exercise price of the Company's stock options and grants equals or
exceeds the fair value of the underlying stock on the date of grant, no
compensation expenses are recognized.

                                       6
<PAGE>


If compensation cost for the Company's stock-based compensation plans had been
determined based on the fair value at the grant dates for awards under those
plans consistent with the method of SFAS No. 123, then the Company's net income
(loss) and per share amounts for the three months and six months ended June 30,
2005 and 2004, respectively, would have been adjusted to the pro forma amounts
indicated below:
<TABLE>
<CAPTION>

                                                  Three Months Ended June 30              Six Months Ended June 30
                                                    2005               2004               2005              2004
                                                 ------------------------------------------------------------------

<S>                                              <C>                <C>                <C>                <C>
Net income (loss) as reported                    $ 207,000          $ 324,000          $ 106,000          $ 405,000
Add:  stock based  compensation
 included in reported  net income (loss)              --                 --                 --                 --
Deduct: Stock-based compensation cos
 under SFAS No. 123
                                                   (12,000)            (2,000)           (16,000)            (8,000)
                                                 ------------------------------------------------------------------
Pro forma net income (loss)                      $ 195,000          $ 322,000          $  90,000          $ 397,000
                                                 ==================================================================

Pro forma basic and diluted net
 income (loss) per share:
Pro forma shares used in the  calculation
 of pro forma net income (loss) per
 common share- basic                           154,017,000        153,888,000        153,955,000        153,885,000
Pro forma shares used in the
 calculation of pro forma net
 income (loss) per common share- diluted       154,048,000        153,888,000        154,105,000        154,010,000
Reported net income (loss) per
 common share - basic and diluted                    $.001              $.002              $.001              $.003
Pro forma net income (loss) per
 common share - basic and diluted                    $.001              $.002              $.001              $.003
</TABLE>

Pro forma information regarding net loss is required by SFAS No. 123, which also
requires that the information be determined as if the Company had accounted for
grants subsequent to December 31, 1994 under a method specified by SFAS No. 123.
Options granted were estimated using the Black-Scholes valuation model. The
following weighted average assumptions were used:

  ------------------------------------------------------------------------------
                                      Three and Six Months  Three and Six Months
                                              Ended                Ended
                                          June 30, 2005        June 30, 2004
  ------------------------------------------------------------------------------
  Volatility                                   1.024                .87
  ------------------------------------------------------------------------------
  Expected life of options (in years)            2-3                  2
  ------------------------------------------------------------------------------
  Dividend Yield                                  0%                 0%
  ------------------------------------------------------------------------------
  Risk free interest rate                      4.00%               2.25%
  ------------------------------------------------------------------------------

                                       7

<PAGE>


Note 2. Earnings Per Share

SFAS 128 provides for the calculation of Basic and Diluted earnings (loss) per
share. Basic earnings (loss) per share includes no dilution and is computed by
dividing income available to common stockholders by the weighted average number
of common shares outstanding for the period. Diluted earnings (loss) per share
reflects the potential dilution of securities that could share in the earnings
of the entity.

The following table represents a reconciliation of the shares used to calculate
basic and diluted earnings per share for the respective periods indicated:
<TABLE>
<CAPTION>

                                             Three Months Ended  Three Months Ended Six Months Ended    Six Months Ended
                                                June 30, 2005      June 30, 2004     June 30, 2005      June 30, 2004
                                                -------------      -------------     -------------      -------------
<S>                                          <C>                    <C>                <C>             <C>
Numerator: Net Income (Loss)                 $       207,000       $   324,000        $   106,000       $      405,000
                                             =========================================================================
Denominator:
Denominatorfor basic earnings per
share - weighted average shares
                                                 154,017,000       153,888,000        153,955,000          153,885,000
Effect of dilutive securities
  Employee stock options                              31,000              --              150,000              125,000
  Common stock warrants                                 --                --                 --                   --
                                             -------------------------------------------------------------------------
Denominator for diluted earnings per
share -- adjusted weighted average
shares and assumed conversion
                                                 154,048,000       153,888,000        154,105,000          154,010,000
                                             =========================================================================

Basic earnings (loss) per share              $          .001       $      .002        $      .001        $        .003
                                             =========================================================================

Diluted earnings (loss) per share            $          .001       $      .002        $      .001        $        .003
                                             =========================================================================
</TABLE>

Note 3.  Inventory

Inventory is valued at the lower of cost or market using standard costs that
approximate average cost. Inventories are reviewed periodically and items
considered to be slow-moving or obsolete are reduced to estimated net realizable
value through an appropriate reserve. Inventory consists of the following:

                                            June 30,         December 31,
                                         ---------------------------------
                                              2005               2004
                                         --------------------------------

     Raw materials                       $   912,000          $   917,000
     Work in progress                        128,000              112,000
     Finished goods                        4,140,000            5,307,000
                                         -----------          -----------
                                           5,180,000            6,336,000
     Inventory reserve                      (783,000)            (712,000)
                                         -----------          -----------
     Net inventory                       $ 4,397,000          $ 5,624,000
                                         ===========          ===========

                                       8

<PAGE>


Note 4.  Revolving Bank Loan Agreements and Notes Payable

On October 1, 2003 our subsidiary Winncom, executed a new $4,000,000
line-of-credit agreement with a bank with interest at prime plus .5% (6.75% at
June 30, 2005) due April 30, 2006 and converted $500,000 of the balance
outstanding under the line of credit at September 30, 2003 into a 36-month term
loan with monthly principal payments of $13,888 plus interest at prime plus .75%
(7.0% at June 30, 2005). The term loan will become due on October 26, 2006.

The agreement contains several covenants, which, among other things, require
that Winncom maintain certain financial ratios as defined in the line-of-credit
agreement. In addition, the agreement limits the payment of management fees by
Winncom to the Company, and also limits dividends and the purchase of property
and equipment. As of June 30, 2005 Winncom was in compliance with these
covenants.


We entered into a financing agreement (the "WFBC Facility") with Wells Fargo
Business Credit, Inc. ("WFBC"), on December 9, 2003. The financing agreement was
for a term of one year and was renewable for additional one-year terms. The WFBC
Facility provided for the sale of accounts receivable by the Company to WFBC at
a 1% discount for the first 15 days and an additional .055 of 1% per day until
the account receivable is paid in full. Sales of accounts receivable and
advances under the WFBC Facility were subject to conditions and restrictions,
including, without limitation, accounts receivable eligibility restrictions,
verification, and approval. Obligations under the WFBC Facility were
collateralized by substantially all of the assets of the Company. Advances under
the WFBC Facility were made at the sole discretion of WFBC, even if the accounts
receivable offered by ARC for sale to WFBC satisfied all necessary conditions
and restrictions. WFBC was under no obligation to purchase accounts receivable
from the Company or to advance any funds or credit to the Company under the WFBC
Facility. This financing agreement was terminated on May 10, 2005.

On May 10, 2005 the Company entered into a new $1.5 million revolving
line-of-credit agreement (the "Credit Facility") with Citywide Banks. The new
Credit Facility has a maturity of one year, with interest at 2% over prime
(8.25% at June 30, 2005), contains covenants to maintain certain financial
statement ratios, and is collateralized by essentially all of the assets of ARC
Wireless Solutions, Inc ("ARC") and its wholly owned subsidiary, Starworks
Wireless Inc.("Starworks"), but excluding Winncom Technologies Corp.. The
borrowing base will be calculated on a percentage of trade accounts receivable
and inventory for ARC and Starworks combined. As of June 30, 2005 ARC was in
compliance with these covenants.

Revolving bank lines-of-credit and other bank debt at June 30, 2005 and December
31, 2004 were:

                                                   June 30,         December 31,
                                                 -------------------------------
                                                     2005              2004
                                                 -------------------------------
    Bank line-of-credit - Winncom                $   969,000        $ 3,118,000
    Bank term loan - Winncom                         208,000            292,000
    Bank line-of-credit - ARC                        555,000            326,000
                                                 ------------------------------
                                                   1,732,000          3,736,000
    Less current portion                          (1,690,000)          (493,000)
                                                 ------------------------------
    Long-term portion                            $    42,000        $ 3,243,000
                                                 ==============================

Note 5.  Equity Transactions

For the quarter ended March 31, 2004, the Company recorded the issuance of 4,790
shares of common stock to directors for outstanding obligations for accrued
directors' fees in the amount of $750.

For the quarter ended June 30, 2004, the Company recorded the issuance of 1,785
shares of common stock to directors for outstanding obligations for accrued
directors' fees in the amount of $250.

                                       9

<PAGE>


For the quarter ended March 31, 2005, the Company recorded the issuance of 3,332
shares of common stock to directors for outstanding obligations for accrued
directors' fees in the amount of $500. In addition, during the quarter ended
March 31, 2005, 120,000 shares of common stock were returned to the Company in
settlement of a dispute regarding shares issued for consulting fees in 2001.Of
the 120,000 shares of common stock returned to the Company, 100,000 have
previously been recorded as cancelled in 2002 as a result of the early
termination of a consulting agreement in September 2002.

In May 2005 the Company contributed 407,488 shares of common stock, valued at
$57,000, into the ARC Wireless Solutions, Inc. 401(k) Plan as an employer
matching contribution for the Plan year 2004.

Note 6.  Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment," which
is a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No.
123(R) is effective for the Company beginning January 1, 2006, supersedes APB
Opinion No. 25, Accounting for Stock Issued to Employees, and amends SFAS No.
95, Statement of Cash Flows.

SFAS No. 123(R) requires all share-based payments to employees, including grants
of employee stock options, to be recognized in the income statement based on
their fair values. Pro-forma disclosure is no longer an alternative. The Company
has not yet completed its evaluation of the effect of SFAS No. 123(R) but
expects its adoption to have an effect on the financial statements similar to
the pro-forma effects reported in Note 1 to the Consolidated Financial
Statements under the caption above "Stock Based Compensation".

In November 2004, the FASB issued SFAS No. 151, Inventory Costs, which revised
ARB 43, relating to inventory costs. This revision is to clarify the accounting
for abnormal amounts of idle facility expense, freight, handling costs and
wasted material (spoilage). This Statement requires that these items be
recognized as a current period charge regardless of whether they meet the
criterion specified in ARB 43. In addition, this Statement requires the
allocation of fixed production overheads to the costs of conversion be based on
normal capacity of the production facilities. SFAS No. 151 is effective for
inventory costs incurred during fiscal years beginning after June 15, 2005. The
Company does not believe the adoption of SFAS No. 151 will have a material
impact on the Company's financial statements.

The FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, which changes the
guidance in APB Opinion 29, Accounting for Nonmonetary Transactions. This
Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges
of similar productive assets and replaces it with a general exception for
exchanges of nonmonetary assets that do not have commercial substance. A
nonmonetary exchange has commercial substance if the future cash flows of the
entity are expected to change significantly as a result of the exchange. SFAS
No. 153 is effective during fiscal years beginning after June 15, 2005. The
Company does not believe the adoption of SFAS No. 153 will have a material
impact on the Company's financial statements.

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections." SFAS No. 154 requires restatement of prior periods' financial
statements for changes in accounting principle, unless it is impracticable to
determine either the period-specific effects or the cumulative effect of the
change. Also, SFAS No. 154 requires that retrospective application of a change
in accounting principle be limited to the direct effects of the change. SFAS No.
154 is effective for accounting changes and corrections of errors made in fiscal
years beginning after December 15, 2005.

                                       10
<PAGE>


Note 7.  Industry Segment Information

SFAS No. 131 "Disclosure about Segments of an Enterprise and Related
Information" requires that the Company disclose certain information about its
operating segments where operating segments are defined as components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. Generally, financial
information is required to be reported on the basis that is used internally for
evaluating segment performance and deciding how to allocate resources to
segments.

The Company has three reportable segments that are separate business units that
offer different products as follows: distribution of wireless communications
products, antenna manufacturing and cable products. Each segment consists of a
single operating unit and the accounting policies of the reporting segments are
the same as those described in the summary of significant accounting policies.
Intersegment sales and transfers are recorded at cost plus an agreed upon
intercompany profit on intersegment sales and transfers.

Financial information regarding the Company's three operating segments for the
three months and six months ended June 30, 2005 and 2004 are as follows:

Three months Ended June 30, 2005 and 2004
<TABLE>
<CAPTION>

                                         Distribution      Manufacturing        Cable         Corporate        Total
                                         ------------------------------------------------------------------------------

<S>                        <C>            <C>                 <C>              <C>              <C>           <C>
Net Sales                  2005           6,943,000           1,677,000        100,000          (86,000)      8,634,000
                           2004           8,215,000           1,719,000        115,000          (97,000)      9,952,000

Net Earnings (Loss)        2005             143,000             284,000         (4,000)        (216,000)        207,000
                           2004             285,000             291,000        (12,000)        (240,000)        324,000

Earnings (Loss) before     2005             151,000             284,000         (4,000)        (216,000)        215,000
Income Taxes               2004             292,000             291,000        (12,000)        (240,000)        331,000

Identifiable Assets        2005          19,714,000           3,190,000        183,000       (1,622,000)     21,465,000
                           2004          21,577,000           3,470,000        348,000       (1,613,000)     23,782,000

Six months Ended June 30, 2005 and 2004

                                        Distribution       Manufacturing       Cable          Corporate        Total
                                        -------------------------------------------------------------------------------

Net Sales                  2005          14,881,000           2,769,000        161,000         (153,000)     17,658,000
                           2004          13,842,000           3,325,000        192,000         (173,000)     17,186,000

Net Earnings (Loss)        2005             268,000             256,000        (16,000)        (402,000)        106,000
                           2004             378,000             462,000        (25,000)        (410,000)        405,000

Earnings (Loss) before     2005             283,000             256,000        (16,000)        (402,000)        121,000
Income Taxes               2004             393,000             462,000        (25,000)        (410,000)        420,000

Identifiable Assets        2005          19,714,000           3,190,000        183,000       (1,622,000)     21,465,000
                           2004          21,577,000           3,470,000        348,000       (1,613,000)     23,782,000
</TABLE>


Corporate represents the operations of the parent Company, including segment
eliminations.

                                       11

<PAGE>


Approximately $2.9 million or 16.4% of the sales for the six months ended June
30, 2005 and approximately $2.3 million or 13.4% of the sales for the six months
ended June 30, 2004 represented foreign sales in Eastern Europe which includes
Russia, Kazakhstan and Uzbekistan.

Note 8.  Commitments and Contingencies

On May 9, 2005, the Export Import Bank of the United States ("Ex-Im Bank") Board
of Directors approved the majority of the financing for a project awarded to
Winncom Technologies Corp. ("Winncom") for the development of a modern
telecommunications infrastructure to be located on the left bank of the City of
Astana, Kazakhstan. The Ex-Im Bank is the official export credit agency of the
United States. Ex-Im Bank's mission is to assist in financing the export of U.S.
goods and services to international markets.

In October 2004, Winncom, a wholly owned subsidiary of ARC Wireless Solutions,
Inc., entered into a "Frame" Agreement (Agreement of Understanding) with Joint
Stock Company Kazakhtelecom ("Kazakhtelecom"), Kazakhstan's national
telecommunications operator for the Republic of Kazakhstan, that gives Winncom
the right, subject to Winncom obtaining 100% financing for the project upon
terms and conditions acceptable to Kazakhtelecom, and subject to a number of
other matters, to undertake, on a turnkey basis, development of a modern
telecommunications infrastructure to be located on the left bank of the City of
Astana, Kazakhstan. With several competing bids, Winncom was awarded the
contract after several months of negotiations. The total cost of the project is
for a total of $54,945,700.

As of June 30, 2005, Kazakhtelecom has not approved the terms from Ex-Im Bank
for the majority of the project financing, and Winncom has no commitments for
the additional financing to be able to undertake the project. If Winncom is able
to obtain the full amount of the financing, Winncom will be paid on a pro-rata
basis by Kazakhtelecom after Kazakhtelecom enters into the appropriate
agreements with the financial institution(s) for the repayment of the funds to
the financial institution(s). Also, in order for Winncom to commence the
project, Kazakhtelecom must approve a work program and timeline to be submitted
by Winncom. This has not yet occurred. The project, if it commences, is expected
to take approximately 30 months from the date the work program and total
financing have been approved by Kazakhtelecom. This timeline may be delayed for
seasonal purposes due to inclement winter weather in Kazakhstan.

Although the financing is the only known obstacle at this time, there can be no
assurances that Winncom will be successful in securing the financing or in
meeting all of the other terms and conditions pursuant to the terms of the
Agreement to the extent that the financing for the project is secured.

As of June 30, 2005, Winncom has deferred approximately $50,000 in project costs
(site survey and engineering) because it believes the project will go forward..
If the project does not go forward Winncom will be required to expense these
deferred project costs.

On June 11, 2005, Proxim Corporation and its subsidiaries Proxim Wireless
Networks, Inc., Proxim International Holdings,Inc. and Wireless Home Corporation
(collectively, "Proxim") each filed voluntary petitions for relief under Chapter
11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the District of Delaware ("Bankruptcy Court"). Each
of these entities has indicated that it will continue to operate its business as
a "debtor-in-possession" under the jurisdiction of the Bankruptcy Court and in
accordance with the applicable provisions of the Bankruptcy Code and orders of
the Bankruptcy Court. Winncom Technologies Corp., a wholly-owned subsidiary of
ARC Wireless Solutions, Inc, is a distributor for Proxim Corporation, and Proxim
has represented a substantial portion of Winncom's product purchases over the
last few years.

On July 18, 2005, Proxim entered into an agreement to sell its assets to
Terabeam Wireless. The asset purchase agreement was approved by the U.S.
Bankruptcy Court for District of Delaware on July 20, 2005. Following that
approval, the parties addressed the other pre-closing issues and completed the
transaction on July 27, 2005. Under the terms of the asset purchase agreement,
Terabeam acquired and assumed most of the domestic and foreign operations of
Proxim for a cash purchase price of approximately $25,200,000, subject to
certain adjustments, liability assumptions, and deductions.

Due to the uncertainty leading up to and after Proxim's announcement of
bankruptcy and a pending sale of assets, Winncom's customers decreased orders of
Proxim equipment. Based on discussions with Proxim and Terabeam, Winncom expects

                                       12

<PAGE>


to see an eventual resumption of normal sales volumes of Proxim equipment.
Nevertheless, there can be no assurance that these product purchases will
continue to occur as expected.

Item 2.  Management's Discussion and Analysis of Results of Operations and
         Financial Condition

Results of Operations for the Three Month Ended June 30, 2005 and 2004

Sales were $8.6 million and $9.95 million for the three-month periods ended June
30, 2005 and 2004, respectively. The decrease in revenues comparing the three
months ended June 30, 2005 to the three months ended June 30, 2004 is primarily
attributable to a decrease in Winncom's revenues from $8.2 million for the
quarter ended June 30, 2004 to $6.9 million for the quarter ended June 30, 2005;
a slight decrease in revenues from the Wireless Communications Solutions
Division from $1.71 million for the quarter ended June 30, 2004 to $1.68 million
for the quarter ended June 30, 2005 and a slight decrease in Starworks' revenues
from $115,000 for the quarter ended June 30, 2004 to $100,000 for the quarter
ended June 30, 2005. As noted above, the decrease in revenue in the second
quarter of 2005 was attributable to Winncom's customers decreasing Proxim
equipment orders due to their concern related to the announcement by Proxim of
its bankruptcy and pending sales of assets, which was completed on July 27, 2005
(See Note 8 to the Consolidated Financial Statements).

Gross profit margins were 21.2% and 17.8% for the three-months ended June 30,
2005 and June 30, 2004, respectively. The increase in gross margin for the
quarter ended June 30, 2005 as compared to the quarter ended June 30, 2004 is
primarily the result of a larger percentage in revenues from the Wireless
Communications Solutions Division in relation to overall revenues. Products from
this division have a higher margin than the products of Winncom or Starworks.
For the quarter ended June 30, 2005, the Wireless Communications Solutions
Division sales accounted for 18.4% of total revenues compared to the quarter
ended June 30, 2004 in which the Wireless Communications Solutions Division
sales accounted for 16.3% of total revenues.

Selling, general and administrative expenses (SG&A) increased by $95,000 for the
three months ended June 30, 2005 compared to the three months ended June 30,
2004. SG&A as a percent of revenue increased from 15% for the three months ended
June 30, 2004 to 18.4% for the three months ended June 30, 2005. The increase in
SG&A from 2004 to 2005 is primarily attributable to increases in international
marketing costs and compensation (including commissions). Due to the potential
of wireless networking in international markets, Winncom has been increasing its
resources and marketing costs for its international markets. International costs
primarily include marketing, advertising, trade shows, travel and outside
services. Salaries and wages remain the largest component of SG&A, constituting
52% and 58% of the total for the quarters ended June 30, 2005 and 2004,
respectively. As of June 30, 2005, Winncom has deferred approximately $50,000 in
project costs (site survey and engineering) related to the Kazakhtelecom
project. If the project does not go forward Winncom will be required to expense
these deferred project costs.

Net interest expense was $72,000 for the three months ended June 30, 2005
compared to $79,000 for the three months ended June 30, 2004. The average
balance outstanding on the lines-of-credit and term loan was $1.9 million for
the quarter ended June 30, 2005 and $3.7 million for the quarter ended June 30,
2004, but the prime interest rate averaged 6% for the quarter ended June 30,
2005 compared to 4% for the quarter ended June 30, 2004. The Company reduced its
inventory and trade accounts payable by $1.2 million and $900,000 respectively
thereby reducing its average line-of-credit balance by $1.8million.

The Company had net income of $207,000 for the quarter ended June 30, 2005 as
compared to net income of $324,000 for the three months ended June 30, 2004.
Even though net sales were less in 2005 than in 2004, the Company had higher
margins and higher gross margin in 2005. The increase in gross margin of $66,000

                                       13

<PAGE>


was more than offset by an increase in SG&A of $95,000 and a reduction in other
income (consisting primarily of vendor early payment discounts due to improved
inventory turns and accounts receivable collections) of nearly $94,000 of which
$65,000 was a reduction in early payment discounts. Other income in 2004 also
included collection of a previously written off account receivable of $15,000.
The reduction in vendor early payment discounts was due to Winncom suspending
early payments to Proxim, its largest vendor (see Note 8 to the Consolidated
Financial Statements).

Results of Operations for the Six Months Ended June 30, 2005 and 2004

Sales were $17.66 million and $17.19 million for the six-month periods ended
June 30, 2005 and 2004, respectively. The slight increase in revenues comparing
the six months ended June 30, 2005 to the six months ended June 30, 2004 is
attributable to an increase in Winncom's revenues from $13.8 million for the six
months ended June 30, 2004 to $14.9 million for the six months ended June 30,
2005, offset by a decrease in revenues from the Wireless Communications
Solutions Division from $3.3 million for the six months ended June 30, 2004 to
$2.8 million for the six months ended June 30, 2005, and a slight decrease in
Starworks' revenues from $192,000 for the six months ended June 30, 2004 to
$161,000 for the six months ended June 30, 2005. Sales increased for the six
month period ending June 30, 2005 despite the decrease in revenue in the second
quarter of 2005 which was attributable to Winncom's customers decreasing Proxim
equipment orders due to their concern related to the announcement by Proxim of
its bankruptcy and pending sales of assets, which was completed on July 27, 2005
(See Note 8 to the Consolidated Financial Statements). Winncom's revenues in
2005 were boosted by a sale to a single customer of $1.4 million in the first
quarter of 2005. The decrease in revenues from the Wireless Communication
Solutions Division in 2005 compared to 2004 is primarily the result of
management's decision to withhold shipments and minimize the Company's risk to a
significant customer whose credit privileges were suspended due to delinquent
payments. The customer has announced a recapitalization of its company and
shipments commenced again in June of 2005.

Gross profit margins were 18.4% and 18.2% for the six-months ended June 30, 2005
and June 30, 2004, respectively. The slight increase in gross margin for the six
months ended June 30, 2005 as compared to the six months ended June 30, 2004 is
primarily the result of slightly higher margins at Winncom and the Wireless
Communications Solutions Division in 2005 as compared to 2004. For the six
months ended June 30, 2005, the Wireless Communications Solutions Division sales
accounted for 14.8% of total revenues compared to the six months ended June 30,
2004 in which the Wireless Communications Solutions Division sales accounted for
18.3% of total revenues.

Selling, general and administrative expenses (SG&A) increased by $397,000 for
the six months ended June 30, 2005 compared to the six months ended June 30,
2004. The increase in SG&A from 2004 to 2005 is primarily attributable to
increases in international marketing costs and compensation (including
commissions). Due to the potential of wireless networking in international
markets, Winncom has been increasing its resources and marketing costs for its
international markets. International costs primarily include marketing,
advertising, trade shows, travel and outside services. SG&A as a percent of
revenue increased from 16.1% for the six months ended June 30, 2004 to 18% for
the six months ended June 30, 2005. Salaries and wages remain the largest
component of SG&A, constituting 51.7% and 54% of the total for the six months
ended June 30, 2005 and 2004, respectively. As of June 30, 2005, Winncom has
deferred approximately $50,000 in project costs (site survey and engineering)
related to the Kazakhtelecom project. If the project does not go forward Winncom
will be required to expense these deferred project costs.

Net interest expense was $146,000 for the six months ended June 30, 2005
compared to $141,000 for the six months ended June 30, 2004. The average balance
outstanding on the line of credit and term loan was $3.7 million for the six
months ended June 30, 2004 and $2.4 million for the six months ended June 30,
2005, and the prime interest rate averaged 4% for the six months ended June 30,
2004 compared to 5.625% for the six months ended June 30, 2005. The reduction of
the average line-of-credit balance was primarily due to a $1.2 million reduction
in inventory and a $900,000 increase in trade accounts payable.

                                       14
<PAGE>


The Company had net income of $106,000 for the six months ended June 30, 2005 as
compared to net income of $405,000 for the six months ended June 30, 2004. Even
though net sales were slightly higher in 2005 than in 2004, the slight increase
in gross margin of $120,000 was more than offset by an increase in SG&A of
$397,000 and a reduction in other income (consisting primarily of vendor early
payment discounts due to improved inventory turns and accounts receivable
collections) of nearly $27,000. Other income in 2005 consisted of a gain on
sales of assets of $60,000 for which there was none in 2004 and in 2004 included
collection of a previously written off account receivable of $15,000. The
reduction in vendor early payment discounts of approximately $65,000 was due to
Winncom suspending early payments to Proxim, its largest vendor (see Note 8 to
the Consolidated Financial Statements).

Financial Condition

Net cash provided by operating activities was $2.4 million for the six months
ended June 30, 2005 compared to net cash provided by operating activities of
$697,000 for the six months ended June 30, 2004. The primary reasons for the
increase are a reduction of both inventory of $1.2 million and accounts
receivable of $420,000.

Net cash used in investing activities was $70,000 for the six months ended June
30, 2004 compared to $38,000 for the six months ended June 30, 2005, primarily
the result of expenditures for patents and equipment.

Net cash used by financing activities for the six months ended June 30, 2005 and
2004 is primarily the result of reductions in bank lines-of-credit though
reductions in inventory and accounts receivable.

The Company's working capital at June 30, 2005 was $4.3 million compared to $7.3
million at December 31, 2004. The most significant change in working capital
from December 31, 2004 to June 30, 2005 was the reclassification of the bank
line-of-credit of $970,000 from long term to current in the second quarter of
2005 due to the fact that it comes due April 30, 2006 and an increase in trade
accounts payable of $1.1 million. In addition, we had reductions of both
inventory of $1.2 million and accounts receivable of $420,000.

On October 1, 2003 our subsidiary Winncom, executed a new $4,000,000
line-of-credit agreement with a bank with interest at prime plus .5% (6.75% at
June 30, 2005) due April 30, 2006 and converted $500,000 of the balance
outstanding under the line-of-credit at September 30, 2003 into a 36-month term
loan with monthly principal payments of $13,888 plus interest at prime plus .75%
(7.0% at June 30, 2005). The term loan will become due on October 26, 2006.

The agreement contains several covenants, which, among other things, require
that Winncom maintain certain financial ratios as defined in the line-of-credit
agreement. In addition, the agreement limits the payment of management fees by
Winncom to the Company, and also limits dividends and the purchase of property
and equipment. As of June 30, 2005 Winncom was in compliance with these
covenants.


We entered into a financing agreement (the "WFBC Facility") with Wells Fargo
Business Credit, Inc. ("WFBC"), on December 9, 2003. The financing agreement was
for a term of one year and was renewable for additional one-year terms. The WFBC
Facility provided for the sale of accounts receivable by the Company to WFBC at
a 1% discount for the first 15 days and an additional .055 of 1% per day until
the account receivable is paid in full. Sales of accounts receivable and
advances under the WFBC Facility were subject to conditions and restrictions,
including, without limitation, accounts receivable eligibility restrictions,
verification, and approval. Obligations under the WFBC Facility were
collateralized by substantially all of the assets of the Company. Advances under
the WFBC Facility were made at the sole discretion of WFBC, even if the accounts
receivable offered by ARC for sale to WFBC satisfy all necessary conditions and
restrictions. WFBC was under no obligation to purchase accounts receivable from
the Company or to advance any funds or credit to the Company under the WFBC
Facility. This financing agreement was terminated on May 10, 2005.

On May 10, 2005 the Company entered into a new $1.5 million revolving line of
credit agreement (the "Credit Facility") with Citywide Banks. The new Credit
Facility has a maturity of one year, with interest at 2% over prime (8.25% at

                                       15
<PAGE>


June 30, 2005), with covenants to maintain certain financial statement ratios
and is collateralized by essentially all of the assets of ARC Wireless
Solutions, Inc ("ARC") and its wholly owned subsidiary Starworks Wireless
Inc.("Starworks"), but excluding Winncom Technologies Corp.. The borrowing base
will be calculated on a percentage of trade accounts receivable and inventory
for ARC and Starworks combined. As of June 30, 2005 ARC was in compliance with
these covenants.

Management believes that continued profitable operations, current working
capital and available borrowings on existing bank lines of credit, will be
sufficient to allow the Company to maintain its operations through December 31,
2005 and into the foreseeable future.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical fact included in this Quarterly Report,
including "Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operation", regarding our financial position, business strategy,
plans and objectives of our management for future operations and capital
expenditures, and other matters, other than historical facts, are
forward-looking statements. Although we believe that the expectations reflected
in such forward-looking statements and the assumptions upon which the
forward-looking statements are based are reasonable, we can give no assurance
that such expectations will prove to have been correct.

Additional statements concerning important factors that could cause actual
results to differ materially from our expectations are disclosed in the
following "Risk Factors" section and elsewhere in this Quarterly Report. In
addition, the words "believe", "may", "will", "when", "estimate", "continue",
"anticipate", "intend", "expect" and similar expressions, as they relate to the
Company, our business or our management, are intended to identify
forward-looking statements. All written and oral forward-looking statements
attributable to us or persons acting on our behalf subsequent to the date of
this Quarterly Report are expressly qualified in their entirety by the following
Risk Factors. See the Company's Annual Report on Form 10-K for the year ended
December 31, 2004 for additional risk factors that could cause actual results to
differ materially from the Company's expectations.

Risk Factors

1.   We have a history of prior losses and there is no assurance that our
     operations will be profitable in the future. From inception in September
     1987 through the fiscal year ended December 31, 1992, and again for the
     years ended December 31, 1998 through the fiscal year ended December 31,
     2001 and for the fiscal year ended December 31, 2003, we incurred losses
     from operations. We operated profitably during each of the fiscal years
     ended December 31, 1993 through 1997 and again for the fiscal years ended
     December 31, 2002 and 2004. Profits for some of these years were marginal,
     and we cannot be assured that our operations in the future will be
     profitable. See the financial statements included in Item 14 of our Annual
     Report on Form 10-K.

2.   Our industry encounters rapid technological changes and there is no
     assurance that our research and development activities can timely lead to
     new and improved products when the market demands them. We do business in
     the wireless communications industries. This industry is characterized by
     rapidly developing technology. Changes in technology could affect the
     market for our products and necessitate additional improvements and
     developments to our products. We cannot predict that our research and
     development activities will lead to the successful introduction of new or
     improved products or that we will not encounter delays or problems in these
     areas. The cost of completing new technologies to satisfy minimum
     specification requirements and/or quality and delivery expectations may
     exceed original estimates that could adversely affect operating results
     during any financial period.

3.   We rely on the protection of patents and certain manufacturing practices to
     protect our product designs and there is no assurance that these measures
     will be successful. We attempt to protect our product designs by obtaining

                                       16

<PAGE>


     patents, when available, and by manufacturing our products in a manner that
     makes reverse engineering difficult. These protections may not be
     sufficient to prevent our competitors from developing products that perform
     in a manner that is similar to or better than our products. Competitors'
     successes may result in decreased margins and sales of our products.

4.   We have limited financial resources available that may restrict our ability
     to grow. Additional capital from sources other than our operating cash flow
     may be necessary to develop new products. We cannot predict that this
     financing will be available from any source.

5.   We face intense competition in our industry and there is no assurance that
     we will be able to adequately compete with our larger competitor. The
     communications and antenna industries are highly competitive, and we
     compete with substantially larger companies. These competitors have larger
     sales forces and more highly developed marketing programs as well as larger
     administrative staffs and more available service personnel. The larger
     competitors also have greater financial resources available to develop and
     market competitive products. The presence of these competitors could
     significantly affect any attempts to develop our business. However, we
     believe that we will have certain advantages in attempting to develop and
     market our products, including a more cost-effective technology, the
     ability to undertake smaller projects, and the ability to respond to
     customer requests more quickly than some larger competitors. We cannot be
     certain that these conclusions will prove correct.

6.   Our success depends on the availability of efficient labor and we cannot
     predict that we will continue to have access to this labor at an affordable
     cost. We produce and assemble our antenna and coaxial cable kit products at
     our own facilities and are dependent on efficient workers for these
     functions. We cannot predict that efficient workers will continue to be
     available to us at a cost consistent with our budget.

7.   The success of our business is highly dependent on key employees, some of
     whom do not have employment agreements with us. We are highly dependent on
     the services of our executive management, including Randall P. Marx, our
     Chief Executive Officer and Gregory E. Raskin, Winncom's CEO. The loss of
     the services of any of our executive management could have a material
     adverse effect on us.

8.   We may incur significant costs in complying with new governmental
     regulations which affect our industry, and this may require us to divert
     funds we use for the development of our business and product . We are
     subject to government regulation of our business operations in general.
     Certain of our products are subject to regulation by the Federal
     Communications Commission ("FCC") because they are designed to transmit
     signals. Because current regulations covering our operations are subject to
     change at any time, and despite our belief that we are in substantial
     compliance with government laws and regulations, we may incur significant
     costs for compliance in the future.

9.   Historically, there has been an extremely limited public market for our
     shares and we cannot predict that the recent trading volume will be
     sustained. Historically, there has been an extremely limited public market
     for our shares. We cannot predict that the recent trading volume will be
     sustained. The prices of our shares are highly volatile. Due to the
     relatively low price of the shares, many brokerage firms may not effect
     transactions and may not deal with low priced shares, as it may not be
     economical for them to do so. This could have an adverse effect on
     sustaining the market for our shares. Further, we believe it is improbable
     that any investor will be able to use our shares as collateral in a margin
     account. For the foreseeable future, trading in the shares, if any, will
     occur in the over-the-counter market and the shares will be quoted on the
     OTC Bulletin Board. On August 5, 2005, the low bid price for the common
     stock was $0.11, the high asked price was $0.11 and the closing sale price
     was $0.11. Because of the matters described above, a holder of our shares
     may be unable to sell shares when desired, if at all.

10.  We have not paid any cash dividends with respect to our shares, and it is
     unlikely that we will pay any cash dividends on our shares in the
     foreseeable future. We currently intend that any earnings that we may
     realize will be retained in the business for further development and
     expansion.

                                       17
<PAGE>


Other Risks. In addition, there are other risks, which if realized, in whole or
in part, could have a material adverse effect on our business, financial
condition and/or results of operations, including, without limitation:

     o    intense competition, regionally and internationally, including
          competition from alternative business models, such as
          manufacturer-to-end-user selling, which may lead to reduced prices,
          lower sales or reduced sales growth, lower gross margins, extended
          payment terms with customers, increased capital investment and
          interest costs, bad debt risks and product supply shortages;

     o    Termination of a supply or services agreement with a major supplier or
          customer or a significant change in supplier terms or conditions of
          sale;

     o    a downturn in economic conditions (particularly purchases of
          technology products) and failure to adjust costs in a timely fashion
          in response to a sudden decrease in demand;

     o    losses resulting from significant credit exposure to reseller
          customers and negative trends in their businesses;

     o    Reductions in credit ratings and/or unavailability of adequate
          capital;

     o    failure to attract new sources of business from expansion of products
          or services or entry into new markets;

     o    inability to manage future adverse industry trends;

     o    future periodic assessments required by current or new accounting
          standards resulting in additional charges; (See Note 6. Recent
          Accounting Pronouncements)

     o    the loss of a distribution agreement with a major supplier or the loss
          of a major supplier, such as Proxim Corporation, could have a material
          adverse impact on the business of Winncom.

We have instituted in the past and continue to institute changes in our
strategies, operations and processes to address these risk factors and to
mitigate their impact on our results of operations and financial condition.
However, no assurances can be given that we will be successful in these efforts.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

We have not used derivative financial instruments.

We are exposed to market risk through interest rates related to our notes
payable to the banks which has a variable interest rate equal to the existing
bank prime rate (6.25% as of June 30, 2005) plus one-half to two percent. The
prime interest rate increased from 4.0% to 6.25% since June 1, 2004 and has
increased by another 1.25% since January 1, 2005. An increase in the bank's
prime interest rates on the various notes payable by .5% would increase our
yearly interest expense by approximately $15,000, assuming borrowed amounts
remain outstanding at current levels. Our management believes that fluctuation
in interest rates in the near term will not materially affect our consolidated
operating results, financial position or cash flow

Item 4.  Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation,
under the supervision and with the participation of the principal executive
officer and principal financial officer, of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities

                                       18

<PAGE>


Exchange Act of 1934 (the "Exchange Act")). Based on this evaluation, our
principal executive officer and principal financial officer concluded that our
disclosure controls and procedures are effective to ensure that information
required to disclose in reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in Securities and Exchange Commission rules and forms. There was no change in
our internal control over financial reporting during our most recently completed
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.


                           PART II. OTHER INFORMATION

Item 1.   Legal Proceedings

We and our subsidiaries are involved in various legal proceedings of a nature
considered normal in the course of our operations, principally accounts
receivable collections. While it is not feasible to predict or determine the
final outcome of these proceedings, we have reserved as an allowance for
doubtful accounts for that portion of the accounts receivable which we estimate
will be uncollectible.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

On May, 2005, the Company contributed 407,488 shares of common stock valued at
$57,000, into the ARC Wireless Solutions, Inc. 401(k) Plan as an employere
matching contribution for the Plan year 2004. These shares were issued pursuant
to exemptions from registration set forth in Section 4(2) of the Securities Act
of 1933, as amended, and Regulation D promulgated thereunder.

Item 6.  Exhibits

         (a)      Exhibits.

         Exhibit No.               Description

         31.1 and 31.2     Certifications  of the Chief Executive  Officer and
                           Chief Financial Officer pursuant to Section 302
                           of the Sarbanes-Oxley Act of 2002

         32.1              Certifications  of Chief  Executive  Officer  and
                           Chief  Financial  Officer  pursuant  to 18 U.S.C.
                           Section 1350 as adopted pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002

                                   SIGNATURES

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

                                                ARC WIRELESS SOLUTIONS, INC.


Date:    August 11, 2005                        By:  /s/ Randall P. Marx
                                                     -------------------
                                                     Randall P. Marx
                                                     Chief Executive Officer

 Date:   August 11, 2005                        By:  /s/ Monty R. Lamirato
                                                     ---------------------
                                                     Monty R. Lamirato
                                                     Chief Financial Officer

                                       19