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

                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 September 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 Identification Number)
             incorporation)

                             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]

Indicate by check market whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]


<PAGE>


As of November 8, 2005, the Registrant had 154,295,000 shares outstanding of its
$.0005 par value common stock.

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
































                                        2
<PAGE>


                          ARC Wireless Solutions, Inc.

                          Quarterly Report on FORM 10-Q

                     For The Period Ended September 30, 2005

                                Table of Contents

                                                                        Page No.

                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Balance Sheets as of September 30, 2005
            (unaudited) and December 31, 2004.................................4

         Consolidated Statements of Operations for the Three Months and
            Nine Months Ended September 30, 2005 and 2004 (unaudited).........5

         Consolidated Statements of Cash Flows for the Nine Months Ended
            September 30, 2005 and 2004 (unaudited)...........................6

         Notes to Consolidated Financial Statements...........................7

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations................................................14

Item 3.  Quantitative and Qualitative Disclosures About Market Risk...........19

Item 4.  Controls and Procedures..............................................20


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings....................................................20

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds .........20

Item 6.  Exhibits.............................................................20

Signatures....................................................................21

Exhibit 31.1..................................................................22

Exhibit 32.1..................................................................24



                                        3
<PAGE>

Part I. FINANCIAL INFORMATION
Item 1. Financial Statements

                          ARC Wireless Solutions, Inc.
                           Consolidated Balance Sheets

                                                   September 30,    December 31,
                                                       2005             2004
Assets                                              (unaudited)           *
Current assets:
   Cash and equivalents                            $  1,329,000    $    321,000
   Accounts receivable - trade, net                   5,372,000       4,145,000
   Accounts receivable - vendors, net                   403,000         688,000
   Inventory, net                                     4,617,000       5,624,000
   Construction in progress                             131,000            --
   Other current assets                                 308,000         209,000
                                                   ------------    ------------
Total current assets                                 12,160,000      10,987,000
                                                   ------------    ------------

Property and equipment, net                             465,000         527,000
                                                   ------------    ------------

Other assets:
   Goodwill, net                                     10,824,000      10,824,000
   Intangible assets, net                               106,000         113,000
   Deposits                                              77,000          42,000
                                                   ------------    ------------
Total assets                                       $ 23,632,000    $ 22,493,000
                                                   ============    ============

Liabilities and stockholders' equity
Current liabilities:
   Accounts payable                                $  3,954,000    $  2,253,000
   Bank debt - current                                2,997,000         493,000
   Accrued expenses                                     694,000         890,000
   Current portion of capital lease obligations          55,000          62,000
                                                   ------------    ------------
Total current liabilities                             7,700,000       3,698,000

Capital lease obligations, less current portion          68,000          90,000
Bank debt, less current portion                            --         3,243,000
                                                   ------------    ------------
Total liabilities                                     7,768,000       7,031,000
                                                   ------------    ------------

Commitments
Stockholders' equity:
   Common stock                                          78,000          78,000
   Preferred stock                                         --              --
   Additional paid-in capital                        21,759,000      21,704,000
   Treasury stock                                    (1,195,000)     (1,195,000)
   Accumulated deficit                               (4,778,000)     (5,125,000)
                                                   ------------    ------------
Total stockholders' equity                           15,864,000      15,462,000
                                                   ------------    ------------
Total liabilities and stockholders' equity         $ 23,632,000    $ 22,493,000
                                                   ============    ============

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

See accompanying notes.

                                        4
<PAGE>
<TABLE>
<CAPTION>

                                          ARC Wireless Solutions, Inc.
                                     Consolidated Statements of Operations


                                                       Three Months Ended              Nine Months Ended
                                                          September 30,                  September 30,
                                                      2005            2004            2005            2004
                                                  ------------    ------------    ------------    ------------
                                                          (unaudited)                      (unaudited)
<S>                                               <C>             <C>             <C>             <C>
Sales, net                                        $ 11,016,000    $  9,495,000    $ 28,674,000    $ 26,681,000
Cost of sales                                        9,032,000       7,617,000      23,444,000      21,678,000
                                                  ------------    ------------    ------------    ------------
      Gross profit                                   1,984,000       1,878,000       5,230,000       5,003,000
                                                  ------------    ------------    ------------    ------------

Operating expenses:
   Selling, general and administrative expenses      1,682,000       1,581,000       4,853,000       4,355,000
                                                  ------------    ------------    ------------    ------------
Total operating expenses                             1,682,000       1,581,000       4,853,000       4,355,000
                                                  ------------    ------------    ------------    ------------
      Income from operations                           302,000         297,000         377,000         648,000

Other income (expense):
   Interest expense, net                               (52,000)        (73,000)       (193,000)       (219,000)
   Other income                                         28,000         119,000         216,000         334,000
                                                  ------------    ------------    ------------    ------------
      Total other income (expense)                     (24,000)         46,000          23,000         115,000
                                                  ------------    ------------    ------------    ------------
Income before income taxes                             278,000         343,000         400,000         763,000

Provision for income taxes                             (38,000)         (7,000)        (53,000)        (22,000)
                                                  ------------    ------------    ------------    ------------
Net Income                                        $    240,000    $    336,000    $    347,000    $    741,000
                                                  ============    ============    ============    ============


                                                  ============    ============    ============    ============
Net income per share - basic                      $       .002    $       .002    $       .002    $       .005
                                                  ============    ============    ============    ============
Net income per share - diluted                    $       .002    $       .002    $       .002    $       .005
                                                  ============    ============    ============    ============


See accompanying notes.





                                                       5
<PAGE>

                              ARC Wireless Solutions, Inc.
                         Consolidated Statements of Cash Flows


                                                                  Nine Months Ended
                                                                     September 30,
                                                                 2005            2004
                                                              -----------    -----------
                                                                     (unaudited)
Operating activities
Net income                                                    $   347,000    $   741,000
Adjustments to reconcile net income to net cash provided by
Operating activities:
     Depreciation and amortization                                173,000        178,000
     Provision for doubtful accounts                              227,000        167,000
     Non-cash expense for issuance of stock and options            (3,000)         1,000
     Changes in operating assets and liabilities:
       Accounts receivable, trade and vendor                   (1,169,000)        49,000
       Inventory                                                1,007,000       (978,000)
       Prepaids and other current assets                          (99,000)    (1,088,000)
       Construction in progress                                  (132,000)
       Other assets                                               (34,000)      (102,000)
       Accounts payable and accrued expenses                    1,562,000      1,493,000
                                                              -----------    -----------
Net cash provided by operating activities                       1,879,000        461,000
                                                              -----------    -----------

Investing activities
Patent acquisition costs                                           (4,000)       (14,000)
Purchase of plant and equipment                                   (83,000)       (94,000)
                                                              -----------    -----------
Net cash used in investing activities                             (87,000)      (108,000)
                                                              -----------    -----------

Financing activities
Repayment of line of credit and capital lease obligations         (45,000)      (188,000)
Net borrowings under lines of credit and other debt              (739,000)       120,000
                                                              -----------    -----------
Net cash used in financing activities                            (784,000)       (68,000)
                                                              -----------    -----------

Net increase in cash                                            1,008,000        285,000
Cash, beginning of period                                         321,000        227,000
                                                              -----------    -----------
Cash, end of period                                           $ 1,329,000    $   512,000
                                                              ===========    ===========

Supplemental cash flow information:
  Cash paid for interest                                      $   193,000    $   264,000
  Equipment acquired under capital lease                      $    17,000    $    52,000
   Issuance of common stock for accrued 401(k) employer
     matching contribution                                    $    57,000           --



See accompanying notes.

                                        6
</TABLE>
<PAGE>

                          ARC Wireless Solutions, Inc.
                   Notes to Consolidated Financial Statements
                               September 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 nine months ended September 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.

                                        7
<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 nine months ended
September 30, 2005 and 2004, respectively, would have been adjusted to the pro
forma amounts indicated below:
<TABLE>
<CAPTION>

                                               Three Months Ended September 30   Nine Months Ended September 30
                                                    2005             2004             2005             2004
                                               -------------    -------------    -------------    -------------
<S>                                            <C>              <C>              <C>              <C>
Net income (loss) as reported                  $     240,000    $     336,000    $     347,000    $     741,000
Add: stock based compensation included
in reported net income (loss)                           --               --               --               --
Deduct: Stock-based compensation cost
under SFAS No. 123                                   (17,000)         (37,000)         (21,000)         (43,000)
                                               -------------    -------------    -------------    -------------
Pro forma net income (loss)                    $     223,000    $     299,000    $     326,000    $     698,000
                                               =============    =============    =============    =============

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                                     154,288,000      153,888,000      154,067,000      153,886,000
Pro forma shares used in the calculation
of pro forma net income (loss) per common
share- diluted                                   154,288,000      153,926,000      154,167,000      153,982,000
Reported net income (loss) per common share
- basic and diluted                            $        .002    $        .002    $        .002    $        .005
Pro forma net income (loss) per common share
- basic and diluted                            $        .002    $        .002    $        .002    $        .005


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 Nine        Three Months         Nine Months
                                           Months Ended            Ended                Ended
                                        September 30, 2005   September 30, 2004   September 30, 2004
                                        ------------------   ------------------   ------------------
Volatility                                     1.24                 1.04              .87 - 1.04
Expected life of options (in years)             2-3                    2                       2
Dividend Yield                                   0%                   0%                      0%
Risk free interest rate                       4.00%                2.75%            2.25 - 2.75%


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.


                                       8
<PAGE>

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

                                    Three Months Ended   Three Months Ended   Nine Months Ended    Nine Months Ended
                                    September 30, 2005   September 30, 2004   September 30, 2005   September 30, 2004
                                    ------------------   ------------------   ------------------   ------------------

Numerator: Net Income (Loss)           $   240,000          $    336,000         $    347,000         $    741,000
                                       ===========          ============         ============         ============

Denominator:
Denominator for basic earnings per
share - weighted average shares        154,288,000           153,888,000          154,067,000          153,886,000
Effect of dilutive securities
  Employee stock options                      --                  38,000              100,000               96,000
  Common stock warrants                       --                    --                   --                   --
                                       -----------          ------------         ------------         ------------
Denominator for diluted earnings per
share - adjusted weighted average
shares and assumed conversion          154,288,000           153,926,000          154,167,000          153,982,000
                                       ===========          ============         ============         ============

Basic earnings (loss) per share        $      .002          $       .002         $       .002         $       .005
                                       ===========          ============         ============         ============

Diluted earnings (loss) per share      $      .002          $       .002         $       .002         $       .005
                                       ===========          ============         ============         ============
</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:

                                   September 30,   December 31,
                                   -------------   ------------
                                       2005            2004
                                    -----------    -----------
                Raw materials       $ 1,052,000    $   917,000
                Work in progress        127,000        112,000
                Finished goods        4,244,000      5,307,000
                                    -----------    -----------
                                      5,423,000      6,336,000
                Inventory reserve      (806,000)      (712,000)
                                    -----------    -----------
                Net inventory       $ 4,617,000    $ 5,624,000
                                    ===========    ===========


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% (7.25% at
September 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%
(7.5% at September 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 September 30, 2005 Winncom was in compliance with these
covenants.

                                       9
<PAGE>

In September 2005, Winncom entered into a one-year Line of Credit Agreement with
Kazkommertsbank for $2.3 million with an annual interest rate of 13% for the
purpose of funding a small portion of the Kazakhtelecom project described in
Note 8, specifically project engineering and laying of fiber optic cable and
telecommunication equipment purchases necessary to be completed before winter to
avoid project delays. The Line of Credit Agreement was only entered into after
Kazakhtelecom agreed to fully guaranty the repayment of Winncom's borrowings
under the Line of Credit Agreement. Kazakhtelecom will repay the Line of Credit
borrowings either from the proceeds of the permanent project financing noted in
Note 8 or from its own capital if the project financing does not go forward. In
September 2005, Winncom was advanced $1,036,000 under the Line of Credit
Agreement.

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
(8.75% at September 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 is calculated on a percentage of trade accounts receivable and
inventory for ARC and Starworks combined. As of September 30, 2005 ARC was in
compliance with these covenants.

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

                                              September 30,   December 31,
                                              ------------    -----------
                                                  2005            2004
                                               -----------    -----------
      Domestic Bank line-of-credit - Winncom   $ 1,268,000    $ 3,118,000
      Foreign Bank line-of-credit - Winncom      1,036,000           --
      Bank term loan - Winncom                     167,000        292,000
      Bank line-of-credit - ARC                    526,000        326,000
                                               -----------    -----------
                                                 2,997,000      3,736,000
      Less current portion                      (2,997,000)      (493,000)
                                               -----------    -----------
      Long-term portion                        $      --      $ 3,243,000
                                               ===========    ===========


Note 5. Equity Transactions

For the nine months ended September 30, 2004, the Company recorded the issuance
of 6,575 shares of common stock to directors for outstanding obligations for
accrued directors' fees in the amount of $1,000.

For the nine months ended September 30, 2005, the Company recorded the issuance
of 7,678 shares of common stock to directors for outstanding obligations for
accrued directors' fees in the amount of $1,000. 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
had previously been recorded as cancelled in 2002 as a result of the early
termination of a consulting agreement in September 2002.

                                        10
<PAGE>

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) which 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.

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.

                                       11
<PAGE>

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 nine months ended September 30, 2005 and 2004 are as follows:

Three Months Ended September 30, 2005 and 2004
<TABLE>
<CAPTION>

                                Distribution   Manufacturing     Cable       Corporate          Total
                                ------------------------------------------------------------------------
<S>                      <C>    <C>            <C>             <C>          <C>             <C>
Net Sales                2005   $  8,975,000   $  1,979,000    $ 131,000    $    (69,000)   $ 11,016,000
                         2004      7,906,000      1,631,000       86,000        (128,000)      9,495,000

Net Earnings (Loss)      2005        114,000        400,000       (7,000)       (267,000)        240,000
                         2004        423,000        212,000      (15,000)       (284,000)        336,000

Earnings (Loss) before   2005        131,000        420,000       (7,000)       (266,000)        278,000
Income Taxes             2004        430,000        212,000      (15,000)       (284,000)        343,000

Identifiable Assets      2005     21,657,000      3,411,000      214,000      (1,650,000)     23,632,000
                         2004     22,904,000      3,585,000      340,000      (1,869,000)     24,960,000


Nine Months Ended September 30, 2005 and 2004

                                Distribution   Manufacturing     Cable        Corporate         Total
                                ------------------------------------------------------------------------
Net Sales                2005   $ 23,856,000   $  4,749,000    $ 291,000    $   (222,000)   $ 28,674,000
                         2004     21,747,000      4,956,000      278,000        (300,000)     26,681,000

Net Earnings (Loss)      2005        382,000        656,000      (24,000)       (667,000)        347,000
                         2004        802,000        674,000      (40,000)       (695,000)        741,000

Earnings (Loss) before   2005        414,000        677,000      (24,000)       (667,000)        400,000
Income Taxes             2004        824,000        674,000      (40,000)       (695,000)        763,000

Identifiable Assets      2005     21,657,000      3,411,000      214,000      (1,650,000)     23,632,000
                         2004     22,904,000      3,585,000      340,000      (1,869,000)     24,960,000
</TABLE>

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

Approximately $6.1 million or 21.3% of the sales for the nine months ended
September 30, 2005 and approximately $4.6 million or 17.3% of the sales for the
nine months ended September 30, 2004 represented foreign sales in Eastern Europe
which includes Russia, Kazakhstan and Uzbekistan.

Note 8. Kazakhtelecom Project

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.

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

                                       12
<PAGE>

United States. Ex-Im Bank's mission is to assist in financing the export of U.S.
goods and services to international markets. In August 2005, Societe Generale
bank, New York, NY, committed to finance up to $11 million of the remaining
amount necessary for the previously announced turnkey telecommunications project
in Kazakhstan. Societe Generale New York, NY, would be the lender for the entire
$55 million to JSC Kazakhtelecom, of which the Ex-Im Bank of New York had
previously agreed to guarantee up to $48 million. The primary guarantor for
repayment of the $55 million would be Kazkommertsbank, Kazakhstan's largest
bank.

As of November 8, 2005, Kazakhtelecom has not yet approved the terms from
Societe Generale New York, NY for the project financing. Winncom will be paid on
a pro-rata basis by Kazakhtelecom after Kazakhtelecom enters into the
appropriate agreements with Societe Generale New York, NY for the repayment of
the funds. 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 the financing package will be approved by Kazakhtelecom or that
Winncom will meet all of the other terms and conditions pursuant to the terms of
the Agreement to the extent that the financing terms for the project are
approved. See Note 4, Revolving Bank Loan Agreements and Notes Payable.

As of September 30, 2005, Winncom has deferred approximately $131,000 in project
costs (site survey and engineering) because it believes that it is probable that
the project will go forward. If the project does not go forward Winncom will be
required to expense these deferred project costs.

Note 9. Commitments and Contingencies

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 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.

The original Proxim announcement of bankruptcy and a pending sale of assets to
Terabeam resulted in some of Winncom's customers decreasing orders of Proxim
equipment especially in June and July of 2005. Based on orders that have been

                                       13
<PAGE>

received through September 30, 2005 and due to the fact that there has been no
interruption of the delivery of Proxim equipment, Winncom believes that Proxim
purchases will return to normal levels.

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

Results of Operations for the Three Months Ended September 30, 2005 and 2004

Sales were $11 million and $9.5 million for the three month periods ended
September 30, 2005 and 2004, respectively. The increase in revenues comparing
the three months ended September 30, 2005 to the three months ended September
30, 2004 is primarily attributable to an increase in Winncom's revenues from
$7.9 million for the quarter ended September 30, 2004 to $9 million for the
quarter ended September 30, 2005 boosted by a sale to a single international
customer of $1.4 million; an increase in revenues from the Wireless
Communications Solutions Division from $1.6 million for the quarter ended
September 30, 2004 to $1.98 million for the quarter ended September 30, 2005 and
a slight increase in Starworks' revenues from $86,000 for the quarter ended
September 30, 2004 to $131,000 for the quarter ended September 30, 2005 (See
Note 9 to the Consolidated Financial Statements).

Gross profit margins were 18% and 19.8% for the three months ended September 30,
2005 and September 30, 2004, respectively. The decrease in gross margin for the
quarter ended September 30, 2005 as compared to the quarter ended September 30,
2004 primarily results from a large sale at lower than normal margins to an
international customer by Winncom, offset somewhat by 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 September 30, 2005, the
Wireless Communications Solutions Division sales accounted for 17% of total
revenues compared to the quarter ended September 30, 2004 in which the Wireless
Communications Solutions Division sales accounted for 15.8% of total revenues.

Selling, general and administrative expenses (SG&A) increased by $101,000 for
the three months ended September 30, 2005 compared to the three months ended
September 30, 2004. SG&A as a percent of revenue decreased from 16.7% for the
three months ended September 30, 2004 to 15.3% for the three months ended
September 30, 2005. The increase in SG&A from 2004 to 2005 is primarily
attributable to increases in international marketing costs and compensation
(including commissions and bonuses) recorded in the quarter ended September 30,
2005. Last year bonuses were not recorded until the fourth quarter. 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 55% and 57% of the total for the quarters ended September 30,
2005 and 2004, respectively. As of September 30, 2005, Winncom has deferred
approximately $131,000 in project costs (site survey, engineering and travel)
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 $52,000 for the three months ended September 30, 2005
compared to $73,000 for the three months ended September 30, 2004. The average
balance outstanding on the lines-of-credit and term loan was $1.9 million for
the quarter ended September 30, 2005 and $3.9 million for the quarter ended
September 30, 2004, but the prime interest rate averaged 6.5% for the quarter
ended September 30, 2005 compared to 4.75% for the quarter ended September 30,
2004. The Company reduced its average inventory balances by nearly $1.6 million,
combined with net income thereby allowing it to reduce its average
line-of-credit balance by $2 million.

The Company had net income of $240,000 for the quarter ended September 30, 2005
as compared to net income of $336,000 for the three months ended September 30,
2004. Higher sales in 2005 compared to 2004 were offset by lower margins, higher
SG&A and a reduction in other income (consisting primarily of vendor early
payment discounts). Vendor early payment discounts were $22,000 for the quarter
ended September 30, 2005 compared to $88,000 for the quarter ended September 30,
2004. The reduction in vendor early payment discounts was due to Winncom
suspending early payments to Proxim, its largest vendor (see Note 9 to the
Consolidated Financial Statements). Other income in 2004 also included
collection of a previously written off account receivable of $15,000.

                                       14
<PAGE>

Results of Operations for the Nine Months Ended September 30, 2005 and 2004

Sales were $28.7 million and $26.7 million for the nine month periods ended
September 30, 2005 and 2004, respectively. The $2 million increase in revenues
during the nine months ended September 30, 2005 is primarily attributable to an
increase in Winncom's revenues from $21.7 million for the nine months ended
September 30, 2004 to $23.8 million for the nine months ended September 30,
2005, partially offset by a decrease in revenues from the Wireless
Communications Solutions Division from $4.96 million for the nine months ended
September 30, 2004 to $4.75 million for the nine months ended September 30,
2005, and a slight increase in Starworks' revenues from $278,000 for the nine
months ended September 30, 2004 to $291,000 for the nine months ended September
30, 2005. Sales increased for the nine month period ended September 30, 2005,
boosted by sales to two single customers of $1.4 million each in the first and
third quarter of 2005 and 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 9 to the Consolidated Financial Statements). 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 announced a recapitalization
of its company and shipments commenced again in June of 2005.

Gross profit margins were 18.2% and 18.8% for the nine months ended September
30, 2005 and 2004, respectively. The decrease in gross margin for the nine
months ended September 30, 2005 as compared to the nine months ended September
30, 2004 is primarily the result of the Wireless Communications Solutions
Division sales accounting for 15.8% of total revenues compared to the nine
months ended September 30, 2004 in which the Wireless Communications Solutions
Division sales accounted for 17.4% of total revenues. Products from this
division have a higher margin than the products of Winncom or Starworks.

Selling, general and administrative expenses (SG&A) increased by $498,000 for
the nine months ended September 30, 2005 compared to the nine months ended
September 30, 2004. The increase in SG&A from 2004 to 2005 is primarily
attributable to increases in international marketing costs and compensation
(including commissions and bonuses) recorded in the third quarter. Last year
bonuses were not recorded until the fourth quarter. 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 16.3% for the nine months
ended September 30, 2004 to 16.9% for the nine months ended September 30, 2005.
Salaries and wages remain the largest component of SG&A, constituting 52.8% and
55% of the total for the nine months ended September 30, 2005 and 2004,
respectively. As of September 30, 2005, Winncom has deferred approximately
$131,000 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 $193,000 for the nine months ended September 30, 2005
compared to $219,000 for the nine months ended September 30, 2004. The average
balance outstanding on the line of credit and term loan was $2.2 million for the
nine months ended September 30, 2005 and $3.7 million for the nine months ended
September 30, 2005, and the prime interest rate averaged 4.125% for the nine
months ended September 30, 2004 compared to 5.83% for the nine months ended
September 30, 2005. The reduction of the average line-of-credit balance was
primarily due to a reduction in inventory.

The Company had net income of $347,000 for the nine months ended September 30,
2005 as compared to net income of $741,000 for the nine months ended September
30, 2004. Even though net sales were higher in 2005 than in 2004, there was a
decrease in gross margin, an increase in SG&A of $498,000 and a reduction in
other income, primarily vendor early payment discounts of $135,000.

                                       15
<PAGE>

Other income in 2005 also included 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 $135,000 was due to Winncom suspending early payments
to Proxim, its largest vendor (see Note 9 to the Consolidated Financial
Statements).

Financial Condition

Net cash provided by operating activities was $1.88 million for the nine months
ended September 30, 2005 compared to net cash provided by operating activities
of $461,000 for the nine months ended September 30, 2004. The primary reason for
the increase is an increase in accounts payable and accrued expenses of nearly
$1.6 million. The benefits from the reductions in inventory of approximately $1
million are offset by an increase in trade accounts receivable of $1.1 million.

Net cash used in investing activities was $87,000 for the nine months ended
September 30, 2005 compared to $108,000 for the nine months ended September 30,
2004, primarily the result of lower expenditures for patents and equipment.

The increase in net cash used by financing activities for the nine months ended
September 30, 2005 compared to 2004 is primarily the result of significant
reductions in domestic bank lines-of-credit though reductions in inventory
offset by increases in international bank lines of credit for construction
financing. Cash and cash equivalents increased approximately $1 million because
of a draw of approximately $1 million taken from the international line of
credit at the end of the quarter, the proceeds of which will be used for the
Kazakhstan project.

The Company's working capital at September 30, 2005 was $4.46 million compared
to $7.3 million at December 31, 2004. The most significant change in working
capital from December 31, 2004 to September 30, 2005 was the reclassification of
the bank line-of-credit of $1.3 million 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 $1.7 million, although cash and cash equivalents
increased nearly $1 million.

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% (7.25% at
September 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%
(7.5% at September 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 September 30, 2005 Winncom was in compliance with these
covenants.

In September 2005, Winncom entered into a one-year Line of Credit Agreement with
Kazkommertsbank for $2.3 million with an annual interest rate of 13% for the
purpose of funding a small portion of the Kazakhtelecom project described in
Note 8, specifically project engineering and laying of fiber optic cable and
telecommunication equipment purchases necessary to be completed before winter to
avoid project delays. The Line of Credit Agreement was only entered into after
Kazakhtelecom agreed to fully guaranty the repayment of Winncom's borrowings
under the Line of Credit Agreement. Kazakhtelecom will repay the Line of Credit
borrowings either from the proceeds of the permanent project financing noted in
Note 8 or from its own capital if the project financing does not go forward. In
September 2005, Winncom was advanced $1,036,000 under the Line of Credit
Agreement.

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

                                       16
<PAGE>

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
(8.75% at September 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 is calculated on a percentage of trade accounts receivable and
inventory for ARC and Starworks combined. As of September 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 September 30,
2006 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.

                                       17
<PAGE>

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 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 competitors. 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 products. 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. 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

                                       18
<PAGE>

      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 November 8, 2005, the low bid price for the common
      stock was $0.11, the high asked price was $0.13 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.

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 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 (6.75% as of September 30, 2005) plus one-half to two percent.
The prime interest rate increased from 4.75% to 6.75% over the last year. An

                                       19
<PAGE>

increase in the bank's prime interest rates on the various notes payable by 1%
would increase our yearly interest expense by approximately $23,000, 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
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

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. 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


                                       20
<PAGE>



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


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








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