ARC Wireless Solutions, Inc. announced that revenue for the third quarter was $11,016,000 as compared with $9,495,000 for the same period last year. Revenue for the nine months ended September 30, 2005 was $28,674,000 as compared with $26,681,000 for the same period last year. The increase in sales revenues for the three month and nine month periods ended September 30, 2005 as compared with the prior periods is primarily due to increased international sales from the Company's subsidiary Winncom Technologies Corp. ("Winncom").

Net income was $240,000 for the quarter ended September 30, 2005 as compared with net income of $336,000 for the same period last year. For the nine month period ended September 30, 2005, the Company had net income of $347,000 as compared with $741,000 for the nine months ended September 30, 2004. The decreases in net income for both the three and nine month periods are due to increased international travel, marketing and salary expenses at Winncom along with the temporary discontinuation of early payment discounts to Winncom's largest vendor pending the outcome of the vendor's restructuring. The restructuring has now been completed and sales of this vendor's products are in the process of returning to normal.

As previously announced, after competing with several other telecommunications companies, Winncom was awarded a $55 million turnkey telecommunications contract in Kazakhstan. The contract specifies, among other things, that Winncom is responsible for locating and presenting funding for the project for the telecommunications provider, JSC Kazakhtelecom ("Kazakhtelecom"). Ex-Im Bank of New York and Societe Generale bank, New York, NY, have committed to finance the project. Both banks have submitted the financing documents to Kazakhtelecom and its bank, Kazkommertsbank, for approval.

Due to seasonal weather conditions in the region and pending approval of the contract, Winncom and Kazakhtelecom entered into an interim loan agreement with Kazkommertsbank to fund approximately $2.3 million for the installation cost of fiber optic cable and other equipment for the project. Winncom completed the installation of the fiber optic cable during October 2005.

Gregory E. Raskin, Chief Executive Officer of Winncom stated, "We are pleased with the progress thus far and Kazakhtelecom's cooperation in funding the $2.3 million initial phase of the project. We hope for approval of the financing documents by Kazakhtelecom and its bank so that we may proceed with our manufacturing partners to begin full construction of the project."

Randall P. Marx, Chief Executive Officer, stated, "As we eagerly await the approval of Winncom's contract, we do not want to overlook the fine performance of our Wireless Communications Solutions Division in the third quarter with sales up 20% and earnings of the division up 89% as compared to the same period last year. The initial phase of our subcontract on a third party Homeland Security project has been completed and demand for our antenna products remains strong. Our Starworks Wireless subsidiary continues to support our distribution and manufacturing channels with outside sales improving as well." Mr. Marx added, "We are also pleased to report that by more efficiently managing our inventory we were able to reduce inventory by more than $1,000,000, thereby reducing bank debt, excluding the loan guaranteed by Kazakhtelecom, by more than 40%."