WIRELESS TELECOM GROUP INC

Introduction

The Company continues to deal with the on-going impacts of the COVID-19 pandemic. As of the date of this filing, the majority of our employees continue to have flexible work arrangements spending the majority of their time working from home. We continue to institute distancing of workstations and other safety precautions in all of our facilities globally for those essential employees that are not working remotely. The Company has started a phased re-entry plan bringing more employees back into our facilities on a gradual basis. The Company will continue to adjust our plans based on the facts and circumstances of each jurisdiction in which we operate.

Our first quarter 2021 results reflect increased year over year revenue in two of our three product groups. Revenue at our Radio, baseband and software (“RBS”) product group increased 102.9% year over year as a result of increased software and services sales as well as sales of digital signal processing cards. Revenue in our Test and measurement (“T&M”) product group increased 42.2% on higher Holzworth sales and increased sales from our legacy T&M brands. These increases were offset somewhat by a decline in the RF components (“RFC”) product group which we believe continues to be negatively impacted by the COVID-19 pandemic as wireless carrier spending on large projects has declined from the same period last year.

Net consolidated revenue increased 20.1% from the prior year period due primarily to higher software and services revenue in our RBS group due to new software and service contracts. Also contributing to the overall revenue increase was an increase in T&M revenue due to a full quarter contribution of Holzworth in fiscal 2021 versus a half of quarter in 2020, as well as increased revenue from our legacy T&M brands. This was offset by lower revenue at our RFC product group as wireless carrier spend on large projects has declined from the prior year which we believe is due to the on-going impact of the COVID-19 pandemic.

We expect borrowings available to us under our Credit Facility, our existing cash balance and cash generated by operations will be sufficient to meet our liquidity needs for the next twelve months. Our ability to meet our cash requirements will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control, including the impact the COVID-19 pandemic has had on our business, specifically our RFC product group. Wireless carrier spend on large projects has been reduced which we believe is a result of the COVID-19 pandemic and this has negatively impacted the RFC product group revenue. We expect the uncertainty caused by the COVID-19 pandemic to extend to our business into the second quarter of 2021 and possibly the second half of the year.

The statements contained in this Quarterly Report on Form 10-Q that are not historical facts, including, without limitation, some of the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include statements about our expectations that our existing cash balance, cash generated by operations and availability under our Credit Facility will be sufficient to meet our liquidity needs for the next twelve months; our expectation to realize tax benefits in future periods and our expectation that uncertainties around the impact of the ongoing COVID-19 pandemic might extend to our business through at least the second quarter of 2021 and possibly the second half of the year. These statements involve risks and uncertainties. These statements are based on the Company’s current expectations of future events and are subject to a number of risks and uncertainties that may cause the Company’s actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, the impact that the COVID-19 pandemic will have on our business and the economy in the future, our dependency on capital spending on data and communication networks by our customers and end users, our dependency on the deployment of 4G LTE and 5G NR private networks and related services to grow our business, the impact of the loss of any significant customers, the ability of our management to successfully implement our business plan and strategy, our ability to raise additional capital to fund our operations given our degree of leverage, product demand and development of competitive technologies in our market sector, the impact of competitive products and pricing, our abilities to protect our intellectual property rights, our ability to manage risks related to our information technology and cyber security, and the risk that our PPP loan will not be forgiven, among others. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. These risks and uncertainties are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020 and elsewhere in this Quarterly Report on Form 10-Q. The Company’s forward-looking statements speak only as of the date of this Quarterly Report. The Company undertakes no obligation to publicly update or review any forward-looking statements whether as a result of new information, future developments or otherwise.