Quarterly Report (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-11916

WIRELESS TELECOM GROUP, INC.

(Exact name of Registrant as specified in its charter)

New Jersey		22-2582295
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

25 Eastmans Road, Parsippany, New Jersey		07054
(Address of principal executive offices)		(Zip Code)

(973)386-9696

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.01 per share		WTT		NYSEAmerican

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes☒

No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes☒

No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☐		Smaller reporting company	☒
	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Yes☐

No☒

Number of shares of Common Stock outstanding as of May 2, 2022: 22,972,009

WIRELESS TELECOM GROUP, INC.

Form 10-Q

Table of Contents

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	22
Item 6.	Exhibits	22
SIGNATURES	23

WIRELESS TELECOM GROUP, INC.

CONSOLIDATED BALANCE SHEETS
(In thousands, except number of shares and par value)

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

		(Unaudited)
		March 31 2022			December 31 2021
CURRENT ASSETS
Cash & cash equivalents		$	19,072			$	4,472
Accounts receivable - net of reserves of $180and $196, respectively			3,875				2,407
Inventories - net of reserves of $695and $681, respectively			4,976				5,088
Prepaid expenses and other current assets			2,233				1,689
Current assets of discontinued operations			-				6,869
TOTAL CURRENT ASSETS			30,156				20,525
PROPERTY PLANT AND EQUIPMENT - NET			1,300				1,110
OTHER ASSETS
Goodwill			10,012				10,108
Acquired intangible assets, net			3,418				3,661
Deferred income taxes			2,314				5,580
Right of use assets			1,007				1,146
Other assets			290				284
Non current assets of discontinued operations			-				1,937
TOTAL OTHER ASSETS			17,041				22,716
TOTAL ASSETS		$	48,497			$	44,351
CURRENT LIABILITIES
Short term debt		$	62			$	126
Accounts payable			1,470				1,481
Short term leases			599				585
Accrued expenses and other current liabilities			6,259				6,676
Deferred revenue			89				408
Current liabilities of discontinued operations			-				1,965
TOTAL CURRENT LIABILITIES			8,479				11,241
LONG TERM LIABILITIES
Long term debt			267				3,595
Long term leases			462				615
Other long term liabilities			52				52
Deferred tax liability			222				228
TOTAL LONG TERM LIABILITIES			1,003				4,490
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, $.01par value, 2,000,000shares authorized, noneissued			-				-
Common stock, $.01par value, 75,000,000shares authorized 36,230,636and 35,915,636shares issued, 22,972,009and 22,666,072shares outstanding			362				359
Additional paid in capital			51,906				51,555
Retained earnings			10,751				554
Treasury stock at cost, 13,258,627and 13,249,564shares			(24,638	)			(24,619	)
Accumulated other comprehensive income			634				771
TOTAL SHAREHOLDERS' EQUITY			39,015				28,620
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	48,497			$	44,351

See accompanying Notes to Consolidated Financial Statements.

WIRELESS TELECOM GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

(UNAUDITED)

(In thousands, except per share amounts)

		For the Three Months Ended
		March 31
		2022			2021
Net revenues		$	7,596			$	8,184
Cost of revenues			3,241				3,330
Gross profit			4,355				4,854
Operating expenses
Research and development			1,159				1,156
Sales and marketing			1,260				1,195
General and administrative			3,392				2,853
Total operating expenses			5,811				5,204
Operating loss			(1,456	)			(350	)
Loss on extinguishment of debt			(792	)			-
Other income/(expense)			101				27
Interest expense			(177	)			(297	)
Loss before taxes			(2,324	)			(620	)
Tax benefit			(851	)			(145	)
Net loss from continuing operations		$	(1,473	)		$	(475	)
Net income from discontinued operations, net of taxes			11,670				242
Net income/(loss)		$	10,197			$	(233	)
Other comprehensive income/(loss):
Foreign currency translation adjustments			(137	)			75
Comprehensive income/(loss)		$	10,060			$	(158	)
Loss per share from continuing operations:
Basic		$	(0.07	)		$	(0.02	)
Diluted		$	(0.07	)		$	(0.02	)
Income per share from discontinued operations:
Basic		$	0.52			$	0.01
Diluted		$	0.47			$	0.01
Income/(loss) per share:
Basic		$	0.45			$	(0.01	)
Diluted		$	0.40			$	(0.01	)
Weighted average shares outstanding:
Basic			22,603				21,742
Diluted			25,070				24,050

In periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation because they are anti-dilutive.

See accompanying Notes to Consolidated Financial Statements.

WIRELESS TELECOM GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)

		For the Three Months
		Ended March 31
		2022			2021
CASH FLOWS USED BY OPERATING ACTIVITIES
Net income/(loss)		$	10,197			$	(233	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization			433				530
Loss on extinguishment of term debt			792				-
Gain on sale of Microlab			(16,403	)			-
Amortization of debt issuance fees			55				83
Share-based compensation expense			330				114
Deferred rent			(7	)			(7	)
Deferred income taxes			3,265				-
Provision for doubtful accounts			(16	)			3
Inventory reserves			24				61
Changes in assets and liabilities, net of divestiture:
Accounts receivable			(1,411	)			(853	)
Inventories			(132	)			(517	)
Prepaid expenses and other assets			(184	)			(254	)
Accounts payable			304				606
Deferred revenue			(317	)			-
Accrued expenses and other liabilities			(505	)			235
Net cash used by operating activities			(3,575	)			(232	)
CASH FLOWS PROVIDED/(USED) BY INVESTING ACTIVITIES
Capital expenditures			(151	)			(144	)
Deferred purchase price payment			(250	)			(200	)
Divestiture of Microlab, net			22,753				-
Net cash provided/(used) by investing activities			22,352				(344	)
CASH FLOWS USED BY FINANCING ACTIVITIES
Term loan repayments			(4,104	)			(449	)
Proceeds from exercise of stock options			24				-
Shares withheld for employee taxes			(19	)			(17	)
Net cash provided/(used) by financing activities			(4,099	)			(466	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents			(78	)			12
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS			14,600				(1,030	)
Cash and Cash Equivalents, at Beginning of Period			4,472				4,910
CASH AND CASH EQUIVALENTS, AT END OF PERIOD		$	19,072			$	3,880
SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest		$	122			$	213
Cash paid during the period for income taxes		$	12			$	13

See accompanying Notes to Consolidated Financial Statements.

WIRELESS TELECOM GROUP, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

(UNAUDITED)

(In thousands, except share amounts)

		Common Stock Issued			Common Stock Amount			Additional Paid In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income/(Loss)			Total Shareholders' Equity
Balances at January 1, 2021			34,888,904			$	349			$	50,163			$	(946	)		$	(24,556	)		$	841			$	25,851
Net income/(loss)			-				-				-				(233	)			-				-				(233	)
Shares withheld for employee taxes			-				-				-				-				(17	)			-				(17	)
Share-based compensation expense			-				-				114				-				-				-				114
Cumulative translation adjustment			-				-				-				-				-				75				75
Balances at March 31, 2021			34,888,904			$	349			$	50,277			$	(1,179	)		$	(24,573	)		$	916			$	25,790

		Common Stock Issued			Common Stock Amount			Additional Paid In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income/(Loss)			Total Shareholders' Equity
Balances at January 1, 2022			35,915,636			$	359			$	51,555			$	554			$	(24,619	)		$	771			$	28,620
Net income/(loss)			-				-				-				10,197				-				-				10,197
Issuance of shares in connection with stock options exercised			15,000				-				24				-				-				-				24
Issuance of restricted stock			300,000				3				(3	)			-				-				-				-
Shares withheld for employee taxes			-				-				-				-				(19	)			-				(19	)
Share-based compensation expense			-				-				330				-				-				-				330
Cumulative translation adjustment			-				-				-				-				-				(137	)			(137	)
Balances at March 31, 2022			36,230,636			$	362			$	51,906			$	10,751			$	(24,638	)		$	634			$	39,015

See accompanying Notes to Consolidated Financial Statements.

NOTE 1 - Summary of Significant Accounting Principles and Policies

Basis of Presentation and Preparation

Wireless Telecom Group, Inc., a New Jersey corporation, together with its subsidiaries ("we", "us", "our" or the "Company"), specializes in the design and manufacture of advanced radio frequency and microwave devices which enable the development, testing and deployment of wireless technology. The Company provides unique, highly customized and configured solutions which drive innovation across a wide range of traditional and emerging wireless technologies.

The consolidated financial statements for the 2021 fiscal year included the accounts of Wireless Telecom Group, Inc., doing business as, and operating under the trade name Noise Com, Inc., and its wholly owned subsidiaries including Boonton Electronics Corporation, Microlab/FXR, Wireless Telecommunications Ltd., CommAgility Limited and Holzworth Instrumentation, Inc. Noise Com, Inc., Boonton Electronics Corporation, Microlab/FXR, CommAgility Limited Ltd., and Holzworth Instrumentation, Inc. are hereinafter referred to as "Noisecom", "Boonton", "Microlab", "CommAgility" and "Holzworth", respectively.

As more fully described in Note 3, on March 1, 2022, the Company completed the sale of Microlab to RF Industries, Ltd. In accordance with applicable accounting guidance, the results of Microlab are presented as discontinued operations in the Consolidated Statements of Operations and Comprehensive Income/(Loss) and, as such, have been excluded from continuing operations. Further, the Company reclassified the assets and liabilities of Microlab as assets and liabilities of discontinued operations in the Consolidated Balance Sheet as of December 31, 2021. The Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations.

Our consolidated financial statements from continuing operations include the accounts of Noisecom, Boonton, Holzworth, and CommAgility and have been prepared using accounting principles generally accepted in the United States ("U.S. GAAP"). All intercompany transactions and balances have been eliminated in consolidation.

It is suggested that these interim consolidated financial statements be read in conjunction with the audited consolidated financial statements, and the notes thereto, included in the Company's latest annual report (Form 10-K).

The Company's fiscal periods are based on the calendar year. Except as otherwise specified, references to "first quarter(s)" or "three months" indicate the Company's fiscal periods ended March 31, 2022 and March 31, 2021, and references to "year-end" indicate the fiscal year ended December 31, 2021.

Consolidated Financial Statements

In the opinion of management, the accompanying consolidated financial statements referred to above contain all necessary adjustments, consisting of normal accruals and recurring entries, which are necessary to fairly present the Company's results for the interim periods being presented.

The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2021. Specific reference is made to that report since certain information and footnote disclosures normally included in financial statements in accordance with US GAAP have been reduced for interim periods in accordance with SEC rules.

The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022.

Critical Accounting Estimates

The preparation of our consolidated financial statements requires the Company to make estimates and judgments that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amount of revenues and expenses for each period. We base our assumptions, judgements and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. At least quarterly, we evaluate our assumptions, judgments and estimates, and make changes as deemed necessary.

The COVID-19 pandemic and the conflict between Russia and Ukraine have negatively impacted regional and global economies, disrupted global supply chains and created significant volatility and disruption of financial markets. Although these disruptions did not impact our estimates and judgements as of the date of this report, it is reasonably possible that our accounting estimates and judgements may change as new events occur and additional information becomes available or is obtained. Furthermore, actual results could differ materially from our estimates as of the date of issuance of this Quarterly Report on Form 10-Q under different assumptions or conditions.

For further information about our critical accounting estimates, see the discussion in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," under the heading "Critical Accounting Policies" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Concentration Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable.

Credit evaluations are performed on customers requiring credit over a certain amount. Credit risk is mitigated to a lesser extent through collateral such as letters of credit, bank guarantees or payment terms like cash in advance.

One customer accounted for 11.2%of consolidated revenue for the three months ended March 31, 2022. A different customer accounted for 17.4% of consolidated revenue for the three months ended March 31, 2021.

One customer accounted for 19.3% of consolidated accounts receivable as of March 31, 2022. At December 31, 2021, no one customer accounted for greater than 10% of consolidated accounts receivable.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The carrying amounts of the Company's financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities.

Contingent Consideration

Under the terms of the Holzworth Share Purchase Agreement, the Company was required to pay additional purchase price in the form of an earnout based on Holzworth's financial results for the years ended December 31, 2020 and 2021.

As of March 31, 2022, the amount due for the Holzworth earnout was $2.9million and included in accrued expenses and other current liabilities in the Consolidated Balance Sheet.

Segments

The Company evaluates its financial reporting in accordance with ASC 280 Segment Reporting. As of March 1,2022, the Company determined that the chief operating decision maker makes financial decisions and allocates resources based on segment profit information for two segments. See Note 12.

NOTE 2 - Accounting Pronouncements

Recently Adopted Accounting Standards

There have been no changes to our significant accounting policies as described in the 2021 Form 10-K that had a material impact on our consolidated financial statements and related notes.

Recent Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). ASU 2016-13 changes the impairment model for most financial assets and will require the use of an "expected loss" model for instruments measured at amortized cost. This pronouncement is effective for small reporting companies for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2022. The Company plans to adopt the standard effective January 1, 2023. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

NOTE 3 - Discontinued Operations

On March 1, 2022, the Company completed the sale of Microlab to RF Industries, Ltd (the "Transaction"). At closing, the Company received approximately $22.8million in proceeds net of indemnification and purchase price adjustment holdbacks of $150,000and $100,000, respectively, and direct expenses. The indemnification holdback expires one year from close and the final purchase price adjustment, which is primarily comprised of a working capital adjustment, is to be settled 90 days after close. $4.1million of the net proceeds were used to repay our outstanding Term Loan Facility (as defined in Note 4) with Muzinich BDC, approximately $600,000of the net proceeds were used to repay our outstanding revolver balance related to the Bank of America Credit Facility (as defined in Note 4) and approximately $486,000were used to pay our advisors.

The Company terminated its Term Loan Facility with Muzinich BDC and Credit Facility with Bank of America N.A. as of the Transaction close date (see Note 4 below). Additionally, concurrent with the closing, the Company entered into a sublease with RF Industries, Ltd for approximately one-half of the square footage of our corporate headquarters in Parsippany, NJ (see Note 5 below).

The Transaction will be treated as a sale of the assets and liabilities of Microlab to RF Industries, Ltd. for U.S. federal and applicable state income tax purposes. The Company has approximately $14.9million of U.S. federal net operating loss carryforwards and approximately $41.2million of New Jersey state net operating loss carryforwards as of December 31, 2021. We expect to utilize all of our federal net operating loss carryforwards and approximately 50% of our state net operating loss carryforwards to offset the taxable gain generated from the Microlab divestiture.

In accordance with Accounting Standards Codfication ("ASC") 205-20 Discontinued Operations, the results of Microlab are presented as discontinued operations in the Consolidated Statements of Operations and, as such, have been excluded from continuing operations. Further, the Company reclassified the assets and liabilities of Microlab as assets and liabilities of discontinued operations in the Consolidated Balance Sheet as of December 31, 2021. The Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations.

The following table summarizes the significant items included in income from discontinued operations, net of tax in the Consolidated Statement of Operations for the three months ended March 31, 2022 and 2021 (in thousands):

		Three months ended
		March 31, 2022			March 31, 2021
Net revenues		$	2,477			$	3,137
Cost of revenues			1,626				2,046
Gross profit			851				1,091
Operating expenses			693				756
Gain on divestiture, net of expenses			16,403				-
Income from Discontinued Operations before income taxes			16,561				335
Income tax expense			4,891				93
Income from Discontinued Operations, net of income taxes		$	11,670			$	242

The following table summarizes the carrying value of the significant classes of assets and liabilities classified as discontinued operations as of December 31, 2021:

Current Assets
Accounts receivable, net		$	2,883
Inventories, net			3,986
Total current assets			6,869
Property, plant and equipment, net			421
Goodwill			1,351
Other non current assets			165
Total non current assets			1,937
Total assets		$	8,806
Current liabilities
Accounts payable		$	783
Accrued expenses and other current liabilities			1,182
Total current liabilities		$	1,965

The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows for all periods presented. Microlab depreciation expense for the three months ended March 31, 2021 and included in the consolidated statement of cash flow was $61,000. Depreciation expense recorded in the three months ended March 31, 2022 for Microlab was not material. There were no material Microlab capital expenditures in the three months ended March 31, 2022 or 2021.

NOTE 4 - Debt

Termination of Muzinich Term Loan Facility and Bank of America N.A. Credit Facility

On March 1, 2022, the Company repaid in full and terminated that certain Credit Agreement dated February 7, 2020, among the Company, its subsidiaries and Muzinich BDC, Inc., as amended on May 4, 2020, February 25, 2021, May 27, 2021 and September 28, 2021 (the "Term Loan Facility"). The Company repaid the outstanding principal balance of $4.1million and accrued interest thereon. Additionally, on March 1, 2022, the Company terminated that certain Loan and Security Agreement dated as of February 16, 2017 among the Company, its subsidiaries and Bank of America, as amended on June 30, 2017, January 23, 2019, February 27, 2019, November 8, 2019, February 7, 2020, May 1, 2020, February 25, 2021 and September 28, 2021 (the "Credit Facility"), which included an asset based revolving loan ("revolver") which was subject to a borrowing base calculation. The outstanding balance of the revolver at March 1, 2022 was approximately $600,000. The repayment of the Term Loan Facility and Revolver were funded by the proceeds of the Microlab divestiture.

The Company accounted for the termination of the Term Loan Facility and Credit Facility as an extinguishment of debt in accordance with ASC 470 Debt. The Company recognized a loss on extinguishment of debt of $792,000which was primarily comprised of unamortized debt issuance costs.

CIBLS Loan

On May 27, 2021, CommAgility entered into the Coronavirus Business Interruption Loan Agreement ("CIBLS Loan") with Lloyds Bank PLC ("Lloyds"). Under the terms of the CIBLS Loan CommAgility can draw up to a maximum of £250,000for purposes of supporting daily business cash flow. The CIBLS Loan is repayable in 48 consecutive equal monthly installments beginning in month 13 after the initial loan drawdown (12 month principal repayment holiday). Interest is payable monthly at the official bank rate of the Bank of England plus an interest margin of 2.35% per annum. Interest payments begin in month 13 after the initial loan drawdown. The first twelve months of interest payments are paid by the U.K. government. The CIBLS Loan is secured by the assets of CommAgility.

On July 1, 2021, CommAgility executed a draw down of the maximum amount of £250,000. As of March 31, 2022, $62,000is included in short term debt and $267,000is included long term debt on the Consolidated Balance Sheet.

NOTE 5 - Leases

The Company's lease agreements consist of building leases for its operating locations and office equipment leases for printers and copiers with lease terms that range from less than 12 monthsto 8 years. At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. The Company's leases for office equipment such as printers and copiers contain lease and non-lease components (i.e. maintenance). The Company accounts for lease and non-lease components of office equipment as a single lease component.

All of the Company's leases are operating leases and are presented as right of use lease asset, short term lease liability and long term lease liability on the consolidated balance sheets as of March 31, 2022 and December 31, 2021. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company's incremental borrowing rate. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

Lease expense is recognized on a straight-line basis over the lease term and is included in cost of revenues and general and administrative expenses on the Consolidated Statement of Operations and Comprehensive Income/(Loss).

An initial right-of-use asset of $1.9million was recognized as a non-cash asset addition with the adoption of the new lease accounting standard on January 1, 2019. With our acquisition of Holzworth on February 7, 2020, we acquired a right-of-use asset of $789,000. There have been no other right-of-use assets recognized since the date of adoption of the new lease standard. Cash paid for amounts included in the present value of operating lease liabilities was $156,000and $151,000during the three months ended March 31, 2022 and 2021, respectively, and was included in operating cash flows.

Operating lease costs for the three months ended March 31, 2022 and March 31, 2021 were $247,000and $276,000, respectively.

The following table presents information about the amount and timing of cash flows arising from the Company's leases as of March 31, 2022:

(in thousands)		March 31, 2022
Maturity of Lease Liabilities
Remainder of 2022		$	481
2023			276
2024			158
2025			163
2026			69
Total undiscounted operating lease payments			1,147
Less: imputed interest			(86	)
Present value of operating lease liabilities		$	1,061
Balance sheet classification
Current lease liabilities		$	599
Long-term lease liabilities			462
Total operating lease liabilities		$	1,061
Other information
Weighted-average remaining term (months) for operating leases			34
Weighted-average discount rate for operating leases			5.88	%

On March 1, 2022, the Company entered into a sublease for approximately one-half of the corporate headquarters in Parsippany N.J. with RF Industries, Ltd. The sublease co-terminates with the master lease on March 31, 2023. The Company evaluated the sublease in accordance with ASC 842 Leases and determined that the sublease is an operating lease. Accordingly, sublease income is recognized on the Consolidated Statement of Operations as other income.

NOTE 6 - Revenue

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. The Company's performance obligations are satisfied either over time or at a point in time. Revenue from performance obligations that transferred at a point in time accounted for approximately 91% and 97% of the Company's consolidated revenue for the three months ended March 31, 2022 and 2021, respectively.

Nature of Products and Services

Hardware

The Company generally has one performance obligation in its arrangements involving the sales of digital signal processing hardware, power meters, analyzers, noise/signal generators, phase noise analyzers and other components. When the terms of a contract include the transfer of multiple products, each distinct product is identified as a separate performance obligation. Generally, satisfaction occurs when control of the promised goods is transferred to the customer in exchange for consideration in an amount for which we expect to be entitled. Generally, control is transferred when legal title of the asset moves from the Company to the customer. We sell our products to a customer based on a purchase order, and the shipping terms per each individual order are primarily used to satisfy the single performance obligation. However, in order to determine when control has transferred to the customer, the Company also considers:

	●	when the Company has a present right to payment for the asset;
	●	when the Company has transferred physical possession of the asset to the customer;
	●	when the customer has the significant risks and rewards of ownership of the asset; and
	●	when the customer has accepted the asset.

Software

Arrangements involving licenses of software in the CommAgility brand may involve multiple performance obligations, most notably subsequent releases of the software. The Company has concluded that each software release in a multiple deliverable arrangement involving CommAgility software licenses is a distinct performance obligation and, accordingly, transaction price is allocated to each release when the customer obtains control of the software.

Performance obligations that are not distinct at contract inception are combined. Specifically, with the Company's sales of software, contracts that include customization may result in the combination of the customization services with the license as one distinct performance obligation and recognized over time. The duration of these performance obligations are typically one year or less.

Services

Arrangements involving calibration and repair services of the Company's products are generally considered a single performance obligation and are recognized as the services are rendered.

Shipping and Handling

Shipping and handling activities performed after the customer obtains control are accounted for as fulfillment activities and recognized as cost of revenues.

Significant Judgments

For the Company's more complex software and services arrangements, significant judgment is required in determining whether licenses and services are distinct performance obligations that should be accounted for separately or are not distinct and thus accounted for together. Further, in cases where we determine that performance obligations should be accounted for separately, judgment is required to determine the standalone selling price for each distinct performance obligation.

Contract Balances

The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in contract assets (unbilled revenue) or contract liabilities (deferred revenue) on the Company's Consolidated Balance Sheet. The Company records unbilled revenue when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Unbilled revenue was $297,000and $292,000as of March 31, 2022 and December 31, 2021, respectively, and recorded in prepaid expenses and other current assets. Deferred revenue was $89,000and $408,000as of March 31, 2022 and December 31, 2021, respectively. The decrease in deferred revenue from December 31, 2021 is primarily due to recognition of revenue for certain CommAgility projects involving multiple performance obligations.

Disaggregated Revenue

We disaggregate our revenue from contracts with customers by product family and geographic location as we believe it best depicts how the nature, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below (in thousands). Revenues from signal generators, components, analyzers and power meters are attributable to the T&M segment in 2022 and 2021. Approximately $494,000and $440,000of services revenue are attributable to the T&M segment in 2022 and 2021, respectively.

		Three Months Ended March 31, 2022			Three Months Ended March 31, 2021
Total net revenues by revenue type
Signal generators and components		$	3,471			$	3,329
Signal analyzers and power meters			2,094				1,558
Signal processing hardware			411				1,483
Software licenses			417				990
Services			1,203				824
Total net revenue		$	7,596			$	8,184
Total net revenues by geographic areas
Americas		$	5,192			$	5,011
EMEA			979				2,260
APAC			1,425				913
Total net revenue		$	7,596			$	8,184

NOTE 7 - Income Taxes

The Company records deferred taxes in accordance with ASC 740, Accounting for Income Taxes. ASC 740 requires recognition of deferred tax assets and liabilities for temporary differences between tax basis of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted rates in effect for the year in which the differences are expected to reverse. The Company establishes a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. The Company periodically assesses the value of its deferred tax assets and determines the necessity for a valuation allowance.

Realization of the Company's deferred tax assets is dependent upon the Company generating sufficient taxable income in the appropriate tax jurisdictions in future years to obtain benefit from the reversal of net deductible temporary differences and from utilization of net operating losses. The Company's major tax jurisdictions are New Jersey, Colorado and the United Kingdom ("U.K."). The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are changed.

As of March 31, 2022, the Company's net deferred tax asset of $2.3million is net of a valuation allowance of approximately $7.1million which is associated with the Company's foreign net operating loss carryforward from an inactive foreign entity, state net operating loss carryforward and a state research and development credit. The net deferred tax asset decreased approximately $3.3million from December 31, 2021 due to the taxable gain to be recognized on the Microlab divestiture. The Company expects to utilize in 2022 all of its federal net operating loss carryforwards and approximately one-half of its New Jersey state net operating loss carryforwards to offset the taxable gain recognized on the Microlab divestiture. The reduction in the net deferred tax asset from December 31, 2021 is due to the reduction in Federal and New Jersey state net operating loss carryforwards.

In accordance with Accounting Standards Update ("ASU") 2019-12 the Company recorded a tax provision of approximately $4.9million related to income from discontinued operations and a tax benefit of approximately $851,000related to loss from continuing operations for the three months ended March 31, 2022 and a tax provision of approximately $93,000related to income from discontinued operations and a tax benefit of approximately $145,000related to loss from continuing operations for the three months ended March 31, 2021.

NOTE 8 - Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding for the period and, when dilutive, potential shares from stock options using the treasury stock method, the weighted average number of unvested restricted shares, the weighted-average number of restricted stock units, the number of shares issuable under the terms of the Holzworth earnout and the weighted average number of warrants to purchase common stock outstanding for the period. Shares from stock options are included in the diluted earnings per share calculation only when options exercise prices are lower than the average market value of the common shares for the period presented. In periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation because they are anti-dilutive. In accordance with ASC 260, "Earnings Per Share", the following table reconciles basic shares outstanding to fully diluted shares outstanding.

		For the Three Months
		Ended March 31,
		2022			2021
Weighted average common shares outstanding			22,603,330				21,741,550
Potentially dilutive equity awards			2,467,056				2,308,144
Weighted average common shares outstanding, assuming dilution			25,070,386				24,049,694

For the three months ended March 31, 2022, the weighted average number of options to purchase common stock not included in potentially dilutive equity awards because the effects are anti-dilutive, or the performance condition was not met was 1,320,000. The number of shares issuable under the terms of the Holzworth earnout, if all paid in shares of common stock, is 1,340,637and is included in potentially dilutive equity awards in the chart above.

For the three months ended March 31, 2021, the weighted average number of options to purchase common stock not included in potentially dilutive equity awards because the effects are anti-dilutive, or the performance condition was not met was 1,320,000. The number of shares issuable under the terms of the Holzworth earnout, if all paid in shares of common stock, is 1,599,807and is included in potentially dilutive equity awards in the chart above.

NOTE 9 - Inventories

Inventory carrying value is net of inventory reserves of $695,000at March 31, 2022 and $681,000at December 31, 2021.

Inventories consist of (in thousands):
		March 31, 2022			December 31, 2021
Raw materials		$	3,462			$	3,213
Work-in-process			384				542
Finished goods			1,130				1,333
Total Inventory		$	4,976			$	5,088

NOTE 10 - Accrued Expenses and Other Current Liabilities

As of March 31, 2022, and December 31, 2021 accrued expenses and other current liabilities consisted of the following (in thousands):

		March 31, 2022			December 31 2021
Holzworth earnout (Year 1 and Year 2)		$	2,942			$	2,942
Payroll and related benefits			911				718
Accrued income taxes			827				-
Accrued bonus			41				590
Goods received not invoiced			352				277
Accrued commissions			314				465
Accrued professional fees			216				524
Sales and use and VAT tax			166				276
Holzworth deferred purchase price			-				250
Warranty reserve			61				61
Other			429				573
Total		$	6,259			$	6,676

NOTE 11 - Accounting for Stock Based Compensation

The Company's results for the three months ended March 31, 2022 and 2021 include $330,000and $114,000, respectively, related to stock based compensation expense. Such amounts have been included in the Consolidated Statement of Operations and Comprehensive Income/(Loss) within general and administrative expenses in operating expenses. The Company accounts for forfeitures when they occur.

Incentive Compensation Plan

In the second quarter of 2021, the Company's Board of Directors and shareholders approved the 2021 Long Term Incentive Plan (the "2021 Incentive Plan"), which provides for the grant of equity-based and cash incentives, including restricted stock awards, restricted stock unit awards, performance unit awards, non-qualified stock options, incentive stock options and cash awards, including dividend equivalent rights to employees, officers, directors or other service providers of the Company who are expected to contribute to the Company's future growth and success. The 2021 Incentive Plan provides for the grant of awards relating to 1.5million shares of common stock. As of March 31, 2022, there are 442,500shares available for grant under the 2021 Incentive Plan.

All service-based (time vesting) options granted have ten-year terms from the date of grant and typically vest annually and become fully exercisable after a maximum of five years. However, vesting conditions are determined on a grant by grant basis.

On January 6, 2022 the Compensation Committee of the Board of Directors approved the grant of restricted common stock awards to named executive officers Tim Whelan, Mike Kandell, Dan Monopoli and Alfred Rodriguez of 125,000, 75,000, 50,000and 50,000shares respectively which vest in equal annual installments over two years. If an executive's service with the Company terminates before the restricted awards are fully vested, then the shares that are not then fully vested are forfeited and immediately returned to the Company. The grant date value per share was $2.11.

NOTE 12 - Reportable Segments

In March 2022 the Company reorganized into twosegments - Test and Measurement (T&M) and Radio, Baseband and Software (RBS). The T&M segment is comprised of the Boonton, Noisecom and Holzworth brands. T&M is primarily engaged in supplying noise source components and instruments and electronic testing and measurement instruments to customers in the semiconductor, military, aerospace, medical and commercial communications industries.

The RBS segment is comprised of CommAgility and develops the software which enables specialized LTE and 5G deployments, applications and private network solutions including the LTE physical layer and stack software, for mobile network and related applications. RBS engineers work closely with customers to provide hardware and software solutions in specialized applications and use-cases in wireless baseband, private networks, and non-terrestrial ("NTN") communications. Additionally, CommAgility licenses, implements and customizes 5G and LTE physical layer and stack software for private networks supporting satellite communications, the military and aerospace industries, offering our customers unique implementation capabilities built on 3rd Generation Partnership Project ("3GPP") standards.

For internal reporting purposes, the Company's chief operating decision maker makes financial decisions and allocates resources based on segment profit information obtained from the Company's internal management systems. Segment profitability includes the direct expenses of each segment and certain corporate allocations for rent and insurance. Management does not include in its measures of segment profitability certain corporate expenses such as information technology expenses, finance and accounting expenses, legal and professional fees, public company expenses and other discreet items that are not core to the measurement of segment management's performance but rather are controlled at the corporate level.

Summarized financial information relating to the Company's reportable segments is shown in the following table:

	Three months ended			Three months ended
		March 31, 2022			March 31, 2021
		T&M			RBS			Consolidated			T&M			RBS			Consolidated
Net revenues		$	6,059			$	1,537			$	7,596			$	5,327			$	2,857			$	8,184
Cost of revenues			2,551				690				3,241				2,273				1,057				3,330
Gross profit			3,508				847				4,355				3,054				1,800				4,854
Segment Operating Expenses			1,871				1,598				3,469				1,401				1,835				3,236
Segment Profitability			1,637				(751	)			886				1,653				(35	)			1,618
Corporate Expenses											2,342												1,968
Operating Loss											(1,456	)											(350	)
Other income/(expense)											(691	)											27
Interest expense											(177	)											(297	)
Income/(Loss) before taxes											(2,324	)											(620	)
Tax provision/(benefit)											(851	)											(145	)
Net income/(loss) from continuing operations											(1,473	)											(475	)
Net income from Discontinued Operations, net of tax											11,670												242
Net income/(loss)										$	10,197											$	(233	)
Depreciation and Amortization		$	279			$	154			$	433			$	224			$	246			$	470

NOTE 13 - COMMITMENTS AND CONTINGENCIES

There have been no material changes in our commitments and contingencies and risks and uncertainties as of March 31, 2022 from that previously disclosed in our annual report on Form 10-K for the year ended December 31, 2021.

NOTE 14 - SUBSEQUENT EVENTS

There were no subsequent events or transactions requiring recognition or disclosure in the consolidated financial statements, and the notes thereto, through the date the financial statements were issued.

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

The following discussion of our financial condition and results of operations should be read in conjunction with our interim consolidated financial statements and the notes to those statements included in Part I, Item I of this Quarterly Report on Form 10-Q and in conjunction with the audited consolidated financial statements contained in our annual report on Form 10-K for the year ended December 31, 2021.

Introduction

On March 1, 2022 the Company completed the sale of Microlab to RF Industries, Ltd. and received approximately $23.7 million in cash. Concurrent with the divestiture we repaid our outstanding Term Loan Facility with Muzinich BDC and Credit Facility with Bank of America N.A. and terminated both facilities. The divestiture of Microlab represents a strategic shift for the Company away from lower margin RF Components business to our higher growth higher margin T&M and RBS segments.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2022 Compared with Three Months Ended March 31, 2021

Net Revenues (in thousands)

		Three months ended March 31,
		Revenue			% of Revenue			Change
		2022			2021			2022			2021			Amount			Pct.
Test and measurement		$	6,059			$	5,327				79.8	%			65.1	%		$	732				13.7	%
Radio, baseband, software			1,537				2,857				20.2	%			34.9	%			(1,320	)			-46.2	%
Total net revenues		$	7,596			$	8,184				100.0	%			100.0	%		$	(588	)			-7.2	%

Net consolidated revenues decreased 7.2% due to lower sales of our digital signal processing cards and lower software sales at our RBS segment. The lower software revenue is the result, in part, of more volatile quarter to quarter revenue recognition patterns due to the timing, delivery and complexity of RBS projects. This was only partially offset by higher revenue at our T&M segment due primarily to higher orders for our legacy T&M products.

Gross Profit (in thousands)

		Three months ended March 31,
		Gross Profit			Gross Profit %			Change
		2022			2021			2022			2021			Amount			Pct.
Test and measurement		$	3,508			$	3,054				57.9	%			57.3	%		$	454				14.9	%
Radio, baseband, software			847				1,800				55.1	%			63.0	%			(953	)			-52.9	%
Total gross profit		$	4,355			$	4,854				57.3	%			59.3	%		$	(499	)			-10.3	%

Consolidated gross profit declined 10% due to lower sales of higher margin software at our RBS segment. This was only partially offset by T&M gross profit which increased due to higher revenues.

Operating Expenses (in thousands)

		Three months ended March 31,
		Operating Expenses			% of Revenue			Change
		2022			2021			2022			2021			Amount			Pct.
Research and development		$	1,159			$	1,156				15.3	%			14.1	%		$	3				0.3	%
Sales and marketing			1,260				1,195				16.6	%			14.4	%			65				5.4	%
General and administrative			3,392				2,853				44.7	%			34.9	%			539				18.9	%
Total operating expenses		$	5,811			$	5,204				76.5	%			63.6	%		$	607				11.7	%

Research and development expenses were flat with the prior year as modest declines in headcount costs at RBS due to allocations to customer projects were offset by higher third party expenses.

Sales and marketing expenses increased 5.4% due to higher headcount and marketing expenses.

General and administrative expenses increased 18.9% due primarily to expenses associated with the divestiture of Microlab of approximately $530,000 and higher stock based compensation expense which increased $215,000 from the prior year due to equity grants to employees which were offset by lower legal, accounting, bonus and other miscellaneous expenses.

Loss on Extinguishment of Debt

The loss on extinguishment of debt represents the write off of unamortized debt costs associated with our Term Loan Facility with Muzinich BDC and Credit Facility with Bank of America N.A. which were repaid in full and terminated on March 1, 2022.

Other Income/(Expense)

Other income increased $74,000 primarily due to sublease income as a result of our sublease arrangement with RF Industries Ltd. as well as higher gains on sales of assets.

Interest Expense

Consolidated interest expense decreased $120,000 due primarily to the termination of our Term Loan Facility and Credit Facility on March 1, 2022.

Taxes

Consolidated tax benefit increased $706,000 from the prior year period due to a higher loss from continuing operations before taxes.

Net loss from continuing operations

Consolidated net loss from continuing operations for the first quarter 2022 increased $998,000 primarily due to lower gross profit driven by lower RBS revenue and margin, higher operating expenses and a loss on extinguishment of debt. This was only partially offset by higher other income, lower interest expense and a higher tax benefit recognized in the quarter.

Net income from discontinued operations, net of tax

Net income from discontinued operations, net of tax in the first quarter of 2022 is comprised of the pre divestiture net income of Microlab of $158,000 and the net gain on sale of Microlab of approximately $16.4 million net of tax provision of approximately $4.9 million.

Net income from discontinued operations, net of tax in the first quarter of 2021 is comprised of the results of Microlab of $335,000 net of tax provision of $93,000.

LIQUIDITY AND CAPITAL RESOURCES

On March 1, 2022 the Company completed the divestiture of Microlab and received net proceeds of $22.8 million, of which, the Company used approximately $4.1 million and $600,000 to repay in full and terminate the Muzinich Term Loan Facility and Bank of America Credit Facility, respectively. As of March 31, 2022 the Company's only debt obligation is the CIBLS loan in the U.K. which has an outstanding principal balance of $329,000 as of March 31, 2022 and is more fully described in Note 4 of the consolidated financial statements. The Company expects to repay in full the CIBLS loan prior to the expiration of the principal and interest holiday which expires on July 1, 2022

As of March 31, 2022 our consolidated cash balance was approximately $19.1 million. We expect our cash balance and cash generated from operations will be sufficient to meet our liquidity needs for at least 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 fact that the Company will no longer benefit from the performance of the Microlab brand which historically accounted for a substantial portion of our consolidated revenue and that we will be entirely dependent on the RBS and T&M segments.

The Microlab divestiture will be treated as a sale of the assets and liabilities for U.S. federal and applicable state income tax purposes. The Company has approximately $14.9 million of U.S. federal net operating loss carryforwards and approximately $41.2 million of New Jersey state net operating loss carryforwards as of December 31, 2021. We expect to utilize in 2022 all of our federal net operating loss carryforwards and approximately 50% of our state net operating loss carryforwards to offset the taxable gain generated from the Microlab divestiture. Accordingly, in the future, the Company could be subject to cash income taxes which is expected to reduce our liquidity. Additionally, CommAgility benefits from a research and development deduction which significantly reduces the cash needed to pay taxes in the UK.

Operating Activities

Cash used by operating activities increased $3.3 million from the prior year period due to the loss from operations in the quarter as well as an increase in working capital of $2.2 million due primarily to an increase in accounts receivable driven by lower accounts receivable balances at December 31, 2021.

Investing Activities

Cash provided by investing activities increased $22.7 million from the prior year period due to the net proceeds received related to the Microlab divestiture of $22.8 million.

Financing Activities

Cash used by financing activities increased $3.6 million due primarily to the full repayment of the Term Loan Facility on March 1, 2022.

Off-Balance Sheet Arrangements

Other than contractual obligations incurred in the normal course of business, the Company does not have any off-balance sheet arrangements.

Critical Accounting Policies

There have been no changes in our critical accounting policies or significant accounting estimates as disclosed in our 2021 Form 10-K.

Forward Looking Statements

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 and cash generated by operations will be sufficient to meet our liquidity needs for at least the next twelve months and our expectation to repay our CIBLS loan before the expiration of the principal and interest holiday. Investors are cautioned that such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results, including, among others, the ongoing impact that the conflict in Ukraine and related sanctions have had and may continue to have on our business, supply chain, transportation costs, and our backlog; the impact that the evolving COVID-19 pandemic has had and may continue to have on our supply chain, human capital and the general economy in the future; the potential impact of inflation on our business and the economy in general, 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 evolving business plan; the impact of competitive products and pricing; our abilities to protect our intellectual property rights and our ability to manage risks related to our information technology and cyber security as well as other risks and uncertainties set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2021. These forward-looking statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

ITEM 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, as of the end of the period covered by this report, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended. Our disclosure controls and procedures are designed to ensure that the information required to be included in our Securities and Exchange Commission ("SEC") reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that the information relating to Wireless Telecom Group, Inc., including our consolidated subsidiaries, is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the period covered by this report, our disclosure controls and procedures are effective.

(b) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, as described in our 2021 Annual Report on Form 10-K.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

No material changes in the quarter.

Item 1A. Risk Factors

There have been no material changes in our risk factors as previously disclosed in Part I, Item 1A of our Annual Report on Form10-K for the year ended December 31, 2021.

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

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number		Exhibit Description
3.1		Amended and Restated By-laws, as amended on April 7, 2020 (incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q filed with the SEC on May 13, 2020, Commission File No. 001-11916)
10.1		Membership Interest Purchase Agreement dated as of December 16, 2021 by and among RF Industries Ltd., Wireless Telecom Group, Inc. and Microlab/FXR LLC (incorporated by reference to Exhibit 10.1 to our Form 8-K filed with the SEC on December 20, 2021, Commission File No. 001-11916)
10.2		Amended and Restated Executive Employment Agreement by and between Wireless Telecom Group, Inc. and Timothy Whelan dated January 31, 2022 (incorporated by reference to Exhibit 10.43 to our Current Report on Form 10-K filed with the SEC on March 17, 2022, Commission File No. 001-11916)
10.3		Amended Employment Letter Agreement, dated January 31, 2022, between Wireless Telecom Group, Inc. and Michael Kandell (incorporated by reference to Exhibit 10.44 to our Current Report on Form 10-K filed with the SEC on March 17, 2022, Commission File No. 001-11916)
10.4		Amended Employment Letter Agreement, dated January 31, 2022, between Wireless Telecom Group, Inc. and Daniel Monopoli (incorporated by reference to Exhibit 10.45 to our Current Report on Form 10-K filed with the SEC on March 17, 2022, Commission File No. 001-11916)
10.5		Amended Employment Letter Agreement, dated January 31, 2022, between Wireless Telecom Group, Inc. and Alfred Rodriguez (incorporated by reference to Exhibit 10.44 to our Current Report on Form 10-K filed with the SEC on March 17, 2022, Commission File No. 001-11916)
10.6		Sublease Agreement dated as of December 16, 2021, by and between Boonton Electronics Corp. and RF Industries Ltd.
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101**		The following financial information from Wireless Telecom Group, Inc.'s Quarterly Report on Form 10-Q for the three months ended March 31,2021, filed on May 13, 2021, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income/(Loss), (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Shareholders' Equity, and (v) the Notes to the Consolidated Financial Statements.
101.INS**		INLINE XBRL INSTANCE DOCUMENT
101.SCH**		INLINE XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
101.CAL**		INLINE XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT
101.DEF**		INLINE XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT
101.LAB**		INLINE XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT
101.PRE**		INLINE XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

** Furnished herewith.

SIGNATURES

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

	WIRELESS TELECOM GROUP, INC.
Dated: May 11, 2022	By:	/s/ Timothy Whelan
		Timothy Whelan
		Chief Executive Officer

Dated: May 11, 2022	By:	/s/ Michael Kandell
		Michael Kandell
		Chief Financial Officer

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