ARC Wireless Solutions Reports 2nd Quarter Net Income and Odd-lot Stock Repurchase.

Business Editors/High-Tech Writers

WHEAT RIDGE, Colo.--(BUSINESS WIRE)--Aug. 8, 2002

ARC Wireless Solutions, Inc. (OTBBB:ARCS) today announced that net income was $141,000 for the quarter ended June 30, 2002 as compared with a net loss of ($84,000) for the same period last year.

For the six month period ended June 30, 2002, net income was $605,000 as compared with a net loss of ($873,000) for the six months ended June 30, 2001.

Net income for both the current three month and six month periods reflects a benefit from using some of the component inventory acquired at below-market costs from Ball Aerospace & Technologies Corp ("BATC") for production of base station antennas. Based on the Company's estimates of current replacement costs for the BATC inventory included in cost of goods sold during the second quarter, the Company estimates that the benefit resulting from inventory purchased at below-market costs was between $50,000 and $100,000 for the quarter ended June 30, 2002 and between $200,000 and $300,000 for the six month period ended June 30, 2002. Depending on the product mix, the Company may realize additional benefit from the below-market cost of the BATC inventory in the immediate future, but the benefit will diminish as the inventory is depleted and replaced with inventory purchased at current market prices. Net income for the current six month period also includes a $226,000 gain from debt settlements. There is no gain from debt settlements for the six months ended June 30, 2001.

Also for both the three and six month periods ended June 30, 2002, goodwill amortization expense was $0, as compared with $248,000 and $498,000, respectively, for the corresponding periods of the prior year. This is because the Company no longer records amortization of goodwill as a result of the adoption of SFAS 142. EBITDA for the three and six month periods ended June 30, 2002 was $291,000 and $897,000, as compared with $276,000 and ($168,000), respectively, for the same periods last year.

Net sales for the three month period were $7,951,000 as compared with $7,968,000 for the same period last year. Sales for the six months ended June 30, 2002 were $15,957,000 as compared with $16,067,000 for the same period last year.

Sales at the Wireless Communications Products Division in Colorado increased 141% to $1,782,000 for the current three month period from $739,000 for the three month period ended June 30, 2001, and increased 187% to $3,741,000 for the six month period ended June 30, 2002 as compared with $1,305,000 for the same period of the prior year, primarily as a result of the addition of the base station antenna products, the introduction of the new Freedom Antenna(TM) and the increase in 802.11 antenna system sales. As compared with the three and six month periods of the prior year, sales at Winncom Technologies decreased from $6,840,000 to $6,082,000 for the three month period and from $14,000,000 to $11,987,000, respectively, for the six month period. Winncom has experienced a significant increase in unit sales in 2002, and has increased its product offerings and expanded its customer base to include several new domestic and international customers. However, per unit component selling prices have dropped dramatically over the past twelve months, which has had a negative effect on Winncom's gross revenue.

Randall P. Marx, Chief Executive Officer, stated, "We are pleased to report that we have been successful in increasing our product offerings and expanding our customer base in this particularly challenging year. Our base station antenna and 802.11 business remains consistent and we continue to gain momentum with the new Freedom Antenna(TM). Also, Winncom has added several new product and software solutions to complement its existing wireless systems and solutions."

The Company also announced today that within the next several days it will make an offer to repurchase shares of its common stock at a price of $.35 per share from stockholders owning 99 or fewer shares as of August 6,2002. The Company estimates that there are fewer than 500 stockholders owning 99 or fewer shares.

"To the extent that stockholders accept this 'odd-lot repurchase offer', it will enable us to reduce the yearly recurring costs of servicing stockholder accounts by repurchasing the Company's stock at a time when we believe it is undervalued," added Mr. Marx.

About ARC Wireless Solutions, Inc.

ARC Wireless Solutions, Inc. is a wireless technology company that is involved in marketing, distributing and servicing, as well as selective design and manufacturing, of a broad range of components and network products and accessories. The Company develops, manufactures and markets proprietary products, including base station and other antennas, through its Wireless Communications Products Division; it is a value added distributor of wireless networking products through its Winncom Technologies Corp. subsidiary; and it designs, manufactures and distributes cable assemblies for cable, satellite and other markets through its Starworks Wireless, Inc. subsidiary. The Company's products and systems are marketed through the Company's internal sales force, OEMs, numerous reseller distribution channels, retail, and the Internet. ARC Wireless Solutions, Inc., together with its Wireless Communications Products Division and its Starworks Wireless subsidiary, is headquartered in Wheat Ridge, Colo. The Company's Winncom Technologies Corp. subsidiary is located in Solon, Ohio. For more information about the Company and its products, please visit our web sites at www.arcwireless.net, www.antennas.com, www.winncom.com and www.starworkswireless.com.

This is not a solicitation to buy or sell securities and does not purport to be an analysis of the Company's financial position. This Release contains forward-looking statements within the meaning of the Securities Exchange Act of 1934. Although the Company believes that the expectations reflected in the forward-looking statements and assumptions upon which forward-looking statements are based are reasonable, it can give no assurance that such expectations and assumptions will prove to have been correct. See the Company's most recent Quarterly Report on Form 10-QSB and Annual Report on Form 10-KSB for additional statements concerning important factors, such as demand for products, manufacturing costs, and competition, that could cause actual results to differ materially from the Company's expectations.