Edgar Filing: RELM WIRELESS CORP

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 12, 2004
REGISTRATION NO. 333-75512
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE
AMENDMENT NO. 2 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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RELM WIRELESS CORPORATION
(Exact name of Registrant as Specified in its Charter)

NEVADA 3600 59-3486297
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification No.)

---------------
DAVID P. STOREY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
RELM WIRELESS CORPORATION
7100 TECHNOLOGY DRIVE 7100 TECHNOLOGY DRIVE
WEST MELBOURNE, FLORIDA 32904 WEST MELBOURNE, FLORIDA 32904
(321) 984-1414 (321) 984-1414
(Name, Address, Including Zip Code, and Telephone Number, (Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Including Area Code, of Agent for Service)
Offices)

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COPIES OF COMMUNICATIONS TO:

ANDREW E. BALOG, ESQ.
GREENBERG TRAURIG, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
TELEPHONE NO.: (305) 579-0500
FACSIMILE NO.: (305) 579-0717
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
---------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS DECLARED EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION - DATED APRIL 12, 2004
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PROSPECTUS

RELM
WIRELESS CORPORATION

2,982,859 SHARES OF

COMMON STOCK UNDERLYING

COMMON STOCK PURCHASE WARRANTS
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o This prospectus relates to the initial issuance and sale of up
to 2,982,859 shares of our common stock upon the exercise of
the warrants that we issued in connection with our public
rights offering completed on March 22, 2002 (including the
warrants issued upon exercise of our standby underwriter's
overallotment option effective on May 17, 2002). We issued an
aggregate of 3,468,750 warrants in connection with our public
rights offering (including 277,500 warrants underlying an
option granted to the standby underwriter for its own
account). As of March 19, 2004, 467,448 shares of our common
stock had been issued as a result of the exercise of the
warrants generating approximately $466,279 in net proceeds. As
of the date of this prospectus, there are 2,982,859 warrants
outstanding (of which 169,057 warrants are held by the standby
underwriter for its own account). Each warrant entitles the
holder to purchase one share of our common stock at a price of
$1.05 per share, subject to adjustments, commencing on
February 12, 2003 through February 11, 2006. Warrants not
exercised by February 11, 2006 will automatically expire.

o Subject to the provisions of the warrant agreement, the
warrants may be redeemed at our option on not less than 30
days' prior written notice for a redemption price of $0.10 per
warrant if for any twenty (20) consecutive days during such
period the last reported sales price of our common stock for
each trading day during such period is at least 150% of the
exercise price of the unit warrants ($1.575). The price of our
common stock currently meets this criteria and we can redeem
the warrants if we elect to do so. In the event we exercise
our right to redeem the warrants, the unit warrants will be
exercisable until the close of business on the day immediately
preceding the date fixed for redemption in such notice. If any
warrant called for redemption is not exercised by such date,
it will cease to be exercisable and the registered holder will
be entitled only to the redemption price of $0.10.

o Our common stock and the warrants are currently quoted on the
over-the-counter ("OTC") Bulletin Board under the symbols
"RELM" and "RELMW," respectively. On April 8, 2004, the
last reported sales prices for our common stock and warrants
on the OTC Bulletin Board were $2.60 per share and $1.60 per
warrant, respectively.

o SEE "RISK FACTORS" ON PAGE 8 OF THIS PROSPECTUS FOR A
DISCUSSION OF RISKS THAT YOU SHOULD CONSIDER BEFORE EXERCISING
THE WARRANTS AND PURCHASING THE UNDERLYING SHARES OF OUR
COMMON STOCK.

----------------------

PER SHARE TOTAL
--------- -----
Public Offering Price of Shares
Underlying Warrants.................... $1.05 $ 2,954,492
Underwriting Commission(1)............. $0.052 $ 146,318
Proceeds to Relm Wireless Corporation
(before expenses)...................... $0.998 $ 2,808,174

----------------------

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(1) Consists of maximum amount which Noble International Investments, Inc., the
standby underwriter of our public rights offering, could be paid in the
form of a fee equal to five percent (5%) of the exercise price of the
warrants for its solicitation of the exercise of the warrants, excluding
the warrants held by them to purchase 169,057 shares of our common stock
for which warrants upon exercise we would receive an additional $177,510.
See "Plan of Distribution - Warrant Solicitation Fees."

Although the shares of our common stock underlying the warrants will
not knowingly be sold to purchasers in states or jurisdictions in which they are
not registered or otherwise qualified for sale, purchasers may buy our common
stock or warrants in the aftermarket or may move to states or jurisdictions in
which our common stock or warrants are not so registered or qualified. In such
event, we may be unable to issue our common stock to those persons desiring to
exercise their warrants unless and until the common stock or warrants are
registered or qualified for sale in the state or jurisdiction in which such
purchasers reside, or an exemption to such registration or qualification exists
in such state or jurisdiction. If we are unable to register or qualify the
common stock and warrants in a particular state or jurisdiction and no exemption
to such registration or qualification is available in such state or
jurisdiction, a holder may have difficulty selling, exchanging or exercising
such warrants in order to realize any economic benefit from the purchase of our
common stock without conducting such sale in a state or jurisdiction in which
our securities are registered or qualified.

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS DETERMINED
WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE NOR HAVE THEY MADE, NOR WILL
THEY MAKE, ANY DETERMINATION AS TO WHETHER ANYONE SHOULD BUY THESE SECURITIES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE DATE OF THIS PROSPECTUS IS __________, 2004.

TABLE OF CONTENTS

PAGE

Disclosure Regarding Forward-Looking Statements...................................................................1

Prospectus Summary................................................................................................2

Risk Factors......................................................................................................8

Use of Proceeds..................................................................................................13

Price Range Of Common Stock and Warrants.........................................................................13

Dividend Policy..................................................................................................14

Capitalization...................................................................................................14

Selected Historical Consolidated Financial and Operating Data....................................................15

Selected Quarterly Financial Data................................................................................16

Management's Discussion and Analysis of Financial Condition and Results of Operations............................18

Business.........................................................................................................29

Management.......................................................................................................37

Principal Shareholders...........................................................................................45

Certain Transactions.............................................................................................47

Description of the Unit Warrants.................................................................................47

Description of Capital Stock.....................................................................................51

Certain U.S. Federal Tax Considerations..........................................................................55

Plan of Distribution.............................................................................................60

Where You Can Find More Information..............................................................................61

Legal Matters....................................................................................................61

Experts..........................................................................................................61

Index to Consolidated Financial Statements......................................................................F-1

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

We believe that it is important to communicate our future expectations
to our security holders and to the public. This prospectus, therefore, contains
statements about future events and expectations which are "forward-looking
statements" within the meaning of Sections 27A of the Securities Act of 1933 and
21E of the Securities Exchange Act of 1934, including the statements about our
plans, objectives, expectations and prospects under the headings "Business" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." You can expect to identify these statements by forward-looking
words such as "may," "might," "could," "would," "anticipate," "believe," "plan,"
"estimate," "project," "expect," "intend," "seek" and other similar expressions.
Any statement contained in this prospectus that is not a statement of historical
fact may be deemed to be a forward-looking statement. Although we believe that
the plans, objectives, expectations and prospects reflected in or suggested by
our forward-looking statements are reasonable, those statements involve risks,
uncertainties and other factors that may cause our actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by these forward-looking statements, and we
can give no assurance that our plans, objectives, expectations and prospects
will be achieved.

Important factors that might cause our actual results to differ
materially from the results contemplated by the forward-looking statements are
contained in the "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" sections of this prospectus as
well as elsewhere in this prospectus, and include, among others, the following:

o Substantial losses incurred by the Company prior to 2003;

o changes in customer preferences;

o our inventory and debt levels;

o quality of management, business abilities and judgment of our
personnel;

o the availability, terms and deployment of capital;

o competition in the land mobile radio industry;

o limitations in available radio spectrum for use of land mobile radios;

o changes or advances in technology; and

o general economic and business conditions.

We assume no obligation to publicly update or revise any
forward-looking statements made in this prospectus, whether as a result of new
information, future events, changes in assumptions or otherwise, after the date
of this prospectus.

PROSPECTUS SUMMARY

This summary highlights selected information and does not contain all
the information that is important to your investment decision. You should read
the entire prospectus, including "Risk Factors" and our financial statements and
related notes, before deciding to exercise the warrants and invest in our common
stock. As used in this prospectus, the terms "Company," "we," "us," "our," or
"Relm Wireless" mean collectively Realm Wireless Corporation and all of its
consolidated subsidiaries.

SUMMARY OF THE OFFERING

Common stock offered................................. 2,982,859 shares of our common stock upon the exercise
of the warrants that we issued in connection with our
public rights offering completed on March 22, 2002
(including the warrants issued upon exercise of our
standby underwriter's overallotment option effective on
May 17, 2002). We issued an aggregate of 3,468,750
warrants in connection with our public rights offering
(including 277,500 warrants underlying an option
granted to the standby underwriter for its own
account). As of March 19, 2004, 467,448 shares of our
common stock had been issued as a result of the
exercise of the warrants generating approximately
$466,279 in net proceeds. As of the date of this
prospectus, there are 2,982,859 warrants outstanding
(of which 169,057 warrants are held by the standby
underwriter for its own account). Because the warrants
were issued together with common stock as part of
detachable units in our public rights offering, we
refer to the warrants in this prospectus as the "unit
warrants." Each unit warrant entitles the holder to
purchase one share of our common stock at an exercise
price of $1.05 per share (as adjusted from $1.08 per
share to give effect to our August 2003 private sale of
500,000 shares of our common stock at $0.60 per share),
and is exercisable at any time on or after February 12,
2003 until February 11, 2006.

Subject to the provisions of the warrant agreement, the
warrants may be redeemed at our option on not less than
30 days' prior written notice for a redemption price of
$0.10 per warrant if for any twenty (20) consecutive
days during such period the last reported sales price of
our common stock for each trading day during such period
is at least 150% of the exercise price of the unit
warrants ($1.575). The price of our common stock
currently meets this criteria and we can redeem the
warrants if we elect to do so. In the event we exercise
our right to redeem the warrants, the unit warrants will
be exercisable until the close of business on the day
immediately preceding the date fixed for redemption in
such notice. If any warrant called for redemption is not
exercised by such date, it will cease to be exercisable
and the registered holder will be entitled only to the
redemption price of $0.10.

Common stock outstanding prior to this offering...... 9,840,639 shares (1)

Common stock outstanding immediately following this 12,823,498 shares(1)
offering..........................................

Assuming that all of the unit warrants are exercised,
Use of proceeds...................................... we expect to receive net proceeds of approximately
$2,733,174 from the sale of the underlying shares of
our common stock offered hereby, after deduction of a
five percent (5%) fee which we may have to pay to Noble
International Investments, Inc., the standby
underwriter in the public rights offering, for
solicitation of the exercise of the unit warrants, and
the expenses of this offering, of approximately
$75,000. In addition, we may receive up to $177,510 of
proceeds for the exercise of the unit warrants held by
the standby underwriter. We intend to use the net
proceeds from this offering for working capital
purposes, which will include the further expansion of
our digital LMR product line.

OTC Bulletin Board symbols:

Common stock......................................... RELM

Warrants............................................. RELMW

(1) Unless we state otherwise, the information in this prospectus concerning the
number of shares of our common stock outstanding, currently and after this
offering, is based on the number of shares of common stock outstanding as of
April 6, 2004 and does not include 3,907,290 shares of our common stock related
to stock options and other warrants and convertible debt.

WHO WE ARE

OVERVIEW

RELM Wireless Corporation, in business for over 56 years, designs,
manufactures and markets wireless communications products, principally two-way
land mobile radios (LMR) and related products. Our products are marketed using
three distinct brand names, BK Radio, RELM, and Uniden. These products are sold
in two primary markets:

1. The government and public safety market, which includes fire,
rescue, law enforcement, and emergency medical personnel, as well as the
military and various agencies of federal, state, and local governments; and

2. The business and industrial market, which consists of enterprises
requiring fast, inexpensive communication among a discrete group of users.
Examples include hotels, construction companies, schools, airports, and taxies.

Generally, BK Radio-branded products serve the government and public
safety market. The business and industrial market is served by RELM and
Uniden-branded products.

EVENTS OF 2003

DIGITAL PRODUCTS

In March 2003, our new VHF digital portable radio, the DPH, was
approved by the Federal Communications Commission (FCC) for use in the United
States. Shortly thereafter, the DPH was added to contracts with the U. S.
General Services Administration (GSA) and the U. S. Department of Interior
(DOI). The BK Radio-branded DPH is compliant with the Project 25 standard
established by the Association of Public Safety Communication Officials (APCO).
Project 25 is being increasingly adopted by government and public safety, LMR
users nationwide. The DPH is the first in a broad family of digital products
that we plan to introduce over the next two years into both of our primary
markets.

U. S. DEPARTMENT OF INTERIOR (DOI) CONTRACT

In July 2003, we were awarded contract participation to supply to the
DOI with digital LMR equipment that is compliant with APCO's Project 25
specifications.

The contract, originally established in November 2002, is a
fixed-price, indefinite-delivery and indefinite-quantity contract that is open
to all federal agencies. It includes one base year with options for four
additional years. Under the contract, U.S. government agencies may purchase up
to $1 billion of APCO Project 25 LMR equipment. The contract has no minimum
purchase requirements, and purchases may fluctuate from period to period subject
to the $1 billion cap.

REVOLVING CREDIT FACILITY

On August 29, 2003, we entered into an agreement with a new lender. The
agreement provides for a revolving line of credit of up to $2.5 million for one
year. The line is secured by substantially all of our assets, consisting
principally of our trade receivables and inventory. Concurrent with the
refinancing transaction, three funds affiliated with our directors purchased an
aggregate of 500,000 shares of our common stock at $0.60 per share, which was
the closing market price on the date the transaction was approved. The proceeds
of the transaction were used to pay off our previous revolving credit facility
and provide working capital to be used in executing our business plans,
including the expansion of our digital product line. In February 2004, our
lender increased the credit facility by $1 million to $3.5 million, of which
$1,272,000 was outstanding as of December 31, 2003, and the maturity date was
extended to January 1, 2005.

NASDAQ SMALL-CAP MARKET

On April 29, 2003, the Company was notified by Nasdaq Listing
Qualifications that it had not regained compliance with the minimum $1.00
closing bid price per share requirement as set forth in marketplace rule
4310(c)(4). The Company was not eligible for an additional 90 calendar day
compliance period because it did not meet the initial inclusion requirements of
the Nasdaq SmallCap Market under Marketplace Rule 4310(c)(2)(A). Accordingly,
the Company's common stock and unit warrants were delisted from the Nasdaq
SmallCap Market at the opening of business on May 8, 2003. The Company's common
stock and unit warrants became immediately eligible for quotation on the OTC
Bulletin Board effective with the open of business on May 8, 2003. The OTC
Bulletin Board symbol for the Company's common stock and unit warrants are
"RELM" and "RELMW," respectively.

Our principal executive offices are located at 7100 Technology Drive,
West Melbourne, Florida 32904 and the telephone number is (321) 984-1414. More
information about our products and us is also available through the Internet at
"www.Relm.com." The information provided on our website is not incorporated into
this prospectus.

Relm Wireless Corporation is the surviving corporation in the January
30, 1998 reincorporation merger of Adage, Inc. into Relm Wireless Corporation,
its wholly owned subsidiary.

As a result of the reincorporation, each share of Adage common stock
outstanding immediately prior to the reincorporation was converted, effective as
of January 30, 1998, into one share of our common stock and the trading symbol
for the shares was changed from "ADGE" to "RELM."

SUMMARY CONSOLIDATED FINANCIAL DATA

In the table below, we provide you with selected financial data for the
years ended December 31, 2003, 2002, 2001, 2000 and 1999, and balance sheet data
as of December 31, 2003, 2002, 2001, 2000 and 1999, which are derived from and
should read in conjunction with our audited consolidated financial statements
included elsewhere herein. See also "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere herein.

STATEMENT OF OPERATIONS DATA (IN THOUSANDS, EXCEPT PER SHARE DATA)

YEAR ENDED DECEMBER 31
----------------------------------------------------------------
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------

Sales ........................... $ 19,728 $ 15,978 $ 22,809 $ 21,054 $ 22,404

Income (Loss) From Continuing
Operations ................... 881 (3,631) 122 (1,162) (2,294)

Loss From Discontinued Operations -- -- -- (266) --
---------- ---------- ---------- ---------- ----------

Net Income (Loss) ............... $ 868 $ (3,631) $ 122 $ (1,428) $ (2,294)
========== ========== ========== ========== ==========

Income (loss) Per Share-Basic:

Income (loss) Per Share From
Continuing Operations ........ $ 0.10 $ (0.47) $ 0.02 $ (0.22) $ (0.45)

Income (loss) Per Share From
Discontinued Operations ...... -- -- -- (0.05) --
---------- ---------- ---------- ---------- ----------
Net Income (loss) Per Share ... $ 0.10 $ (0.47) $ 0.02 $ (0.27) $ (0.45)
========== ========== ========== ========== ==========

Income (loss) Per Share-Diluted:
Income (loss) Per Share From
Continuing Operations ......... $ 0.09 $ (0.47) $ 0.02 $ (0.22) $ (0.45)

Income (loss) Per Share From

Discontinued Operations ....... -- -- -- (0.05) --
---------- ---------- ---------- ---------- ----------
Net Income (loss) Per Share ..... $ 0.09 $ (0.47) $ 0.02 $ (0.27) $ (0.45)
========== ========== ========== ========== ==========

o Results for 2002 include, 1) a $900,000 note receivable valuation
allowance related to the purchase of the assets of the Company's former
paper-manufacturing subsidiary in the first quarter, 2) a collection
allowance of $175,333 for a note receivable from the purchaser of the
assets of our former specialty-manufacturing subsidiary, 3) the
write-off of a technology agreement with a book value of $210,981, 4)
the write-off of an investment banking services agreement with a book
value of $119,851, and 5) $185,270 in costs related to the
restructuring of our sales and marketing organization.

o Results for 2000 include a $984,000 net gain on the sale of our
manufacturing facility and the sale of certain manufacturing and test
equipment.

BALANCE SHEET DATA (IN THOUSANDS)

AS OF DECEMBER 31,
----------------------------------------------------------
2003 2002 2001 2000 1999
------ ------ ------ ------ ------

Working Capital............ $5,273 $5,734 $9,262 $7,679 $5,676
Total Assets............... 12,229 12,856 17,623 18,422 22,853
Long-Term Debt............. 1,272 3,150 6,998 6,353 9,072
Total Shareholders Equity.. 5,985 4,872 6,482 6,360 6,377

RISK FACTORS

You should carefully consider the following risk factors in addition to
the other information contained in this prospectus before exercising the
warrants and purchasing the underlying shares of common stock. The cautionary
statements set forth below and elsewhere in this prospectus should be read in
conjunction with accompanying forward-looking statements included under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business" and elsewhere herein.

WE HAVE INCURRED SUBSTANTIAL LOSSES PRIOR TO 2003

We have a history of substantial losses. We incurred a loss, totaling
$3.6 million for the year ended December 31, 2002. For the fiscal year ended
December 31, 2001 we reported net income of $0.1 million. As of December 31,
2003, we had an accumulated deficit of approximately $20.8 million. We have
taken steps to improve operations, and realized net income of approximately $1.0
million for the year ended December 31, 2003. We cannot, however, assure that we
will achieve or sustain profitable operations in the future.

WE RELY ON OUR CREDIT FACILITY TO FINANCE OPERATIONS

Our loan agreement contains numerous financial and operating covenants.
We are in compliance with these covenants as of December 31, 2003. However,
there can be no assurance that we will not cause an event of default in the
future or that such defaults will be cured or waived. The covenants restrict our
ability to incur additional indebtedness, to pay dividends and other
distributions, to repay other obligations, to create liens or other
encumbrances, to make investments, to engage in transactions with affiliates, to
sell or otherwise dispose of assets and to merge or consolidate with other
entities.

Our failure to comply with covenants contained in the loan agreement
could result in acceleration of the indebtedness. To secure our obligations
under the agreement, we have granted a first priority pledge of, and security
interest in, substantially all of our assets.

When our loan agreement expires, we will need to renew the agreement,
refinance our loan, or raise additional funds from new sources. If we are unable
to renew the loan agreement or find an alternative lender, our operations could
be adversely affected.

We will continue to need capital to fund our operations and finance our
growth, and we may not be able to obtain it on terms acceptable to us or at all.
In addition, our capital requirements in connection with the development,
marketing and sale of our LMR products are, and will continue to be,
significant.

We believe, based upon our current plans, that our existing credit
facility, cash reserves and cash expected to be generated from operations will
provide the funds necessary to satisfy our cash requirements for the next twelve
months.

OUR INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL HEALTH AND LIMIT OUR
ABILITY TO FINANCE FULL OPERATIONS AND PLANNED GROWTH BECAUSE OF DEBT SERVICE
OBLIGATIONS

At December 31, 2003, our total liabilities and debt were approximately
$6.2 million and shareholders' equity was approximately $6.0 million. Our
leverage could have important consequences to you. For example, it could:

o make it more difficult for us to satisfy our obligations with
respect to our indebtedness;

o increase our vulnerability to general adverse economic and
industry conditions;

o limit our ability to fund future working capital, capital
expenditures, acquisitions and general corporate requirements;

o limit our flexibility in planning for, or reacting to, changes
in our business and industry; and

o limit our ability to borrow additional funds.

Our ability to make principal and interest payments on our indebtedness
will depend on our ability to generate cash in the future through sales of our
LMR products. We cannot assure that our available liquidity will be sufficient
to service our indebtedness. Without sufficient funds to service our
indebtedness, we could have serious liquidity constraints and would need to seek
additional financing from other sources, but we may not be able to do so on
commercially reasonable terms, or at all.

OUR INDUSTRY IS CHARACTERIZED BY RAPIDLY CHANGING TECHNOLOGY

Our business could suffer if we are unable to keep pace with rapid
technological changes and product development in our industry. The market for
our LMR products is characterized by ongoing technological development, evolving
industry standards and frequent product introductions. The LMR industry is
experiencing a transition from analog LMR products to digital LMR products. In
addition, a new standard for LMR equipment (the APCO 25 Standard) is being
increasingly adopted and the market demand for APCO 25-compliant products is
growing.

WE DEPEND ON THE SUCCESS OF OUR LMR PRODUCT LINE

We currently depend on our LMR products as our source of revenue. In
1997, we worked to shift our focus to the development and sale of LMR products.
A decline in the price of or demand for LMR products as a result of competition,
technological change, the introduction of new products by us or others, a
failure to manage product transitions successfully, could cause our business,
financial condition and results of operations to suffer. In addition, our future
success will largely depend on the successful introduction and sale of new
analog and digital LMR products. Even if we successfully develop these products,
we cannot guarantee that they will achieve market acceptance.

WE ARE ENGAGED IN A HIGHLY COMPETITIVE INDUSTRY

We face intense competition from other LMR manufacturers, and the
failure to compete effectively could adversely affect our market share and
results of operations. We face intense competition from several companies
currently offering LMR products. The largest producer of LMR products in the
world currently is estimated to have in excess of 70% of the market for LMR
products. This producer is also the world's largest producer of APCO
25-compliant products. Some of our competitors are significantly larger and have
longer operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources than we have.
Some also have established reputations for success in developing and producing
LMR products. These advantages may allow them:

o to respond more quickly to new or emerging technologies and
changes in customer requirements which may render our products
obsolete or less marketable;

o to engage in more extensive research and development;

o to undertake more far-reaching marketing campaigns;

o to be able to take advantage of acquisitions and other
opportunities;

o to adopt more aggressive pricing policies; and

o make more attractive offers to potential employees, strategic
partners and advertisers.

Many of our competitors have established extensive networks of retail
locations and multiple distribution channels, and so enjoy a competitive
advantage over us in these areas as well. We may not be able to compete
successfully and competitive pressures may materially and adversely affect our
business, results of operations and financial condition.

An increase in the demand for APCO Project 25-compliant products, could
benefit competitors who are better financed and have inventories that will meet
such demand. APCO 25-compliant products have already been brought to the market
by several of our competitors. Our first APCO Project 25-compliant portable
radio was brought to market in 2003. Bringing such products to market and
achieving a significant share of the market for these products will continue to
require substantial expenditure of funds to complete development and execute

plans to achieve market penetration. There can be no assurance that we will be
successful in developing and marketing, on a timely basis, fully functional
product enhancements or new products that respond to these and other
technological advances, or that our new products will be accepted by customers.
An inability to successfully develop products could have a material adverse
effect on our business, results of operations and financial condition.

GOVERNMENT AGENCIES MAY INCUR BUDGET DEFICITS AND BUDGETS MAY BE LIMITED

Government budget deficits at the federal, state and local levels
continue to be a spending factor for certain government agencies. We expect
continued prioritization of limited funds for public safety applications. Recent
United States Government budget proposals, however, have indicated potential
funding reductions in areas where our products may be deployed. We do not
anticipate these potential reductions to have a material impact on our business
in 2004.

WE DEPEND ON A FEW MANUFACTURERS TO PRODUCE OUR PRODUCTS

We contract with manufacturers to produce our products and our
dependence on a limited number of contract manufacturers exposes us to certain
risks, including shortages of manufacturing capacity, reduced control over
delivery schedules, quality assurance, production yield and costs. If any of our
manufacturers terminate production or cannot meet our production requirements,
we may have to rely on other contract manufacturing sources or identify and
qualify new contract manufacturers. The lead-time required to qualify a new
manufacturer could range from approximately two to six months. Despite efforts
to do so, we may not be able to identify or qualify new contract manufacturers
in a timely manner and these new manufacturers may not allocate sufficient
capacity to us in order to meet our requirements. Any significant delay in our
ability to obtain adequate quantities of our products from our current or
alternative contract manufacturers could cause our business, financial condition
and results of operations to suffer.

In addition, our dependence on limited and sole source suppliers of
components involves several risks, including a potential inability to obtain an
adequate supply of components, price increases, late deliveries and poor
component quality. Disruption or termination of the supply of these components
could delay shipments of our products. The lead-time required for orders of some
of our components is as much as six months. In addition, the lead-time required
to qualify new suppliers for our components is as much as six months. If we are
unable to accurately predict our component needs, or if our component supply is
disrupted, we may miss market opportunities by not being able to meet the demand
for our products. This may damage our relationships with current and prospective
customers.

WE DEPEND HEAVILY ON SALES TO THE UNITED STATES GOVERNMENT

We are subject to risks associated with our reliance on sales to the
U.S. Government. For the year ended December 31, 2003, approximately 50% of our
LMR sales were to agencies and departments of the federal government. There can
be no assurance that we will be able to maintain this government business. Our
ability to maintain our government business will depend on many factors outside
of our control, including competitive factors, changes in government personnel
making contract decisions, and political factors. The loss of sales to the U.S.
Government would have a material adverse effect on our business, financial
condition and results of operations.

RETENTION OF OUR EXECUTIVE OFFICERS AND KEY PERSONNEL IS CRITICAL TO OUR
BUSINESS

Our success is largely dependent on the personal efforts of our
President and Chief Executive Officer, our Chief Financial Officer, our Vice
President of Operations, our Engineering Vice Presidents and our Sales and
Marketing Vice President. We do not have employment agreements with these
individuals, and we cannot be sure that we will retain their services. The loss
of any of their services could have a material adverse effect on our operations.
In addition, we have not obtained key-person life insurance on any of our
executive officers or key employees.

Our success is also dependent upon our ability to hire and retain
qualified operations, development and other personnel. Competition for qualified
personnel in our industry is intense. There can be no assurance that we will be
able to hire or retain necessary personnel. The inability to attract and retain
qualified personnel could cause our business, financial condition, and results
of operations to suffer.

WE MAY NOT BE ABLE TO MANAGE OUR GROWTH

Acquisitions and other business transactions may disrupt or otherwise
have a negative impact on our business and results of operations. There can be
no assurance that we will complete any additional asset purchases or other
business transactions or that any such transactions which are completed will
prove favorable to our business. We do not intend to seek stockholder approval
for any such transactions unless required by applicable law or regulation. We
hope to grow rapidly, and the failure to manage our growth could adversely
affect our business. Our business plan contemplates, among other things,
continued development of our LMR product lines through internal development as
well as acquisitions, and, as a result, significant growth in our customer base.
This growth and continued development, if it materializes, could place a
significant strain on our management, employees, operations and financial
capabilities. In the event of this expansion, we have to continue to implement
and improve our operating systems and to expand, train, and manage our employee
base. If we are unable to manage and integrate our expanding operations
effectively, our business, results of operations, and financial condition could
be materially and adversely affected.

WE ARE SUBJECT TO GOVERNMENT REGULATION

Failure to comply with government regulations applicable to our
business could result in penalties. Our LMR products are regulated by the
Federal Communications Commission. We believe that we are in substantial
compliance with all applicable federal regulations governing our operations and
we believe that we have obtained all licenses necessary for the operation of our
business. Failure to comply with these requirements and regulations or to
respond to changes in these requirements and regulations could result in
penalties on us such as fines, restrictions on operations or a temporary or
permanent closure of our facility. These penalties could harm our operating
results and cause a decline of our stock price. In addition, there can be no
assurance that we will not be materially adversely affected by existing or new
regulatory requirements or interpretations.

WE ENGAGE IN BUSINESS WITH MANUFACTURERS LOCATED OTHER COUNTRIES

We are beginning to place a substantial amount of emphasis on
manufacturing our product in other countries and, accordingly, we are subject to
special considerations and significant risks not typically associated with
companies operating in the United States. These include the risks associated
with the political, economic and legal environments, among others. Our results
may be affected by, among other things, changes in the political and social
conditions in these countries, and changes in government policies with respect
to laws and regulations, anti-inflation measures, currency conversion and rates
and method of taxation.

The governments of these countries may implement economic reform
policies at any time. It is possible that changes in leadership could lead to
changes in economic policy. Additionally, the laws and regulations applicable to
us may be subject to change, which could have a material adverse effect on our
business.

WE CARRY SUBSTANTIAL QUANTITIES OF INVENTORY

We carry a significant amount of inventory to service customer
requirements in a timely manner. If we are unable sell this inventory over a
commercially reasonable time, we may be required to take inventory markdowns in
the future, which could reduce our net sales and gross margins. In addition, it
is critical to our success that we accurately predict trends in consumer demand,
including seasonal fluctuations, in the future and do not overstock unpopular
products or fail to sufficiently stock popular products. Both scenarios could
harm our operating results.

WE RELY ON A COMBINATION OF CONTRACT, TRADEMARK AND TRADE SECRET LAWS TO PROTECT
OUR INTELLECTUAL PROPERTY RIGHTS

The United States patents that we owned have expired. We have no plans
to renew them. We hold several trademarks related to the "RELM" name and our
product names. As part of our confidentiality procedures, we generally enter
into non-disclosure agreements with our employees, distributors and customers,
and limit access to and distribution of our proprietary information. We also
rely on trade secret laws to protect our intellectual property rights. Although
we believe that trademark protection, trade secret laws and non-disclosure
agreements should prevent another party from manufacturing and selling competing
products under one or more of our trademarks or otherwise violating our
intellectual property rights, there can be no assurance that the steps we have

taken to protect our intellectual property rights will be successful. It may
also be particularly difficult to protect our products and intellectual property
under the laws of certain countries in which our products are or may be
manufactured or sold.

OUR FLUCTUATING QUARTERLY OPERATING RESULTS COULD CAUSE VOLATILITY IN OUR STOCK
PRICE

Our quarterly operating results may fluctuate significantly from
quarter to quarter and may be below the expectations of public market analysts
and investors, resulting in volatility for the market price for our common
stock. Other factors affecting the volatility of our stock price include:

o future announcements concerning us or our competitors;

o the announcement or introduction of technological innovations
or new products by us or our competitors;

o changes in product pricing policies by us or our competitors;

o changes in earnings estimates of us or our competitors by
securities analysts;

o additions or departures of key personnel; and

o sales of our common stock.

RISK OF WAR AND TERRORISM

Terrorist acts or acts of war (wherever located around the world) may
cause damage or disruption to our business, employees, supplies, distributors
and resellers, and customers that could have an adverse effect on our operations
and financial results. The economic uncertainty stemming from the terrorist
attacks of September 11, 2001 may continue. While we cannot predict what impact
a prolonged war on terrorism will have on the United States economy, we plan to
control expenses, continue to invest in our business and make capital
expenditures when they will increase productivity, profitably, or revenue.

WE MAY BE SUBJECT TO COSTLY LITIGATION RESULTING IN AN ADVERSE AFFECT ON OUR
FINANCIAL CONDITION

We are currently involved in two lawsuits as a defendant or plaintiff.
While there is no way to predict the success or failure of any litigation, we
are vigorously defending those actions in which we are defendants. Although we
believe our products and technology do not infringe on any proprietary rights of
others, as the number of competing products available in the market increases
and the functions of those products further overlap, infringement claims may
increase. Any such claims, with or without merit, could result in costly
litigation or might require us to enter into royalty or licensing agreements.
Such royalty or licensing agreements, if required, may not be available on terms
acceptable to us or at all. Any successful infringement claim could have a
material adverse effect upon our business, results of operations and financial
condition. In addition, agreements regarding the purchase or sale of certain
assets and businesses require us to indemnify the purchasers or buyers of such
assets or businesses for any damages they may suffer if third party claims give
rise to losses. One indemnification claim is pending. We cannot guarantee that
there will not be future claims. Any such claims could require us to pay
substantial damages, which could cause our business, financial condition and
results of operations to suffer.

CERTAIN PROVISIONS IN OUR CHARTER DOCUMENTS AND NEVADA LAW MAY DISCOURAGE A
POTENTIAL TAKEOVER

Certain provisions of our articles of incorporation and Nevada law
could discourage or prevent potential acquisitions of our company that
stockholders may consider favorable. Our articles of incorporation authorize the
issuance of 1,000,000 shares of "blank check" preferred stock with such
designations, rights and preferences as may be determined from time to time by
our Board of Directors. Preferred stock could be issued, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of our company, which could be beneficial to our shareholders.

EXERCISE OF THE UNIT WARRANTS AS WELL AS OUTSTANDING STOCK OPTIONS, WARRANTS AND
CONVERTIBLE NOTES MAY CAUSE DILUTION TO EXISTING SHAREHOLDERS AND LIMIT OUR
ABILITY TO RAISE CAPITAL

Existing shareholders (including holders of the unit warrants who
become shareholders upon exercise of the unit warrants) will suffer immediate
dilution in the value of their shares of common stock upon exercise of the unit
warrants. If additional outstanding warrants, options, and convertible notes to
purchase our common stock are exercised or converted at a time when we otherwise
could obtain a price for the sale of shares of our common stock which is higher
than such securities' exercise prices, then existing shareholders (including
holders of the unit warrants who become shareholders upon exercise of the unit
warrants) would suffer dilution in the value of their shares of common stock.
The exercise of the unit warrants as well as the options and other warrants
and/or the conversion of outstanding notes, or the possibility of such exercise
or conversion, may impede our ability to seek financing in the future through
the sale of additional securities.

USE OF PROCEEDS

Assuming that all of the unit warrants are exercised, we expect to
receive net proceeds of approximately $2,733,174 from the sale of the underlying
shares of our common stock offered hereby, after deduction of a five percent
(5%) fee which we may have to pay to Noble International Investments, Inc., the
standby underwriter in the public rights offering, for solicitation of the
exercise of the unit warrants, and the expenses of this offering, of $75,000. In
addition, we may receive up to $177,510 of proceeds for the exercise unit
warrants held by the standby underwriter. We intend to use the net proceeds from
this offering for working capital purposes, which will include the further
expansion of our digital LMR product line.

PRICE RANGE OF COMMON STOCK AND WARRANTS

From July 5, 2001 until May 8, 2003, our common stock and unit warrants
were traded on the NASDAQ SmallCap Market under the symbol "RELM" and "RELM,"
respectively. Prior to trading on the NASDAQ SmallCap Market our common stock
traded on the NASDAQ National Market. The following table sets forth the high
and low closing sale price for our common stock and unit warrants for the
periods indicated, as reported by the NASDAQ SmallCap Market and, with respect
to dates after May 8, 2003, as quoted on the OTC Bulletin Board. These
quotations reflect inter-dealer prices, without retail mark-up, markdown, or
commission and may not necessarily represent actual transactions.

COMMON STOCK WARRANTS(1)
------------ -----------
2002 QUARTER ENDED HIGH LOW HIGH LOW
------------------ ---- --- ---- ---

March 31, 2002 $1.25 $0.83 $0.29 $0.29
June 30, 2002 1.01 0.80 0.45 0.04
September 30, 2002 0.82 0.41 0.19 0.09
December 31, 2002 0.60 0.39 0.20 0.10

2003 QUARTER ENDED HIGH LOW HIGH LOW
------------------
March 31, 2003 $0.60 $0.39 $0.12 $0.12
June 30, 2003 0.75 0.21 0.15 0.10
September 30, 2003 1.60 0.47 0.60 0.11
December 31, 2003 1.80 1.40 0.90 0.52

------------------
(1) The warrants were issued in the first quarter of 2002.

On March 30, 2004, there were 1,233 holders of record of our common
stock and 65 holders of record of our unit warrants, respectively, and on April
8, 2004, the last quoted price of our common stock and warrants were $2.60 per
share and $1.60 per warrant, respectively. Our common stock and unit warrants
were delisted from the Nasdaq SmallCap Market at the opening of business of May
8, 2003 and since then have been quoted on the OTC Bulletin Board under the
symbols "RELM" and "RELMW," respectively.

DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock. We
currently intend to retain our future earnings, if any, to fund the development
and growth of our business and, therefore, do not anticipate paying any cash
dividends in the foreseeable future. Our future decisions concerning the payment
of dividends on the common stock will depend upon our results of operations,
financial condition and capital expenditure plans, as well as such other factors
as the board of directors, in its sole discretion, may consider relevant. In
addition, our existing indebtedness restricts, and we anticipate our future
indebtedness may restrict, our ability to pay dividends.

CAPITALIZATION

The following table shows our capitalization as of December 31, 2003:

o on an actual basis; and

o on an as adjusted basis to reflect the issuance and sale of
(i) 2,813,802 shares of our common stock upon exercise of the
unit warrants at an exercise price of $1.05 per share, after
deduction of a five percent (5%) fee which may be paid to
Noble Investments International, Inc., our standby underwriter
in the public rights offering, for solicitation of the
exercise of the warrants, and estimated offering expenses of
$75,000, and (ii) 169,057 shares of our common stock upon
exercise of the unit warrants held by Noble Investments
International, Inc. at an exercise price of $1.05 per share.

This table should be read in conjunction with "Selected Historical
Consolidated Financial and Operating Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our unaudited
condensed consolidated financial statements and related notes included elsewhere
in this prospectus.

AS OF DECEMBER 31, 2003
---------------------------------
ACTUAL AS ADJUSTED
(IN THOUSANDS)
--------------------------------
(UNAUDITED)

Cash and cash equivalents.................................................... $ 1,293 $ 4,202
============= =============

Convertible subordinated notes............................................... $ 3,150 $ 3,150
Revolving line of credit..................................................... $ 1,272 $ 1,272
Shareholders' equity:
Preferred stock; $1.00 par value; 1,000,000 shares authorized; none
outstanding............................................................ - -
Common stock; $0.60 par value; 20,000,000 shares authorized; 9,073,085
issued and outstanding at December 31, 2003 and 12,055,944 shares, as
adjusted............................................................... 5,443 7,232
Additional paid-in capital................................................ 21,482 22,602
Accumulated deficit....................................................... (20,940) (20,940)
Total shareholders' equity............................................. 5,985 8,894
Total capitalization................................................. $ 10,407 $ 13,316

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA

STATEMENT OF OPERATIONS DATA (IN THOUSANDS, EXCEPT PER SHARE DATA)

YEAR ENDED DECEMBER 31
----------------------------------------------------------------
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------

Sales ........................... $ 19,728 $ 15,978 $ 22,809 $ 21,054 $ 22,404

Income (Loss) From Continuing
Operations ................... 881 (3,631) 122 (1,162) (2,294)

Loss From Discontinued Operations -- -- -- (266) --
---------- ---------- ---------- ---------- ----------

Net Income (Loss) ............... $ 868 $ (3,631) $ 122 $ (1,428) $ (2,294)
========== ========== ========== ========== ==========

Income (loss) Per Share-Basic:

Income (loss) Per Share From
Continuing Operations ........ $ 0.10 $ (0.47) $ 0.02 $ (0.22) $ (0.45)

Income (loss) Per Share-Diluted:
Income (loss) Per Share From
Continuing Operations ......... $ 0.09 $ (0.47) $ 0.02 $ (0.22) $ (0.45)

Income (loss) Per Share From

o Results for 2000 include a $984,000 net gain on the sale of our
manufacturing facility and the sale of certain manufacturing and test
equipment.

BALANCE SHEET DATA (IN THOUSANDS)

AS OF DECEMBER 31,
----------------------------------------------------------
2003 2002 2001 2000 1999
------ ------ ------ ------ ------

SELECTED QUARTERLY FINANCIAL DATA

The following table sets forth a summary of our unaudited financial
quarterly results of operations for each quarter in the two year period ended
December 31, 2003. This information is prepared on the same basis as our audited
financial statements contained elsewhere in this prospectus, and, in our
opinion, includes all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the quarterly information
presented. Please read this information in conjunction with our audited
consolidated financial statements and the related notes included elsewhere in
this prospectus. Historical results for any quarter are not necessarily
indicative of the results that may be expected for any future period.

(IN THOUSANDS, EXCEPT PER SHARE DATA) QUARTERS ENDED
------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
2003 2003 2003 2003
--------- -------- ------------- ------------

FISCAL 2003
Sales.................................. $3,596 $5,231 $5,000 $5,901
Gross profit........................... 1,077 1,765 1,991 2,783
Net income (loss)...................... (377) 122 291 832
Earnings (loss) per share-basic........ (0.04) 0.01 0.03 0.09
Earnings (loss) per share-diluted...... (0.04) 0.01 0.03 0.08

QUARTERS ENDED
---------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
2002 2002 2002 2002
--------- -------- ------------- ------------
FISCAL 2002
Sales.................................. $4,733 $4,950 $3,979 $2,316
Gross profit........................... 1,355 1,538 1,157 168
Net income (loss)...................... (1,016) 3 (395) (2,223)
Earnings (loss) per share-basic........ (0.18) 0.00 (0.05) (0.26)
Earning (loss) per share-diluted....... (0.18) 0.00 (0.05) (0.26)

In the fourth quarter of 2003, we recognized an expense totaling
$140,000 related to the settlement of a legal matter discussed in Note 16 to our
audited consolidated financial statements included elsewhere in this prospectus.

In the fourth quarter of 2002 we recorded adjustments that increased
our net loss by approximately $984,000 to reflect (i) the adjustment of
inventories for slower moving items ($283,000), (ii) the provision for an
uncollectible note receivable from the purchaser of our former
specialty-manufacturing subsidiary ($175,000), (iii) the write-off of the

remaining book value of a technology agreement ($211,000), (iv) the write-off of
the remaining book value of an investment banking agreement ($120,000), and (v)
severance and other costs pertaining the reorganization of our sales and
marketing efforts ($195,000).

Additionally, sales for the fourth quarter of 2002 declined by
$3,400,000 (59.2%) compared to the same period in the prior year. Consequently,
we were unable to absorb manufacturing overhead or cover other fixed costs
($1,240,000).

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction
with the audited consolidated financial statements and related notes included
elsewhere in this prospectus. The discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results could differ materially
from the results contemplated in these forward-looking statements as a result of
factors, including, but not limited to, those under "Risk Factors."

EXECUTIVE SUMMARY

Our operating results improved significantly in 2003 compared to the
prior year. Revenue increased while costs in almost every area of the company
decreased, resulting in net income of approximately $0.9 million, or $0.10 per
basic and $0.09 per fully diluted share, compared to last year's net loss of
($3.6) million, or ($0.47) per basic and fully diluted share.

Revenue growth during the year was primarily the result of orders for
new products; including our BK Radio-brand digital portable radio and our new
line of portable radios targeting business and industrial customers. The digital
portable radio is compliant with the Project 25 standard of APCO. Project 25 is
being increasingly adopted by government and public safety agencies nationwide.
In July 2003, our new digital radio was added to a contract with the U.S.
Department of Interior (DOI). Orders from DOI agencies totaled in excess of $3
million through the remainder of 2003. We also expanded certain initiatives,
most notably in the federal government area, to take advantage of the growing
opportunities available to us as a result of these new products.

Product costs (cost of sales) showed marked improvement for 2003,
totaling 61.4% compared to 73.6% for the prior year. We successfully reduced
product costs through a series of programs that have improved manufacturing
efficiencies. These programs incorporate new, more cost-effective product
designs and the utilization of high-quality contract manufacturers, while
reducing manufacturing support staff and expenses.

Selling, general and administrative costs (SG&A) for 2003 showed a
decrease compared to the prior year. Although spending related to digital
product development programs and certain sales and marketing activities
increased, they were more than offset by decreases in administrative functions
and other non-recurring expenses from 2002. We also recognized an expense
totaling $140,000 related to the March 2004 settlement of a legal matter
described in Item 3 of this report. We anticipate continuing to increase our
investment in digital product development in order to speed the introduction of
additional new digital products in 2004 and 2005.

Further improvement from the prior year was realized because of
one-time losses on notes receivable that were recognized in 2002. These losses
pertained to two notes from the purchasers of the assets of our former paper
manufacturing and specialty-manufacturing subsidiaries. The subsidiaries and
notes were legacies from before 1997 and not at all related to the Company's
current land mobile radio operations.

During the year we secured a new credit facility with a new lender. The
facility, combined with improved operations, provided increased liquidity and
capital resources at an interest rate lower than the most recent rate charged by
our previous lender. We are in compliance with the covenants incorporated in the
associated revolving line of credit agreement. In February 2004, our lender
increased the facility by $1 million to $3.5 million, of which $1,272,000 was
outstanding as of December 31, 2003, and the maturity date was extended until
January 1, 2005.

For the year ended December 31, 2002, we suffered a substantial net
loss and were in default of our then revolving line of credit. These conditions
raised substantial doubt at that time about our ability to continue as a going
concern.

During the following year ended December 31, 2003, we realized net
income of approximately $900,000, or $0.09 per diluted share, and obtained a new
$2.5 million revolving line of credit with a new lender (see Note 8 Debt). In
February 2004, the new revolving line of credit's credit limit was increased by
$1 million to $3.5 million and the maturity date was extended to January 1,
2005. We are in compliance with all terms, conditions and covenants of our new

credit agreement as of December 31, 2003. Accordingly, the line of credit has
been classified as a long-term liability in the accompanying consolidated
balance sheet at December 31, 2003.

Additionally, we brought several new products to market during 2003,
which contributed to increased sales in 2003 compared to 2002. Also,
manufacturing and selling, general and administrative expenses were reduced. Our
business plans for 2004 and beyond anticipate that operations will generate
sufficient working capital to enable us to continue as a going concern. We
believe that we have sufficient resources to execute our plans and strategy.

RESULTS OF OPERATIONS

As an aid to understanding our operating results, the following table
shows items from our consolidated statement of operations expressed as a percent
of sales:

PERCENT OF NET SALES
---------------------------------------
FOR YEAR ENDED DECEMBER 31
2003 2002 2001

Sales 100.0% 100.0% 100.0%
Cost of Products 61.4 73.6 70.8
-------------------------------------------
Gross Margin 38.6 26.4 29.2
Selling, General, and Administrative
Expenses (32.2) (40.5) (26.0)
Loss on notes receivable - (6.7) -
Interest Expense (2.2) (2.9) (2.5)
Other Income 0.3 1.0 -
-------------------------------------------
Pretax Income (loss) 4.5 (22.7) 0.7
Income Tax Expense (0.1) - -
-------------------------------------------
Net Income (loss) 4.4% (22.7%) 0.7%
===========================================

FISCAL YEAR 2003 COMPARED WITH FISCAL YEAR 2002

SALES

Total sales for the year ended December 31, 2003 increased $3.7 million
(23.1%) to approximately $19.7 million from approximately $16.0 million for the
year 2002.

Sales for BK Radio products, targeted for the government and public
safety market of the LMR market, increased approximately $3.5 million (29.6%)
compared to the prior year. The increase in sales for the BK Radio product line,
as well as the increases in total sales, was driven principally by the
introduction of a new digital portable radio, the DPH. The DPH complies with the
Project 25 Standard of APCO. This product received approval from the Federal
Communication Commission in March 2003, and in July 2003 was included on the
U.S. Department of Interior contract for digital LMR equipment. We are
aggressively pursuing additional opportunities with various federal and state
government agencies for this product. Additional Project 25 digital products are
planned for 2004 and 2005.

For the year ended December 31, 2003, sales in the business and
industrial market, served by RELM-branded and Uniden-branded products, increased
approximately $0.2 million (6.0%) when compared to the prior year. During 2003
we introduced a new line of portable radios to address this market, the RELM RP
Series. The RP products are full-featured but low-cost, allowing us to compete
more effectively in the highly competitive business and industrial market. We
also expanded our channels to market for these products. Growth in revenues for
RELM-branded products was partially offset by declines in other products, due in
part to the migration of some customers to the new RP Series.

To capitalize on the advantages of our new products, we expanded our
sales and marketing efforts in 2003. A direct sales professional was added in
the Washington, D.C. area to more effectively pursue opportunities with federal
government agencies. We also established regional direct sales resources in
other parts of the U.S. These efforts are under the direction of a sales and
marketing management team that was put in place in 2003. As sales increase we
anticipate further expanding sales and marketing initiatives.

COST OF SALES AND GROSS MARGINS

Cost of sales as a percentage of sales for the year ended December 31,
2003 decreased to 61.4% from 73.6% last year. Continuing programs initiated in
2000 further expanded our use of contract manufacturing resources. All of our
products are now produced using such resources. Our contract manufacturing
relationships have improved efficiencies and resulted in lower material and
labor costs for all our products. They have enabled us to also reduce our
internal manufacturing support expenses. Furthermore, increased sales volumes
have enabled us to more fully utilize and absorb the smaller base of
manufacturing support expenses. As volumes increase, we believe additional
efficiencies and cost reductions may be realized.

We continuously evaluate manufacturing alternatives to further reduce
our product costs. We anticipate that the current contract manufacturing
relationships or comparable alternatives will be available to the company in the
future.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general, and administrative expenses (SG&A) include
commissions, marketing, sales, engineering, product development, management
information, accounting and headquarters. For the year ended December 31, 2003,
SG&A expenses decreased approximately $126,000 (2.0%) to $6.4 million or 32.2%
of sales from $6.5 million or 40.5% of sales for the prior year.

This decrease is primarily the result of reduced administrative
staffing and expenses as well as the completion of certain engineering
initiatives. Also, several non-recurring expenses were recognized in the prior
year, all of which pertained to old business lines and were unrelated to our
current LMR operations. They included the following items: (1) writing-off the
unamortized cost ($211,000) of a technology license, 2) writing-off the
unamortized cost ($120,000) of an investment banking agreement, and 3) severance
and other expenses ($195,000) associated with restructuring our sales and
marketing organization.

The aforementioned decreases enabled us to expand our digital
development program in 2003, with the objective of speeding the completion of
additional Project 25 products to complement the DPH. Bringing such products to
market, and achieving a significant share of the market will continue to require
substantial investment to complete research and development and to achieve
market penetration.

Our internal development efforts are focused entirely on our digital
product development program. During 2003, expenses related to this project
totaled approximately $0.8 million. We estimate that these costs will total
approximately $1.2 million in 2004, and will be funded from existing cash
reserves and working capital from operations. This project is planned to yield
approximately 17 products through 2005. We anticipate that these products will
be the main source of revenue growth in the future.

We also increased our investment in sales and marketing initiatives
during 2003 to capitalize on the advantages of our new products. A direct sales
professional was added in the Washington, D.C. area to more effectively pursue
opportunities with federal government agencies. Regional direct sales resources
were placed in other parts of the U.S. Starting in the first quarter of 2003, a
new sales and marketing management team was charged with these efforts. As sales
increase we anticipate expanding sales and marketing initiatives. Generally
selling commission expenses vary in approximate proportion to sales. Increased
selling commission expenses in 2003 were driven by sales growth.

General and administrative expenses include a one-time charge of
$140,000 related to the March 2004 settlement of a legal matter described in
Item 3 of this report.

INTEREST EXPENSE

For the year ended December 31, 2003, interest expense decreased by
approximately $14,000 (3.1%) to $442,000 from $456,000 in 2002. We incur
interest expense on our revolving line of credit and our subordinated
convertible notes. The interest rate on our revolving line of credit is variable
and fluctuated with the prime lending rate. The interest rate on the convertible
notes is 8% per annum. The effective interest rate on our revolving line of
credit was lower during 2003 as a result of the reductions in the prime lending
rate, and our new revolving line of credit. Also, primarily as a result of
improved operations, the outstanding principal balance on the revolver and our
new revolver was reduced during the second half of 2003.

INCOME TAXES

Income tax expense for the years ended December 31, 2003 and 2002 was
approximately $13,000 and $0, and represented effective tax rates of 1.3% and
0%. These tax rates are made up of a 34% effective tax rate, the respective
state tax rates where we do business, and changes in valuation allowances
related to deferred tax assets. For tax purposes, as of December 31, 2003 and
2002, we have federal and state net operating loss carryforwards of
approximately $34.0 million and $35.0 million, respectively. These net operating
loss carryforwards begin to expire, for federal and state purposes, in 2010. In
accordance with SFAS Statement No. 109, Accounting for Income Taxes, valuation
allowances are provided against deferred tax assets if, based on the weight of
available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized. We have evaluated the realizability of the
deferred tax assets on our balance sheet and do not believe that we have met the
more likely than not criteria; therefore we have established a valuation
allowance in the amount of approximately $13.1 and $14.4 million against our net
deferred tax assets at December 31, 2003 and 2002, respectively. The federal and
state net operating loss and tax credit carryforwards could be subject to
limitation if, within any three year period prior to the expiration of the
applicable carryforward period, there is a greater than 50% change in ownership
of RELM.

FISCAL YEAR 2002 COMPARED WITH FISCAL YEAR 2001

SALES

Total sales for the year ended December 31, 2002 decreased
approximately $6.8 million (30.0%) to approximately $15.9 million from
approximately $22.8 million for the year 2001.

Sales for BK Radio products, sold primarily to the government and
public safety of the LMR market, decreased $5.1 million (29.0%) compared to the
prior year. This decrease was attributed primarily to a decrease in sales
derived from the USFS and CECOM.

We did not ship any products to CECOM during 2002. During the prior
fiscal year, sales from product shipments to CECOM totaled approximately $2.4
million. The contract under which those shipments were made expired in October
2001. CECOM solicited bids for a new contract in March 2002 and we submitted
proposals. Numerous delays have been encountered by CECOM, and the contract has
not yet been awarded. CECOM has indicated in recent communications that the
solicitation will be canceled and a contract will not be awarded. Accordingly,
we are currently pursuing avenues for providing our products to CECOM under
other existing contracts.

During 2002, budget constraints and contract delays combined to reduce
shipments to the USFS by approximately $3.4 million compared to the prior year.
The USFS is our largest customer representing sales of approximately $3.5
million and $6.9 million for the years ended December 31, 2002 and 2001,
respectively. Due to an extraordinarily active forest fire season, the USFS
experienced a decrease in the funding available for new two-way communications
equipment. Additionally, the USFS contract expired in September 2002, and a new
contract was not awarded until December 2002. Sales from the USFS also decreased
because our mobile radio was not included on the contract for most of 2002. We
had been awarded the mobile portion of the contract in prior years. The mobile
radio has again been awarded to us on the new contract that was issued in
December 2002. We were also awarded the portions of the contact for portable
radios, base stations, and repeaters. We anticipate that the margins that will
be realized under this contract will be consistent with or better than those
realized under the previous contract. The contract does not specify definite
delivery dates or quantities.

For the year ended December 31, 2002, sales in the business and
industrial market, served by RELM-branded and Uniden-branded products, decreased
approximately $1.7 million (50.3%) when compared to the prior year. Customer
demand in this market continued to be weak, reflecting the lack of a sustained
economic recovery. Also, due to engineering delays, our new family of portable
radios, the RP Series, was ready for sale later in the year than originally
anticipated. The RP series is designed as a quality, full-featured, low-cost
line to compete effectively in the business and industrial market. We anticipate
that the margins that will be realized from these products will be consistent
with or better than those realized from our other portable radios.

COST OF SALES AND GROSS MARGINS

Cost of sales as a percentage of sales for the year ended December 31,
2002 was 73.6% compared to 70.8% for the same period last year. Due to the lower
volumes, we did not fully absorb our manufacturing overhead costs, which
adversely impacted cost of sales and gross margins. Responding to lower
production volumes, starting in the fourth quarter of 2002 we reduced
manufacturing support staffing and expenses. Also related to lower volumes,
during the year we increased reserves for slow moving inventory by approximately
$283,000.

Excluding the impact of under-absorption, we continued to decrease
direct product costs (i.e., material and labor). Direct product costs for the
year ended December 31, 2002 were 55.3% compared to 58.2% for the prior year. We
achieved this improvement by continuing to expand our utilization of
high-quality, low-cost contract manufacturers. During 2002 we had agreements
with several contract manufacturers. At the end of 2002 all of our products were
partially or entirely manufactured by these contract manufacturers. These
arrangements, combined with our reductions in manufacturing infrastructure
expenses, began favorably impacting margins in 2002.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general, and administrative expenses (SG&A) include
commissions, marketing, sales, sustaining engineering, product development,
management information, accounting, and headquarters. For the year ended
December 31, 2002, SG&A expenses totaled $6.5 million or 40.5% of sales compared
with $5.9 million or 26.0% for the prior year.

This increase of $550,000 is attributable to the following: (1) the
expansion of our product development initiatives ($321,000) for APCO Project
25-compliant digital products and ESAS systems and (2) charges unrelated to our
current LMR operations, all of which pertained to old business lines of the
company. These charges pertained to a) writing-off the unamortized cost
($211,000) of a digital technology license that we will no longer utilize, b)
writing-off the unamortized cost ($120,000) of an investment banking agreement,
and c) severance and other expenses ($195,000) associated with restructuring our
sales and marketing organization.

The aforementioned increases were partially offset by decreases in
marketing and selling ($94,000) and general and administrative expenses
($203,000). Marketing and selling expenses decreased as a result of lower
selling commission expenses, which was driven by lower revenues. General and
administrative expenses were reduced as certain information systems functions
($121,000) were outsourced and several pending legal matters ($82,000) were
resolved.

LOSS ON NOTES RECEIVABLE

In April 2002, we learned that the purchaser of the assets of the
Company's former paper-manufacturing subsidiary, had ceased operations. The
purchaser owed the Company $900,000 plus accrued interest under the terms of two
secured promissory notes and had defaulted on its obligations to make principal
and interest payments. With guidance from counsel, we evaluated alternatives and
took all prudent actions to maximize the possibility of recovery. However, after
a comprehensive assessment, we believed that the value of the purchaser's assets
and the assets of the guarantor were insufficient to provide any recovery of the
amounts due under the notes. Accordingly, the Company wrote-off the entire
principal amount ($900,000) of the two promissory notes in the first quarter
2002.

During 2002, the purchaser of our former specialty-manufacturing
subsidiary ceased making payments in accordance with a note receivable. The
initial amount of the note was approximately $355,000. Presently, the amount due
under the note is approximately $175,000 plus accrued interest. This note is
derived from the 1997 agreement for the sale of our specialty manufacturing
operation. Since its inception, the terms of the obligation have been
restructured several times to accommodate the purchaser. The last payment was
received in March 2002. Attempts during the second and third quarters 2002 to
contact the purchaser and collect the past-due installment payments have been
unsuccessful. In February 2003, we started legal proceedings to recover the
remaining amount due under the note plus accrued interest. With guidance from
counsel, we believe that we will prevail in these proceedings. However, we have
been unable to ascertain the financial position of the purchaser or their
ability to pay the debt. Accordingly we established a collection allowance in
the fourth quarter 2002 for the entire principal amount of the note, and have
maintained the allowance in 2003.

The businesses and events associated with the purchasers of the assets
of our former subsidiaries are legacies from before 1997. They are not at all
related to land mobile radio (LMR) operations, which have been our focus for the
past several years. We have excluded these obligations from our cash flow
projections and operating plans since 2000. Although the write-off and allowance
impacted 2002 earnings, we anticipate no future impact on the execution of our
core LMR business plan objectives, including our digital product development,
which in February 2003 yielded the introduction of our initial APCO Project 25
compliant digital radio.

INTEREST EXPENSE

For the year ended December 31, 2002, interest expense totaled
approximately $456,000 compared to $579,000 for 2001. We incur interest expense
on our revolving line of credit and on the subordinated convertible notes. The
interest rate on our revolving line of credit is variable and fluctuated with
the prime lending rate. The interest rate on the convertible notes is 8% per
annum. The effective interest rate on our revolving line of credit was lower
during 2002 as a result of the reductions in the prime lending rate. Also,
primarily as a result of improved accounts receivable collections, the principal
balance on the revolver as of December 31, 2002 decreased by $780,000 compared
to the balance at the same time in 2001.

INCOME TAXES

Income taxes represented effective tax rates of 0% for the years ended
December 31, 2002 and 2001. These tax rates are made up of a 34% effective tax
rate, the respective state tax rates where we do business, and changes in
valuation allowances related to deferred tax assets. For tax purposes, as of
December 31, 2002 and 2001, we have federal and state net operating loss
carryforwards of approximately $35.0 million and $29.3 million, respectively.
These net operating loss carryforwards begin to expire, for federal and state
purposes, in 2010.

In accordance with SFAS Statement No. 109, Accounting for Income Taxes,
valuation allowances are provided against deferred tax assets if, based on the
weight of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. We have evaluated the realizability of
the deferred tax assets on our balance sheet and do believe that we have met the
more likely than not criteria; therefore we have established a valuation
allowance in the amount of approximately $14.4 and $12.2 million against our net
deferred tax assets at December 31, 2002 and 2001, respectively.

The federal and state net operating loss and tax credit carryforwards
could be subject to limitation if, within any three year period prior to the
expiration of the applicable carryforward period, there is a greater than 50%
change in ownership of RELM.

INFLATION AND CHANGING PRICES

Inflation and changing prices for the years ended December 31, 2003,
2002, and 2001 have contributed to increases in wages, facilities, and certain
raw material costs. These inflationary effects were more than offset by reduced
manufacturing costs associated our initiatives to utilize low-cost contract
manufacturers.

DIVIDENDS

No cash dividends have been paid with respect to our common stock
during the past five years. We intend to retain our earnings to fund growth and,
therefore, do not intend to pay dividends in the foreseeable future. In
addition, our revolving credit line restricts our ability to pay dividends.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities for the year ended December
31, 2003 totaled approximately $0.2 million compared to $1.5 million for the
prior year. The decrease is primarily attributable to changes in components of
working capital, particularly accounts receivable and inventory, partially
offset by net income and notes receivable that were written off in the prior
year.

The decrease due to changes in working capital is primarily due to
additional trade receivables ($4.9 million) resulting from increased revenues,
particularly in the fourth quarter 2003. Decreased inventory ($1.1 million), the
result of improved revenues from items in existing inventory, helped offset the
change in receivables. Also, during the prior year, we recognized losses on
notes receivable (approximately $1.1 million) pertaining to former subsidiaries
(see "Loss On Notes Receivable"). Also contributing to the decrease in cash
provided from operating activities was the payment of trade payables
(approximately $0.2 million) and decreasing depreciation and amortization
(approximately $0.1 million) as certain assets reached the end of their
depreciation cycle and purchases of capital assets remained low.

Net cash used in investing activities for the year ended December 31,
2003 was approximately $0.1 million, a decrease of approximately $0.1 million
from the prior year. This change was largely related to the non-recurring
purchase during the prior year of a digital technology license. Expenditures for
property, plant and equipment increased slightly ($12,000) due to the purchase
of equipment required for our digital development program. Annual capital
expenditures are expected to increase in 2004 to approximately $0.3 million as
this program is expanded and accelerated. Our new revolving line of credit
contains restrictions on our capital expenditures. We believe that our capital
expenditure plans will be within the provisions of our credit agreement. We
anticipate that capital expenditures will be funded through existing cash
balances, operating cash flow, and new revolving line of credit.

Net cash used in financing activities increased to approximately $0.5
million from zero for the prior year. Cash (approximately $0.7 million) was used
to reduce the balance on our revolving line of credit. This was partially offset
by cash generated ($0.3 million) from the issuance of common stock related to
our new revolving line of credit. During the prior year we generated
approximately $2.0 million, including approximately $0.3 million from the
over-allotment option, in net cash proceeds from a public rights offering, and
reduced our revolving line of credit by approximately $2.0 million. The purpose
of the offering was to provide working capital for the development of our APCO
Project 25-compliant digital product line. The securities offered were "units"
priced at $.90 per unit. A unit was comprised of one share of RELM common stock
and one unit warrant to purchase one share of RELM common stock, exercisable at
$1.08 per share at any time on or after February 12, 2003 and until February 11,
2006. The offering resulted in the sale of 2,775,000 shares of common stock and
unit warrants to purchase 2,775,000 shares of common stock. The warrants are
currently quoted on the OTC Bulletin Board with the symbol RELMW. On May 17,
2002, the underwriter exercised its option to purchase 416,250 additional units
at a purchase price of $0.90 per unit to cover over-allotments.

The exercise price of the unit warrants has been reduced to a share
price of $1.05 from $1.08 as a result of the issuance of common stock related to
our new credit facility and anti-dilution provisions contained in the unit
warrants. Additionally, we may call the unit warrants at $0.10 each when the
market price of our common stock exceeds 150% of the exercise price ($1.575) for
20 consecutive trading days. The price of our common stock currently meets this
criteria and we can call the unit warrants if we elect to do so. If all the unit
warrants are exercised, we will receive net proceeds of approximately $3.2
million. As of March 19, 2004, 467,448 shares of common stock had been issued as
a result of the exercise of the common stock purchase warrants generating
approximately $466,279 in net proceeds.

On August 29, 2003, we established a revolving line of credit with a
new lender. The credit agreement provides for a revolving line of credit of up
to $2.5 million for one year. The line is secured by substantially all of our
assets, consisting principally of our trade receivables and inventory.
Concurrently with the refinancing transaction, three funds affiliated with our
directors purchased an aggregate of 500,000 shares of our common stock at $0.60
per share. The proceeds of the transaction were used to pay off our previous
revolving credit facility and to provide working capital for use in executing
our business plans, including the expansion of our digital product line. The
credit agreement contains certain covenants with which we must comply. As of
December 31, 2003 we were in compliance with all such covenants. As of December
31, 2003 we had approximately $1.2 million in available unused credit on the
facility. In February 2004, our lender increased the credit facility by $1
million and the maturity date was extended to January 1, 2005.

In 2000, we privately placed convertible subordinated notes. The amount
due under the notes totals $3.15 million. The notes require interest only
payments at 8% per annum through December 31, 2004, at which time the principal
amount becomes due. At the time of issuance, the notes were convertible into
shares of our common stock at $3.25 per share. The notes contain provisions that
protect the purchasers of the notes against dilution should the Company issue
shares of common stock at a price less than the notes' conversion price then in
effect. These provisions provide for an adjustment in the notes' conversion
price and the number of shares into which the notes may be converted. On two
occasions, in March 2002 and August 2003 the Company issued shares of stock at a
price below the notes' conversion price then in effect. Accordingly, the
conversion price of the notes has been adjusted to $1.88, which was the
effective conversion price as of December 31, 2003. Upon maturity the notes must
be repaid or converted into shares of common stock. The decision regarding
repayment or conversion is at the option of the note holder unless the market
price of our common stock exceeds $6.50 per share for 30 consecutive trading
days. The notes presently are convertible into a total of 1,675,531 shares.
Although we cannot be certain if the notes will be converted or repaid, we
believe that there is a reasonable prospect that the notes may be converted. If
the notes must be repaid, we believe that we will be able to do so by using cash
generated from operations, the exercise of warrants, and our credit facility, as
well as existing cash funds.

Our cash balance as of December 31, 2003 was approximately $1.3
million. We believe these funds combined with cash generated from operations and
amounts available from our credit facility are sufficient to meet our current
working capital requirements for the next twelve months. If sales volumes
increase substantially, additional sources of working capital may be required to
fulfill the demand.

The following table sets forth the Company's future contractual
obligations as of December 31, 2003:

(IN THOUSANDS)

------------------------------------------------------------- ---------- ------------ ----------- ---------- -------
2004 2005 2006 2007 2008
------------------------------------------------------------- ---------- ---------- ----------- ---------- ---------

Future minimum lease commitments $ 435 $ 213 $ - $ - $ -
------------------------------------------------------------- ---------- ---------- ----------- ---------- ---------
Convertible subordinated notes $3,150 $ - $ - $ - $ -
------------------------------------------------------------- ---------- ---------- ----------- ---------- ---------
Revolving credit facility(1) $ - $1,272 $ - $ - $ -
------------------------------------------------------------- ---------- ---------- ----------- ---------- ---------
Purchase orders $2,460 $ - $ - $ - $ -
------------------------------------------------------------- ---------- ---------- ----------- ---------- ---------

(1) As discussed, in February 2004, our lender agreed to extend the
maturity date of our revolving line of credit until January 2005.

This table does not include short term obligations such as warranty
expense, nor future royalty payments, which cannot be estimated.

In March 2000, we leased a 54,000 square feet facility in West
Melbourne, Florida. The lease has a term of five years, which expires on June
30, 2005. Rental, maintenance and tax expenses were approximately $375,000,
$377,856 and $383,982 in 2001, 2002 and 2003, respectively. In May 2002, we
rented 3,800 square feet of office space in Lawrence, Kansas, to accommodate the
expansion of our digital engineering team. The original lease has a term of two
years. In November 2003 we extended the lease for an additional year. Rental,
maintenance and tax expenses for 2001, 2002 and 2003 were $0, $20,000 and
$33,351, respectively. We anticipate that current leases will be renewed at the
time of their expiration dates.

RECENT ACCOUNTING PRONOUNCEMENTS

In July 2002, the FASB issued Statement of Financial Accounting
Standards No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities," ("Statement 146"). Statement 146 addresses financial accounting and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force ("EITF") Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring") ("Issue 94-3"). The
principal difference between Statement 146 and Issue 94-3 relates to Statement
146's requirements for recognition of a liability for a cost associated with an
exit or disposal activity. Statement 146 requires that a liability for a cost
associated with an exit or disposal activity be recognized when the liability is
incurred. Under Issue 94-3, a liability for an exit cost as generally defined in
Issue 94-3 was recognized at the date of an entity's commitment to an exit plan.
A fundamental conclusion reached by the FASB in this Statement is that an
entity's commitment to a plan, by itself, does not create an obligation that
meets the definition of a liability. Therefore, this Statement eliminates the
definition and requirements for recognition of exit costs in Issue 94-3. This
Statement also establishes that fair value is the objective for initial
measurement of the liability. The provisions of this Statement are effective for
exit or disposal activities that are initiated after December 31, 2002. The
adoption of Statement 146 did not have a material impact on the Company's
consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45 ("FIN 45"),
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness to Others, an interpretation of FASB
Statements No. 5, 57, and 107 and a rescission of FASB Interpretation No. 34.
This Interpretation elaborates on the disclosures to be made by a guarantor in
its interim and annual financial statements about its obligations under
guarantees issued. The Interpretation also clarifies that a guarantor is
required to recognize, at inception of a guarantee, a liability for the fair
value of the obligation undertaken. The initial recognition and measurement
provisions of the Interpretation are applicable to guarantees issued or modified
after December 31, 2002. The adoption of FIN 45 did not have a material impact
on the Company's consolidated financial statements.

In December 2002, the FASB issued SFAS No. 148 "Accounting for
Stock-Based Compensation, Transition and Disclosure, an amendment of FASB
Statement No. 123." SFAS No. 148 provides alternative methods of transition for
an entity that voluntarily changes to the fair value based method of accounting
for stock-based employee compensation. It also amends the disclosure provisions
of SFAS No. 123 to require prominent disclosure about the effects on reported
net income of an entity's accounting policy decisions with respect to
stock-based employee compensation. Finally, this Statement amends APB Opinion
No. 28, "Interim Financial Reporting," to require disclosure about those effects
in the interim financial information. The amendments to SFAS No. 123 that
provide alternative methods of transition for an entity that voluntarily changes
to the fair value based method of accounting for stock-based employee
compensation are effective for financial statements for fiscal years ending
after December 15, 2002. The amendment to SFAS No. 123 relating to disclosure
and the amendment to APB Opinion 28 is effective for financial reports
containing condensed financial statements for interim periods beginning after
December 15, 2002. The adoption of SFAS No. 148 did not have a material impact
on the consolidated financial statements.

In January 2003, the FASB issued FASB Interpretation No. 46 (" FIN
46"), "Consolidation of Variable Interest Entities." FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, "Consolidated Financial
Statements," to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 applies immediately to
variable interest entities created after January 31, 2003, and to variable
interest entities in which an enterprise obtains an interest after that date. On
October 9, 2003 the FASB issued FASB Staff Position No. FIN 46-6, "Effective
Date of FASB Interpretation No. 46, Consolidation of Variable Interest
Entities," which defers the implementation date for public entities that hold an
interest in a variable interest entity or potential variable interest entity
from the first fiscal year or interim period beginning after June 15, 2003 to
the end of the first interim or annual period ending after December 15, 2003.
This deferral applies only if 1) the variable interest entity was created before
February 1, 2003 and 2) the public entity has not issued financial statements
reporting that variable interest entity in accordance with FIN 46, other than
disclosures required by paragraph 26 of FIN 46. In December 2003, the FASB
issued a revision to FIN 46 ("FIN 46R"), which clarifies and interprets certain
provisions of FIN 46, without changing the basic accounting model of FIN 46. The
adoption of FIN 46 and FIN 46R did not have a material impact on the Company's
consolidated financial position, liquidity, or results of operations.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies financial accounting and reporting for derivative instruments embedded
in other contracts and for hedging activities under SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities." It is effective for
contracts entered into or modified after September 30, 2003, except as stated
within the statement, and should be applied prospectively. SFAS No. 149 did not
have a material impact on the Company's consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity." SFAS
No. 150 establishes standards for how an issuer classifies and measurers in its
statement of financial position certain financial instruments with
characteristics of both liabilities and equity. In accordance with SFAS No. 150,
financial instruments that embody obligations for the issuer are required to be
classified as liabilities. SFAS No. 150 shall be effective for financial
instruments entered into or modified after May 31, 2003, and otherwise shall be
effective at the beginning of the first interim period beginning after June 15,
2003, except for mandatorily redeemable noncontrolling (minority) interests
which on October 29, 2003, the FASB decided to defer indefinitely. The adoption
of SFAS No. 150 did not have a material impact on the Company's consolidated
financial statements.

Quantitative and Qualitative Disclosures About Market Risks

We are subject to the risk of fluctuating interest rates in the
ordinary course of business for borrowings under our revolving credit facility.
The lender presently charges interest at the 2.00% over the prime rate.

Our primary exposure to market risk is to changes in interest rates. We
have both fixed and variable rate debt. We have $4.4 million of debt outstanding
as of December 31, 2003. Of our total debt, $3.15 million, or 71.2%, has been
borrowed at a fixed rate of 8.0% with a maturity of December 2004. We also have
$1.2 million of variable rate debt at December 31, 2003. As these debt
instruments mature, we refinance such debt at the existing market interest
rates, which may be more or less than interest rates on the maturing debt.
Changes in interest rates have different impacts on the fixed and variable rate
portions of our debt portfolio. A change in interest rates impacts the net
market value of our fixed rate debt, but has no impact on interest incurred or
cash flows on our fixed rate debt. Interest rate changes on variable debt
impacts the interest incurred and cash flows but does not impact the net market
value of the debt instrument. Based on our variable rate debt as of December 31,
2003, it is estimated that a 100 basis point increase in interest rates on our
revolving line of credit would result in an additional $12,000 in interest
incurred per year on its line of credit and a 100 basis point decline would
lower interest incurred by $12,000 per year.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

In response to the SEC's financial reporting release, FR-60, Cautionary
Advice Regarding Disclosure About Critical Accounting Policies, we have selected
for disclosure our revenue recognition process and our more subjective
accounting estimation processes. These processes affect our reported revenues
and current assets and are therefore critical in assessing the financial and
operation status of the Company. The processes for determining the allowance for
collection of trade receivables and the reserves for excess or obsolete
inventory involve certain assumptions that if incorrect could create an adverse
impact on the Company's operations and financial position.

REVENUE

Revenues are recognized when the earnings process is complete and
collection is reasonably assured. The earnings process is generally complete
when the product is shipped, or received by the customer, depending upon whether
the title to the goods, as well as the risks and benefits of ownership are
transferred to the customer at point of shipment or point of delivery. We
periodically review our revenue recognition procedures to assure that such
procedures are in accordance with accounting principles generally accepted in
the United States.

ALLOWANCE FOR COLLECTION LOSSES

The allowance for collection losses was approximately $61,000 on gross
trade receivables of $2.9 million as of December 31, 2003. This allowance is
used to state trade receivables at a net realizable value or the amount that we
estimate will be collected on our gross receivables as of December 31, 2003.
Because the amount that we will actually collect on the receivables outstanding
as of December 31, 2003 cannot be known with certainty as of this document's
effective date, we rely on prior experience. Our historical collection losses
have typically been infrequent with write-offs of trade receivables being less
than 1% of sales. We maintain a general allowance of approximately 1% to 5% of
the gross trade receivables balance in order to allow for future collection
losses that arise from customer accounts that do not indicate the inability to
pay but turn out to have such an inability. Currently, our allowance on trade
receivables is 2.1% of gross receivables. We believe that revenues and total
receivables will increase during 2004, and accordingly, we may experience an
increase in this allowance balance. We also maintain a specific allowance for
customer accounts that we know may not be collectible due to various reasons
such as bankruptcy and other customer liquidity issues. We analyze our trade
receivable portfolio based on the age of each customer's invoice. In this way,
we can identify those accounts that are more likely than not to have collection
problems. We may reserve a portion or all of the customer's balance.

INVENTORY RESERVE

The reserve for slow-moving, excess, or obsolete inventory was $2.8
million at December 31, 2003 as compared to $2.6 million in 2002. The reserve
for excess or obsolete inventory is used to state our inventories at the lower
of cost or market. Because the amount of inventory that we will actually recoup
through sales of our inventory as of December 31, 2003 can not be known with
certainty as of this document's effective date, we rely on past sales
experience, future sales forecasts, and our strategic business plans. Generally,
in analyzing our inventory levels, we classify inventory as having been used or
unused during the past year. For raw material inventory with no usage in the
past year, we reserve 85% of its cost which takes into account a 15% scrap value
while for finished goods inventory with no usage in the past year we reserve 80%
of its costs. For inventory with usage in the past year, we review the average
annual usage over the past three years, project that amount over the next five
years, and then reserve 25% of the excess amount (in which the excess amount
equals inventory on hand less a five year projected usage amount). We believe
that 25% represents the value of excess inventory we would not be able to
recover due to our new product introductions and other technological
advancements over the next five years.

BUSINESS

GENERAL

1 The government and public safety market, which includes fire, rescue,
law enforcement, and emergency medical personnel, as well as the military and
various agencies of federal, state, and local governments; and

2 The business and industrial market, which consists of enterprises
requiring fast, inexpensive communication among a discrete group of users.
Examples include hotels, construction companies, schools, airports, and taxies.

Generally, BK Radio-branded products serve the government and public
safety market. The business and industrial market is served by RELM and
Uniden-branded products.

Our principal executive offices are located at 7100 Technology Drive,
West Melbourne, Florida 32904 and the telephone number is (321) 984-1414. More
information about our products and us is also available through the Internet at
"http://www.relm.com." The information provided on our website is not
incorporated by reference into this prospectus.

EVENTS OF 2003

DIGITAL PRODUCTS

U. S. DEPARTMENT OF INTERIOR (DOI) CONTRACT

In July 2003, we were awarded contract participation to supply to the
DOI with digital LMR equipment that is compliant with APCO's Project 25
specifications.

REVOLVING CREDIT FACILITY

NASDAQ SMALL-CAP MARKET

INDUSTRY OVERVIEW

LMR communications consist of hand-held (portable) and mobile (vehicle
mounted) two-way radios commonly used by the public safety sector (e.g., police,
fire, and emergency medical personnel), businesses (e.g., hotels, airports,
farms, taxis, and construction firms), and government agencies within the United
States and abroad. LMR systems are constructed to meet an organization's
specific communication needs. The cost of a system varies widely, starting at
approximately $60,000 for a basic configuration. The cost of radio sets can
range from under $200 for a basic analog portable, to over $3,000 for a digital
unit, depending upon features. Typically, there are no recurring airtime usage
charges. Accordingly, LMR usage patterns are considerably different from those
for cellular and other wireless communications tools. LMR usage is characterized
by frequent calls of short duration. The majority of users make 20 to 50 calls
per day, with most calls lasting less than 30 seconds. The average useful life
is 8 years for a portable radio and 11 years for a mobile.

LMR systems are the oldest form of wireless dispatch communications
used in the U.S., having been first deployed by the Detroit Police Department in
1921. LMR is also the most widely used form of dispatch communications in the
U.S., with current users estimated to exceed 16.3 million. Initially, LMR was
used almost exclusively by law enforcement. At that time all radio
communications were transmitted in an analog format. Analog transmissions
typically consist of a voice or other signal modulated directly onto a
continuous radio carrier wave. Over time, advances in technology decreased the
cost of LMR products and increased its popularity and usage by businesses and
other agencies. To respond to the growing usage, additional spectrum was
allocated for LMR use.

In recent years LMR has been characterized by slow growth of
approximately 2% annually. This growth rate is a reflection of several factors:

o LMR is a mature industry, having been in existence for over 70
years;

o some LMR users are in mature industry segments that are
themselves experiencing slow growth rates; and

o most significantly, growth has been hampered by the lack of
available radio spectrum, which has prevented existing users
from expanding their systems and hindered efforts of many
potential new users from obtaining licenses for new systems.

As a result of the lack of available spectrum, the FCC has mandated
that new LMR equipment utilize technology that is more spectrum-efficient. This
effectively requires LMR users to migrate to digital systems. Responding to the
mandate, APCO, in concert with several LMR manufacturers (including RELM),
recommended an industry standard for digital LMR devices that would meet the FCC
requirements and provide solutions to several problems experienced primarily by
public safety users. The standard is called Project 25. The primary objectives
of Project 25 are to i) allow effective and reliable communication among users
of compliant equipment, regardless of its manufacturer, ii) maximize radio
spectrum efficiency, and iii) promote competition among LMR providers through an
open system architecture.

Although the FCC does not require public safety agencies or APCO to
purchase Project 25-compliant equipment or otherwise adopt the standard,
compliance with the standard is increasingly becoming the key consideration for
government and public safety purchasers. Accordingly, we anticipate that the
demand for Project 25-compliant equipment will fuel significant LMR market
growth as users upgrade equipment to achieve interoperability and comply with
the FCC mandate. A privately commissioned study estimates the addressable market
for APCO Project 25-compliant products will total approximately $38 billion over
the next five years. Roughly half of that estimate pertains to infrastructure
equipment, which is defined as towers, antennas, controllers, and combiners.

By some estimates, the LMR industry is as large as $5.7 billion in
annual sales. Presently, one manufacturer dominates the market. However, the
open architecture of the Project 25 standard effectively eliminates the ability
of one or more major companies to lockout competitors. Formerly, because of
proprietary characteristics incorporated in many conventional analog LMR
systems, a customer was effectively precluded from purchasing additional LMR
products from a company other than the initial provider of the system.
Additionally, the system infrastructure technology was prohibitive for smaller
communications companies to develop. Project 25 provides an environment under
which users will have a wider selection of LMR suppliers, including smaller
companies such as RELM.

DESCRIPTION OF PRODUCTS

We design, manufacture, and market wireless communications equipment
consisting of two-way radios, repeaters, base stations, and related components
and subsystems. Two-way radios can be units that are hand-held (portable) or
installed in vehicles (mobile). Repeaters expand the range of two-way radios,
enabling them to operate over a wider area. Base station components and
subsystems are installed at radio transmitter sites to improve performance by
reducing or eliminating signal interference and to enable the use of one antenna
for both transmission and reception.

We employ both analog and digital technologies in our products. Our
digital products are compliant with Project 25 specifications.

We sell our products under the "BK RADIO," "UNIDEN," and "RELM" brand
names. Generally, BK Radio-branded products serve the government and public
safety market, while RELM and Uniden-branded products serve the business and
industrial market.

BK Radio (formerly "Bendix King") branded products consist of
higher-specification land-mobile radios whose primary market focus is
professional radio users in the government and public safety sectors. The BK
Radio products have more extensive features and capabilities than the products
offered in the RELM and Uniden product lines. Our Project 25-compliant digital
products are marketed under the BK Radio brand.

RELM and Uniden branded products provide basic, inexpensive, yet
feature rich and reliable, two-way communications for business and industrial
users, such as hotels, construction companies, schools, taxicab and limousine
companies, and airports. Typically these users are not radio professionals, and
require easy, fast, inexpensive communication among a defined group of users.

DESCRIPTION OF MARKETS

GOVERNMENT AND PUBLIC SAFETY MARKET

The government and public safety market includes the military, fire,
rescue, law enforcement, emergency medical personnel, as well as various
agencies of federal, state, and local government. In most instances, BK Radio
branded products serve this market and are sold either directly to end-users, or
through two-way communications dealers. Government and public safety revenues
represented approximately 82% of total sales for 2003, 78% of total sales for
2002 and 79% of total sales for 2001.

Most government and public safety users currently use products that
employ analog technology. However, users in the United States and certain other
countries are migrating at an increasing rate to digital products that comply
with the APCO Project 25 standard. The evolution of the standard and compliant
digital products is explained in the INDUSTRY OVERVIEW section starting on page
2 of this report.

BUSINESS AND INDUSTRIAL MARKET

This market includes businesses and enterprises of all sizes that
require fast, push-to-talk communication among a defined group of users such as
hotels, construction companies, schools, taxicab and limousine companies, and
airports. We offer products to this market under the RELM and Uniden brand
names. Most of our sales in this market are to dealers and distributors who then
resell the products to end-users. Our sales to this market represented
approximately 18% of total sales for 2003, 22% of total sales for 2002 and 21%
of total sales for 2001.

ENGINEERING, RESEARCH AND DEVELOPMENT

Our engineering and development activities are conducted in West
Melbourne, Florida and Lawrence, Kansas by a team of 13 employees. Their primary
development focus is the execution of our plan to design Project 25-compliant
digital products, which started in 2001. During 2003, our first Project
25-compliant digital product, named the DPH, received FCC approval and was
introduced to the market. In July 2003, the DPH was added to the contract to
supply the DOI with digital two-way communications equipment. The DPH is the
first in a series of digital products that we plan to introduce in 2004 through
2005 into both of our primary markets. A segment of our engineering team is
responsible for product specifications based on customer requirements and
supervising quality assurance activities. They also have primary responsibility
for applied engineering, production engineering and the specification compliance
of contract manufacturers.

For 2003, 2002, and 2001, RELM's engineering and development
expenditures were approximately $1.5 million, $1.9 million and $1.4 million,
respectively. The effective use of internal resources and concentration on key
initiatives, such as the APCO Project 25 digital program, has enabled us to
contain and, in some instances, even reduce engineering expenses while
delivering new products relatively quickly.

INTELLECTUAL PROPERTY
Our United States patents covering various land-mobile radio products
have expired. We have no plans to renew them. We hold several trademarks related
to the "RELM" name and our product names. We also rely on trade secret laws and
employee and third party non-disclosure agreements to protect our intellectual
property rights.

MANUFACTURING AND RAW MATERIALS

Our manufacturing strategy is to utilize the highest quality and most
cost effective resources available for every aspect of our manufacturing.
Consistent with that strategy, we have successfully implemented several outside
contract manufacturing arrangements. These arrangements, some of which are with
offshore concerns, have been instrumental in decreasing our product costs
significantly, allowing us to improve our competitive position and gross
margins.

Contract manufacturers produce both completed products and LMR
subassemblies on our behalf. Generally, the contract manufacturers purchase raw
materials from approved sources and complete subassemblies or finished products
in accordance with our specifications. An Original Equipment Manufacturer (OEM)
manufacturing agreement governs the business relationship with each contract
manufacturer. These agreements typically have a five-year term and may be
renewed upon agreement by both parties. The scope of the contracts may also be
expanded to include new products in the future.

In connection with the acquisition in 2000 of the Uniden LMR product
line, we entered into an OEM manufacturing agreement with Uniden America
Corporation under which Uniden manufactures product with the Uniden brand name.
The initial term of the contract was for 18 months. Although the contract
expired in September 2001, both parties continue to operate under its original
terms.

We plan to continue to utilize contract manufacturing where it furthers
our business objectives. This strategy allows us to focus on our core
technological competencies of product design and development, and to reduce the
substantial capital investment required to manufacture our products. We also
believe that our use of experienced, high-volume manufacturers will provide
greater manufacturing specialization and expertise, higher levels of flexibility
and responsiveness, and faster delivery of product. To ensure that products
manufactured by others meet our standards, our West Melbourne production and
engineering team works closely with its ISO9002-qualified contract manufacturers
in all key aspects of the production process. We establish product
specifications, select the components and, in some cases, the suppliers. We
retain all document control. We also work with our contract manufacturers to
improve process control and product design, and to conduct periodic on-site
inspections.

We rely upon a limited number of both domestic and foreign suppliers
for several key products and components. We place purchase orders from time to
time with these suppliers and have no guaranteed supply arrangements. In
addition, we obtain certain components from a single source. The amount of these
components is not material relative to total component and raw material
purchases. During 2003, 2002, and 2001, our operations have not been impaired
due to delays from single source suppliers. However, the absence of a single
source component could delay the manufacture of finished products. We manage the
risk of such delays by securing second sources and redesigning products in
response to component shortages or obsolescence. We strive to maintain strong
relations with all our suppliers. We anticipate that the current relationships,
or others that are comparable, will be available to us in the future.

SEASONAL IMPACT

Demand for our "BK Radio" LMR products is typically the greatest during
the summer season because of the increased forest fire activity during that time
of year.

SIGNIFICANT CUSTOMERS

Sales to the United States Government represented approximately 50%,
39% and 44% of our total sales for the years ended December 31, 2003 and 2002,
and 2001, respectively. These sales were primarily to the United States Forest
Service (USFS), the DOI and the Communications Electronics Command of the United
States Army (CECOM).

Sales to the USFS represented approximately 27%, 22%, and 34% of total
sales for the years ended December 31, 2003, 2002 and 2001, respectively. Our
new digital portable radio, the DPH, was added to the DOI contract in July 2003.
For the year ended December 31, 2003 sales to the DOI represented approximately
12% of total sales. For the years ended December 31, 2003 and 2002 we had no
sales to CECOM because our contract expired in 2001. Sales to CECOM represented
approximately 10% of total sales for the year ended December 31, 2001.

In December 2002, we were awarded a new contract with the USFS. It
includes the portable radios and repeaters that were on the previous contract.
Additionally, it includes our GMH mobile radio that was not on the previous
contract. The new contract is for one year with two additional option years.

BACKLOG

Our order backlog was approximately $2.8 million, $1.7 million, and
$1.6 as of December 31, 2003, 2002, and 2001, respectively.

COMPETITION

The worldwide land mobile radio markets are estimated to be $5.7
billion annually with annual growth of approximately 2%. We compete with many
domestic and foreign companies in these markets. One competitor holds a share of
the market estimated to exceed 70%. We compete in these markets by capitalizing
on our advantages and strengths, which include price, quality, speed, and
customer responsiveness.

EMPLOYEES

We presently have 67 full-time employees, most of whom are located at
our West Melbourne, Florida facility; 34 of these employees are engaged in
direct manufacturing or manufacturing support, 13 in engineering, 12 in sales
and marketing, and 8 in general and administrative activities. Our employees are
not represented by any collective bargaining agreements, nor has there ever been
a labor-related work stoppage. We believe our relations with our employees are
good.

INFORMATION RELATING TO DOMESTIC AND EXPORT SALES

The following table summarizes our sales of wireless communications
equipment by location of our customers:

2003 2002 2001
--------------------------------------------
(in Millions)

United States $18.5 $14.9 $21.8
Other International 1.2 1.0 1.0
--------------------------------------------
Total $19.7 $15.9 $22.8
============================================

PROPERTIES

OWNED

We do not currently own any real estate.

LEASED

The majority of our operations are conducted in approximately 54,000
square feet of leased industrial space at 7100 Technology Drive in West
Melbourne, Florida. The original lease term is five years, which expires on June
30, 2005. Rental, maintenance and tax expenses were approximately $375,000,
$378,000 and $384,000 in 2001, 2002 and 2003, respectively. We also lease 3,800
square feet of office space in Lawrence, Kansas, to accommodate a segment of our
engineering team. This lease has a term of two years. Rental, maintenance and
tax expenses for 2001, 2002 and 2003 were approximately $-0-, $20,000 and
$33,000, respectively.

Legal Proceedings

liquidator's claim. On March 1, 2004, we reached a settlement agreement. Under
the terms of the settlement, we will pay to the plaintiff cash totaling $120,000
and issue 6,452 shares of restricted RELM common stock valued at the closing
price on March 1, 2004. Consequently, we recognized a one-time charge of
$140,000 in the fourth quarter 2003. The settlement is subject to the execution
by both parties of a written agreement and release.

In February 12, 1999, we initiated collection and legal proceedings in
Sao Paulo, Brazil, against its Brazilian dealer, Chatral, for failure to pay for
product shipments totaling $1.4 million which has been fully reserved in a prior
year. In April 2001, the Brazilian court ordered us to post security with the
court totaling approximately $300,000 in the form of cash or a bond in order for
the case to proceed. We elected not to post security. Consequently, the case was
involuntarily dismissed. On December 8, 1999, Chatral filed a counter claim
against us alleging damages totaling $8 million as a result of our
discontinuation of shipments to Chatral. On September 11, 2002 we agreed to a
joint stipulation of dismissal under which all claims between the parties were
released.

Heath & Company filed a suit against RELM Wireless Corporation and RELM
Communications, Inc. in the United States District Court for the District of
Massachusetts in early 2001 year for breach of contract, misrepresentation and
unfair trade practices. Pursuant to a Memorandum and Order dated April 24, 2001,
most of Heath's claims were dismissed. The court ruled as a matter of law that a
fact finder must determine whether RELM Communications withheld information it
knew to be essential to the Plaintiff and whether it did so in a bad faith
attempt to withdraw from a brokerage agreement. On March 21, 2002, the parties
settled the matter for payment to Heath of $33,000.

On December 20, 2000, a products liability lawsuit was filed in Los
Angeles Superior Court in Los Angeles, California. Although the Company was not
named in the suit, one of the defendants had purchased all or substantially all
of the assets of a RELM affiliate. As part of the asset sale, the asset purchase
agreement contained indemnification provisions, which could result in liability
for us. On October 23, 2001, the purchaser of the assets of our former affiliate
served us with a claim for indemnification under a provision of the asset
purchase agreement. In June 2002, we were released from this matter.

In June 1997, substantially all of the assets of a RELM
specialty-manufacturing subsidiary were sold. The asset purchase agreement
contains indemnification provisions, which could result in liability for both
parties. Presently, one indemnification claim is pending against us. On November
19, 2001, a products liability lawsuit was filed in the 353rd Judicial District
Court of Travis County, Texas. On August 26, 2002, a products liability lawsuit
was filed in the Probate Court of Galveston County, Texas. RELM Wireless
Corporation, RELM Communications, Incorporated, and the purchaser of the assets
of our former specialty-manufacturing subsidiary are named defendants in these
lawsuits. We have insurance coverage for these matters. The initial case was
settled in February 2004 by the insurance companies involved, including ours. We
did not incur any costs or liabilities related to the settlement. Counsel for
our insurer is continuing to vigorously defend the remaining claim. Counsel
believes we have meritorious defenses and the likelihood of an unfavorable
outcome is remote.

During 2002, the purchaser of the assets of our former
specialty-manufacturing subsidiary ceased making payments in accordance with a
note receivable. The initial amount of the note was approximately $355,000.
Presently, the amount due under the note is approximately $175,000 plus accrued
interest. This note is derived from the 1997 agreement for the sale of the
assets of our specialty-manufacturing subsidiary. Since its inception, the terms
of the obligation have been restructured several times to accommodate the
purchaser. The last payment was received in March 2002. Attempts to contact the
purchaser and collect the past-due installment payments have been unsuccessful.
In February 2003, we started legal proceedings to recover the remaining amount
due under the note plus accrued interest. With guidance from counsel, we believe
that we will prevail in these proceedings. However, we have been unable to
ascertain the financial position of the purchaser or their ability to pay the
debt. Accordingly, we have maintained the valuation reserve for the entire
principal amount ($175,000) of the note that was established in 2002.

In April 2002, we learned that the purchaser of the assets of our
former paper-manufacturing subsidiary had ceased operations. The purchaser owes
us $900,000 plus accrued interest under the terms of two secured promissory
notes, and has defaulted on its obligations to make principal and interest
payments. The Chief Executive Officer of the purchaser personally guaranteed the
debt. Our security interest is subordinated to the security interest granted to
the purchaser's senior lender. In connection with the sale of the subsidiary in
1997, we took back a secured promissory note from the purchaser in the initial

aggregate principal amount of $2.4 million. In December 2000, the terms of the
original promissory note were modified and we received a principal payment of
$700,000 plus accrued interest of approximately $166,000. After this payment,
the remaining principal amount due on the original note was $900,000. Also, as
part of the modification agreement, the original note was replaced by two
secured promissory notes, one in the principal amount of $600,000 and the other
in the principal amount of $300,000. The $600,000 note was payable in ten annual
installments starting on April 2, 2002. The $300,000 note was payable in five
annual installments starting on January 1, 2003. Interest on both notes accrued
at 2.75% over the prime rate and was payable, in the case of the $600,000 note,
in annual installments, and, in the case of the $300,000 note, in semi-annual
installments. The $600,000 note was subject to a standby creditor's agreement
under which principal and interest payments on the note were contingent upon the
purchaser achieving a certain debt service coverage ratio and the absence of any
uncured defaults on other loans or agreements of the purchaser. As security for
both notes, the purchaser has granted to us a lien and security interest in
certain collateral. Our security interest, however, is subordinated to the
security interest granted to the purchaser's senior lender. In addition, the
Company was subject to a standstill agreement with the senior lender. A
principal of the purchaser guaranteed the prompt and complete payment of both
notes when due. Both notes were subject to forbearance fee payment agreements
with both the purchaser and the guarantor under which additional amounts may be
payable to us if there is a merger, sale or change of control of the purchaser
and if the notes are not paid in full by certain dates. In December 2002, the
purchaser's senior lender notified us that they had sold the purchaser's assets
for $200,000. This amount was not sufficient to provide any recovery of amounts
owed to us under the notes. In February 2003, with the assistance of counsel, we
initiated legal proceedings against the guarantor. In October, 2003 we were
awarded a judgement against the guarantor in the amount of $1.0 million. We have
not been able to ascertain the financial position of the guarantor or evaluate
his ability to pay the debt. Accordingly, we have maintained the valuation
reserve for the entire principal amount ($900,000) of the two promissory notes
that was established in the first quarter 2002.

MANAGEMENT

EXECUTIVE OFFICERS, DIRECTORS AND OTHER KEY EMPLOYEES

The following table presents information with respect to our executive
officers, directors and other key employees.

EXECUTIVE OFFICERS AND DIRECTORS:

NAME AGE POSITION
------------------------------------ ------ ------------------------------------------------

George N. Benjamin, III (3) 66 Chairman of the Board
David P. Storey 51 President, Chief Executive Officer, and Director
William P. Kelly 48 Executive Vice President and Chief Financial Officer
Ralph R. Whitney, Jr. (1)(3) 68 Director
James C. Gale (1)(2) 54 Director
Randolph K. Piechocki (1)(2)(3) 51 Director
Donald F.U. Goebert (2) 66 Director

(1) Member of the audit committee.
(2) Member of the Compensation Committee.
(3) Member of the nominating committee.

OTHER KEY EMPLOYEES:

NAME AGE POSITION
------------------------------------ ------ ------------------------------------------------
Harold B. Cook 58 Vice President of Operations
James W. Spence 49 Executive Vice President of Engineering
Theresa Zagaruyka 48 Vice President of Engineering
Christopher Ramsden 48 Vice President of Federal Sales and Marketing

The business experience of our executive officers and directors as well
as our other key employees is set forth below:

GEORGE N. BENJAMIN, III has been our Chairman of the Board since May
2003 and a director since January 1996. He has served as a director of
Stonebridge Financial Corporation since January 2000 and a director of Aubeta
Network Corporation, a facility-based wide area network company, since December
2002. From August 1999 to October 2001, he was the president and chief executive
officer of Keystone Networks, Inc., an optical network developer. He was
president of BICC Brand Rex from June 1993 to August 1999, and was president and
chief executive officer of BICC Cables Corp., N.A., a manufacturer of electrical
wires and cable, from August 1998 through June 1999. He was a group
vice-president of the Marmon Group, Incorporated, a management consulting
organization, from August 1988 until October 1995. He was president of Tie
Communications, Incorporated, a provider of business communications and
information distribution products from April 1992 to October 1995. He has been a
consultant and partner in Trig Systems, LLC, a management and consulting
company, since July 1987..

DAVID P. STOREY has been our President and Chief Executive Officer
since July, 2000, after serving as our Executive Vice President and Chief
Operating Officer from June 1998 to July 2000. From January 1994 to June 1998,
he was executive vice president of manufacturing for Arris Corporation (formerly
Antec Corporation). At Arris Mr. Storey was responsible for six manufacturing
facilities which consisted of 2 million sq. ft. of manufacturing and
distribution services. In the years preceding Arris, Mr. Storey was an officer
of Keptel, Inc, which was acquired by Arris. He has also held senior management
positions with EG&G, GTE, Exxon Office Systems, American Hospital Supply and
Gould, Inc.

WILLIAM P. KELLY has been our Executive Vice President and Chief
Financial Officer since July 1997, and Secretary since June 2000. From October
1995 to June 1997, he was Vice President and Chief Financial Officer of our
subsidiary, Relm Communications, Inc. From January 1993 to October 1995, he was
the Financial Director of Harris Corp. Semiconductor Sector.

RALPH R. WHITNEY JR. has been a director since January 1992. From
January 1971 to January 2002, Mr. Whitney was the president and chief executive
officer of Hammond Kennedy Whitney & Co., Inc., an investment banking company.
From January 2001 to June 2002, Mr. Whitney served as a director of IFR Systems,
Inc., a manufacturer of test equipment for the military. Since 1971, he has been
a director of Baldwin Technology Co., Inc., a manufacturer of printing press
equipment, First Technology, PLC, a manufacturer and supplier of electronic
optical sensors, Reinhold Industries, Inc., a manufacturer of composite
components in the aerospace, defense and commercial lighting industries, and
DURA Automotive Systems, Inc., a manufacturer of automobile windows, seat and
door assemblies.

JAMES C. GALE has been a director since October 1993. Mr. Gale
presently serves as the chairman of the board of Valera Pharmaceuticals,
Incorporated and Alpex Pharma SA. He also serves as a director of Avantium
Technologies BV and Cedarburg Pharmaceuticals, Incorporated. Since September
1998, Mr. Gale has been a managing director of Sanders Morris Harris, an
investment banking company. From 1991 to 1998, Mr. Gale was a managing director
of Gruntal & Co., L.L.C., an investment banking and management company.

RANDOLPH K. PIECHOCKI has been a director since October 2002. He has
served as president of Palco Telecom Service, Inc., a provider of reverse
logistic and warranty fulfillment services, from August 1999 to the present. He
has held senior level management and advisory positions at TxPort, a
manufacturer of carrier class WAN access devices, from October 1997 to August
1999, Voice Control Systems from July 1997 to October 1997 and American Mobile
Satellite, a wireless service provider, from April 1996 to September 1996.

DONALD F. U. GOEBERT has served as Chairman of the Board (and a
director of our predecessor) from March 1968 until May 2003 and has been a
director to the present. He presently serves as a director of Stonebridge
Financial Corporation. He was the President of our predecessor from March 1968
to October 1988, and our President and Chief Executive Officer from April 1993
to December 1997. He has been president of Chester County Fund, Inc., a
commercial real estate company, since 1968. Mr. Goebert is a director of
Investors Insurance Group, Inc., a commercial insurance company.

Our other key employees and their biographies are as follows:

HAROLD B. COOK has been our Vice President of Operations since July
2000. Mr. Cook joined us in April 1997 as Director of Manufacturing. Prior to
joining us, Mr. Cook held the position of Director of Manufacturing Operations
at Computer Products Incorporated, Fujitsu America Inc., and Ampro Corporation.
Mr. Cook also held operations management positions at Storage Technology
Corporation and Harris Corporation.

JAMES W. SPENCE has been our Executive Vice President of Engineering
since January 2004. He served as our Director of Engineering from April 1999 to
December 2003. Previously he was Engineering Manager with Dolphin Technology,
L.C., performing system, embedded software, DSP, and hardware design to create
trunked and secure mode radio products. From August 1983 to October 1994 he held
various positions with Bendix/King, lastly as Software and Digital Engineering
Group Leader. He was an original designer of the BK Radio product line,
beginning with the LPH portable radio. In the years prior to Bendix/King, he
held various engineering design positions with IBM. Mr. Spence holds Bachelor's
and Master's degrees in Electrical Engineering from the University of Kansas.

THERESA M. ZAGARUYKA has been our Vice President of Engineering since
January 2004. She served as RELM's Director of Engineering from April 1999 to
December 2003. Prior to joining RELM, she was Business Manager of Dolphin
Technology, L.C., a consulting firm specializing in telecommunications
applications. From January 1988 to February 1994 she was involved in the
development of the software platform for Bendix/King radio products. Ms.
Zagaruyka holds a Bachelor of Science degree in Electrical Engineering from the
University of Kansas.

CHRISTOPHER RAMSDEN has been our Vice President of Federal Sales and
Marketing since January 2003. Prior to joining us, Mr. Ramsden served as the
Director of Sales & Marketing for Kenwood Communications from February 2000 to
January 2002. He also served in various senior-level sales and marketing
positions with Bell South from August 1990 to February 2000. Mr. Ramsden has
also held sales and marketing positions at Motorola and U.S. West.

BOARD OF DIRECTORS AND INDEPENDENCE

The board of directors is committed to good business practices,
transparency in financial reporting and the highest level of corporate
governance. For purposes of determining the independence of each member of our
board of directors and the committees of the board of directors, we have used
the definition of independence contained in Nasdaq Marketplace Rule 4200(a)(15).
Under applicable SEC rules and regulations, we are permitted to use this
definition of independence even though our shares of common stock are not listed
on Nasdaq or a national securities exchange.

The board of directors is currently fixed at six members. Our board of
directors reviews the relationships that each director has with us and other
parties. Only those directors who do not have any of the categorical
relationships that preclude them from being independent within the meaning of
Nasdaq Marketplace Rule 4200(a)(15) and who the board of directors affirmatively
determines have no relationships that would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director, are
considered to be independent directors. The board of directors has reviewed a
number of factors to evaluate the independence of each of its members. These
factors include its members' current and historic relationships with us and our
subsidiaries; their relationships with management and other directors; the
relationships their current and former employers have with us and our
subsidiaries; and the relationships between us and other companies on which our
board members are directors or executive officers. After evaluating these
factors, the board of directors has determined that four of its six members are
"independent" as defined by Nasdaq Marketplace Rule 4200(a)(15), all applicable
rules and regulations of the SEC, and for purposes of Rule 162(m) of the
Internal Revenue Code of 1986, as amended. These four directors are: George N.
Benjamin, III, Ralph R. Whitney Jr., Donald F.U. Goebert and Randolph K.
Piechocki.

Independent members of our board of directors meet in executive session
without management present, and are scheduled to do so at least two times per
year. The board of directors has designated Mr. Benjamin as the presiding
director for these meetings. Each director holds his office until the next
annual meeting of stockholders unless he resigns or is removed or disqualified.
Officers are elected by the board of directors and any number of offices may be
held by the same person.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The board of directors held seven (7) meetings during 2003, and each of
the directors attended at least seventy-five percent (75%) of the total number
of meetings of the board of directors and committees (if any) on which he
served. The board of directors has a standing audit committee, compensation
committee and nominating committee.

AUDIT COMMITTEE. The members of the audit committee are Ralph R.
Whitney Jr., who serves as the chairperson, and James C. Gale and Randolph K.
Piechocki. The board of directors has adopted an audit committee charter, which
is attached as Appendix A to this proxy statement. The audit committee charter
requires that the audit committee consist of three or more members of the board
of directors, each of whom are independent within the meaning of Nasdaq
Marketplace Rule 4200(a)(15). Under exceptional and limited circumstances,
however, one member of the audit committee who is not independent may serve as a
member so long as the board determines that it is in the best interests of us
and our stockholders for such individual to do so. Each of the members of the
audit committee are independent within the meaning of Nasdaq Marketplace Rule
4200(a)(15), except for Mr. Gale who the board has determined qualifies for the
foregoing independence exception. The board of directors has determined that Mr.
Whitney is an "audit committee financial expert" as defined in Item 401(h) of
Regulation S-K.

The audit committee has oversight responsibility for quality and
integrity of our consolidated financial statements. The committee meets
privately with the independent auditors, has the sole authority to retain and

dismiss the independent auditors and reviews their performance and independence
from management. The independent auditors have unrestricted access and report
directly to the committee. The audit committee met seven (7) times during fiscal
year 2003. The primary functions of the audit committee are to oversee: (i) the
audit of our consolidated financial statements provided to the SEC and our
security holders; (ii) our internal financial and accounting processes; and
(iii) the independent audit process. Additionally, the audit committee has
responsibilities and authority necessary to comply with Rule 10A-3(b) (2), (3),
(4), and (5) of the Exchange Act, concerning the responsibilities relating to:
(a) registered public accounting, (b) complaints relating to accounting,
internal accounting controls or auditing matters, (c) authority to engage
advisors and (d) funding. These and other aspects of the audit committee's
authority are more particularly described in the audit committee charter amended
and adopted by the board of directors, which is attached as Appendix A to this
proxy statement.

In 2003, the audit committee adopted a formal policy concerning
approval of audit and non-audit services to be provided to us by our independent
auditor, BDO Seidman LLP. The policy requires that all services to be provided
by BDO Seidman LLP, including audit services and permitted audit-related and
non-audit services, must be pre-approved by the audit committee. The audit
committee approved all audit and non-audit services provided by BDO Seidman LLP
during 2003.

COMPENSATION COMMITTEE. James C. Gale, Donald F.U. Goebert and Randolph
K. Piechocki are members of the compensation committee, and Mr. Gale serves as
the chairperson. All members of the compensation committee are independent as
defined by Nasdaq Marketplace Rule 4200(a)(15), except for Mr. Gale. The
compensation committee is responsible for reviewing and approving all
compensation arrangements for our executive officers, and is also responsible
for administering the stock option plans. During 2003, the compensation
committee met two (2) times and otherwise acted by unanimous written consent.

NOMINATING COMMITTEE. In February 2004, the board established the
nominating committee. The members of the nominating committee are George N.
Benjamin, III, Ralph R. Whitney Jr., and Randolph K. Piechocki, and Mr.
Piechocki serves a chairperson. All members of the nominating committee are
independent as defined by Nasdaq Marketplace Rule 4200(a)(15). The nominating
committee does not have a charter.

The nominating committee is responsible for evaluating and recommending
individuals for election or reelection to the board of directors and its
committees. The nominating committee will consider director candidates that are
recommended by stockholders. The nominating committee strives to complement and
supplement skills within the existing board and strengthen any identified
insufficiencies. In selecting the candidates, there is no firm requirement of
minimum qualifications or skills that a candidate must possess. The nominating
committee evaluates director candidates based on a number of qualifications,
including their independence, judgment, character, financial literacy, expertise
in the industry, experience developing and analyzing business strategies, risk
management skills, and, for incumbent directors, his or her past performance.
Further criteria include a candidate's personal and professional ethics,
integrity and values, as well as the willingness to devote sufficient time to
attend meetings and participate effectively on the board. The same identifying
and evaluating procedures apply to all candidates for director nomination,
including candidates submitted by stockholders.

COMPENSATION OF DIRECTORS

During 2003, we paid to each of our non-employee directors meeting fees
of $1,000 for attendance in person and $500 for attendance by telephone at each
board meeting. We also paid to each of our non-employee directors who served on
any committee of the board meeting fees of $250 for attendance at each meeting
of any such committee which was held in conjunction with a meeting of the board
and meeting fees of $500 for attendance at each meeting of any such committee
which was not held in conjunction with a board meeting. Each of our non-employee
directors who served as chairperson of any committee of the board of directors
also received a $1,000 fee. In addition, our directors receive a yearly retainer
fee of $8,000. During 2003, we paid $25,000 to Mr. Benjamin for his services as
Chairman of the Board. Pursuant to the terms of the 1996 Non-Employee Director
Stock Option Plan, each non-employee director is entitled to receive stock
options for service as a director. Accordingly, a grant of a stock option for
the purchase of 5,000 shares is made to each non-employee director on the date
of each annual meeting of shareholders at which that person is elected or
re-elected as a director (or if the annual meeting has not been held by June 30
of that year the grant is made as of June 30th of that year to each of the
persons qualifying and who has been a non-employee director for at least three

months). Options are granted at an exercise price equal to the fair market value
of our common stock on the date of grant, become fully exercisable eleven months
after the date of grant, or earlier upon a change of control as defined in the
Plan, and expire five years from the date of grant or earlier in the event
service as a director ceases. On May 6, 2003, a grant of stock options for the
purchase of 5,000 shares was made to each of our non-employee directors at an
exercise price of $0.26 per share.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No member of the compensation committee was at any time during the past
fiscal year an officer or employee of us, was formerly an officer of us or any
of our subsidiaries, or had any employment relationship with us.

During the last fiscal year, none of our executive officers served as:

o a member of the compensation committee (or other committee of
the board of directors performing equivalent functions or, in
the absence of any such committee, the entire board of
directors) of another entity, one of whose executive officers
served on our compensation committee;

o a director of another entity one of whose executive officers
served on our compensation committee; and

LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS

Our articles of incorporation and bylaws limit the liability of
directors to the maximum extent permitted by Nevada law. The limitation on our
directors' liability may not apply to liabilities arising under the federal
securities laws. Our articles of incorporation and bylaws provide that we shall
indemnify our directors and executive officers and may indemnify our other
officers and employees and agents and other agents to the fullest extent
permitted by law. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors and executive officers
pursuant to our certificate of incorporation and bylaws, we have been informed
that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.

At present, there is no pending litigation or proceeding involving any
of our directors, officers, employees or agents where indemnification will be
required or permitted. We are not aware of any threatened litigation or
proceeding that might result in a claim for such indemnification.

CODE OF ETHICS

The board of directors has adopted a Code of Business Conduct and
Ethics that applies to all of our employees, officers and directors, and a Code
of Ethics for the chief executive officer and senior financial officer. We will
provide to any person, without charge, a copy of these codes of ethics on the
written request of any such person addressed to the Secretary at RELM at 7100
Technology Drive, West Melbourne, Florida 32904.

EXECUTIVE COMPENSATION

The following table sets forth the annual and long term compensation
for each of the last three years ended December 31, 2003, 2002 and 2001 earned
by or paid to Messrs. Storey and Kelly, who served as our President and Chief
Executive Officer and Executive Vice President, Chief Financial Officer and
Secretary, respectively, during 2003 (each, a "Named Officer"). No other
executive officer was paid salary and bonus compensation by us which exceeded
$100,000 during 2003, 2002 or 2001.

SUMMARY COMPENSATION TABLE

LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
-----------------------------------------------------------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
COMPENSATION COMPENSATION COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) OPTIONS (#) ($)(1)
-------------------------------------------------------------------------------------------------------------------

David P. Storey................ 2003 225,014 56,000 - - 1,552
President and Chief Executive 2002 225,014 - - - 5,875
Officer 2001 203,486 - - 245,000 7,105

William P. Kelly............... 2003 135,013 34,000 - - 984
Executive Vice 2002 135,013 - - - 4,731
Chief Financial Officer and 2001 129,187 - - 77,500 4,390
Secretary

(1) The amounts shown in the column titled "All Other Compensation" for the
year 2001 and 2002 include both employer contributions to our 401(k) plan
and disability insurance premiums paid by us for the benefit of the Named
Officers.

The Named Officers did not receive any other annual compensation during
the three-year period not categorized as salary or bonus except for perquisites
and other personal benefits which in the aggregate in any year did not exceed
the lesser of $50,000 or 10% of the total annual salary and bonus reported for
such Named Officer.

STOCK OPTION GRANTS

During the years ended December 31, 2003 and 2002, we made no grants of
stock options to the Named Officers.

We do not currently have (and have not previously had) any plan
pursuant to which any stock appreciation rights may be granted.

STOCK OPTION HOLDINGS

The following table provides summary information regarding stock
options held by each of our Named Officers as of December 31, 2003. No Named
Officer exercised stock options during 2003.

NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
DEC. 31, 2003 (#) DEC. 31, 2003 ($)(1)
-----------------------------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------------------------------------------------------------------------------------------------------

David P. Storey................ 600,000 - 144,438 -
William P. Kelly............... 297,500 10,000 103,438 5,500

(1) The value of unexercised options are based on the difference between the
$1.55 closing price of our common stock on December 31, 2003 on the OTC
Bulletin Board, and the respective option exercise prices.

EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS

We do not currently have any employment agreement or change in control
arrangements with any of our executive officers.

BENEFIT PLANS

STOCK OPTION PLANS. We maintain the 1996 Stock Option Plan for
Non-Employee Directors and the 1997 Stock Option Plan, whereby eligible
officers, directors and employees can be granted options for the future purchase
of Company common stock at the market price on the grant date. The options, if
not exercised within five-year or ten-year periods, expire. At December 31,
2003, 1,364,000 shares were reserved for issuance under outstanding options
under the plans and 336,000 unissued options were available under the two plans.
Generally, employee options have a 10-year life and vest over a 4-year period
from the grant date. Director options have a five-year life and vest eleven
months from the grant date.

401(K) RETIREMENT PLAN. We sponsor a participant contributory
retirement (401(k)) plan, which is available to all employees. Our contribution
to the plan is either a percentage of the participants salary (50% of the
participants contribution up to a maximum of 6%) or a discretionary amount. In
2003, we elected to not contribute to the participants' retirement plan.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information as of December 31, 2003 about
our common stock that may be issued upon the exercise of options, warrants and
rights under all of our existing equity compensation plans, the 1996 Stock
Option Plan for Non-Employee Directors and the 1997 Stock Option Plan.

-------------------------------------- -------------------------- ----------------------- ----------------------------
(C)
(A) (B) NUMBER OF SECURITIES
FOR NUMBER OF SECURITIES TO WEIGHTED AVERAGE REMAINING AVAILABLE
BE ISSUED UPON EXERCISE EXERCISE PRICE OF FUTURE ISSUANCE UNDER
OF OUTSTANDING OPTIONS, OUTSTANDING EQUITY COMPENSATION PLAN
WARRANTS AND OPTIONS, WARRANTS (EXCLUDING SECURITIES
PLAN CATEGORY RIGHTS AND RIGHTS REFLECTED IN COLUMN (A)
-------------------------------------- -------------------------- ----------------------- ----------------------------

Equity compensation plans approved
by security holders.............. 1,364,000 $1.66 336,000

-------------------------------------- -------------------------- ----------------------- ----------------------------
Equity compensation plans not
approved by security holders..... - - -

-------------------------------------- -------------------------- ----------------------- ----------------------------

Total............................ 1,364,000 $1.66 336,000
========= ===== =======
-------------------------------------- -------------------------- ----------------------- ----------------------------

PRINCIPAL SHAREHOLDERS

The table below sets forth information regarding the beneficial
ownership of our common stock as of October 1, 2003, by the following
individuals or groups:

o each person or entity who is known by us to own beneficially
more than 5.0% of our common stock;

o each of our named executive officers;

o each of our directors; and

o all of our directors and named executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of our common stock that are subject to
our stock options, warrants and 8% convertible subordinated promissory notes
that are presently exercisable or exercisable within 60 days of March 30, 2004
are deemed to be outstanding and beneficially owned by the person holding the
stock options, warrants or convertible subordinated promissory notes for the
purpose of computing the percentage of ownership of that person, but are not
treated as outstanding for the purpose of computing the percentage of any other
person.

Unless indicated otherwise below, the address of our directors and
executive officers is c/o RELM Wireless Corporation, 7100 Technology Drive, West
Melbourne, Florida 32904. Except as indicated below, the persons named in the
table have sole voting and dispositive power with respect to all shares of
common stock beneficially owned by them. As of March 30, 2004, we had
outstanding 9,840,639 shares of our common stock.

NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES BENEFICIALLY OWNED PERCENTAGE OWNERSHIP
------------------------------------ ----------------------------------- --------------------

Corporate Opportunities Fund, Corporate
Opportunities Fund Institutional, L.P.... 2,714,053 (1)(2) 24.8%
Corporate Opportunities Fund, L.P........... 425,915 (1)(3) 4.3%
Corporate Opportunities Fund
(Institutional), L.P..................... 2,288,138 (1)(4) 21.2%
SMM Corporate Management, LLC............... 2,714,053 (1)(5) 24.8%
Sanders Morris Harris Inc................... 2,739,053 (1)(6) 25.0%
Wireless Age Communications, Inc............ 1,196,808 (7) 10.8%
Bruce Galloway.............................. 631,736 (8) 6.4%
Donald F.U. Goebert......................... 1,587,964 (9)(10)(11)(12)(14) 16.1%
Ralph R. Whitney, Jr........................ 55,469 (12)(14) *
James C. Gale............................... 2,784,053 (12)(13)(14) 25.3%
George N. Benjamin, III..................... 85,056 (12)(14) *
Randolph K. Piechocki....................... 10,000 (12)(14) *
David P. Storey............................. 600,000 (12)(14)(15) 5.7%
William P. Kelly............................ 297,500 (12)(15) 2.9%
All executive officers and directors as a
group (7 persons)........................ 5,420,042 (9)(10)(11)(12) 45.2%

---------------
*Less than 1%

1) As disclosed in Amendment No. 3 to Schedule 13D filed by Corporate
Opportunities Fund, L.P. ("COF"), Corporate Opportunities Fund
(Institutional), L.P. ("COFI", and together with COF, the "Funds"), SMM
Corporate Management, LLC ("SMM"), general partner of the Funds, Sanders
Morris Harris Inc. ("SMH"), the controlling member of the general
partner, and James C. Gale ("Gale"), the chief investment officer, a
manager, and member of the general partner, dated September 8, 2003, are
deemed to have sole voting and dispositive power as follows: the Funds:
2,714,053; COF: 425,915; COFI: 2,288,138; SMM: 2,714,053; SMH: 2,784,053;
and Gale: 2,759,053. The address of the Funds, SMM, and Gale is 126 East
56th Street, 24th Floor, New York, NY 10022; and of SMH is 600 Travis,
Suite 3100, Houston, TX 77002.

2) Includes presently exercisable warrants to purchase 1,111,110 shares of
common stock.

3) Includes presently exercisable warrants to purchase 173,888 shares of
common stock.

4) Includes presently exercisable warrants to purchase 937,222 shares of
common stock.

5) Includes shares beneficially owned by COF and COFI.

6) Includes shares beneficially owned by SMM.

7) As disclosed in Amendment No. 1 to Schedule 13D filed by Wireless Age
Communications, Inc. ("Wireless") dated February 5, 2004, Wireless has
sole voting and dispositive power over 1,196,808 shares of our common
stock underlying $2,250,000 aggregate principal amount of our outstanding
8% convertible subordinated promissory notes due December 31, 2004,
subject to the first priority security interest of Stacey Minichiello in
$1,700,000 aggregate principal amount of such notes and the underlying
shares. Mr. John Simmonds is chief executive officer of Wireless. The
address of Wireless is 13980 Jane Street, King City, Ontario, Canada L7B
1A3.

8) As disclosed in Amendment No. 1 to Schedule 13G filed by Bruce Galloway
dated June 17, 2003, Mr. Galloway has sole voting and dispositive power
over the shares. The address of Mr. Galloway is 1325 Avenue of the
Americas, 26th Floor, New York, New York 10019.

9) Includes 60,000 shares owned by a partnership controlled by Mr. Goebert.
The address for Mr. Goebert is 400 Willowbrook Lane, West Chester, PA
19382

10) Includes 23,366 shares held in a custodial account for our Employee Stock
Purchase Program, of which Mr. Goebert is a custodian, and 789 shares
held in a Trust under our 401(k) plan, of which Mr. Goebert is a Trustee.

11) Includes 809,154 shares held jointly by Mr. Goebert with his wife, and
3,887 shares held in the name of his wife.

12) Share ownership of the following persons includes options or warrants
presently exercisable or exercisable within 60 days of March 30, 2004 as
follows: for Mr. Goebert - 5,000 shares; for Mr. Whitney - 30,000 shares;
for Mr. Gale - 1,141,110 shares; for Mr. Benjamin - 58,478 shares; for
Mr. Piechocki - 10,000; for Mr. Storey - 600,000 shares; and for Mr.
Kelly - 297,500 shares.

13) Mr. Gale and his wife jointly own 20,000 shares of our common stock.
Additionally, Mr. Gale is managing director of SMH, an investment banking
company. Also includes the 2,784,053 shares of our common stock
beneficially owned by Mr. Gale as described in note (1) above.

14) The named person is a director of RELM.

15) The named person is an executive officer of RELM.

CERTAIN TRANSACTIONS

In a private sale completed August 2003, we issued 500,000 shares of
our common stock to three funds affiliated with our directors for a purchase
price of $0.60 per share. The proceeds from the sale were used to payoff our
then existing credit facility with Fleet Capital Corporation and provide working
capital to be used in executing our business plans, including the expansion of
our digital product line.

DESCRIPTION OF THE UNIT WARRANTS

We issued the unit warrants pursuant to a warrant agreement with
American Stock Transfer and Trust Company as warrant agent. The following
description is a summary of the material provisions of the warrant agreement
governing the unit warrants. This summary is not complete and is qualified in
its entirety by reference to the warrant agreements which is filed as an exhibit
to the registration statement of which this prospectus is a part.

Both the unit warrant certificates and the warrant agreement are
governed by the laws of the State of Florida.

THE UNIT WARRANTS

GENERAL

Each unit warrant, when exercised, will entitle the holder to receive
one fully paid and nonassessable share of our common stock (the "unit warrant
shares"), at an exercise price of $1.05 per share (as adjusted from $1.08 per
share to give effect to our August 2003 private sale of 500,000 shares of our
common stock at $0.60 per share), subject to adjustment (the "unit warrant
exercise price"). The unit warrant exercise price and the number of unit warrant
shares issuable upon the exercise of a unit warrant are both subject to
adjustment in the cases referred to below.

The unit warrants became exercisable on February 12, 2003. Unless
exercised, the unit warrants will automatically expire on 5:00 p.m., New York
City time, on February 11, 2006 (the "unit warrant expiration date"). We may
extend the expiration date by providing notice thereof to the registered
holders.

The unit warrants may be exercised by surrendering the warrant
certificates evidencing the unit warrants to be exercised with the accompanying
subscription form that is properly completed and executed, together with payment
of the unit warrant exercise price to the warrant agent. The unit warrant
exercise price may be paid in cash in United States dollars by wire transfer or
by certified or official bank check to the order of Relm Wireless Corporation.

Upon surrender of the warrant certificate and payment of the unit
warrant exercise price, we will deliver or cause to be delivered, to or upon the
written order of such holder, stock certificates representing the number of
whole unit warrant shares to which the holder is entitled. If less than all of
the unit warrants evidenced by a warrant certificate are to be exercised, a new
warrant certificate will be issued for the remaining number of unit warrants.
Holders of unit warrants will be able to exercise their unit warrants only if a
registration statement relating to the unit warrant shares underlying the unit
warrants is then in effect, or the exercise of such unit warrants is exempt from
the registration requirements of the Securities Act, and such securities are
qualified for sale or exempt from qualification under securities laws of the
states in which the various holders of unit warrants or other persons to whom it
is proposed that unit warrant shares be issued on exercise of the unit warrants
reside.

No fractional unit warrant shares will be issued upon exercise of the
unit warrants. We will pay to the holders of the unit warrant at the time of
exercise an amount in cash equal to such fraction multiplied by the current
market value of such fractional share determined as follows:

(a) If our common stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange or listed
for trading on the NASDAQ Stock Market or the OTC Bulletin Board, the current

value shall be the last reported sale price of our common stock on such exchange
on the last business day prior to the date of exercise of the unit warrant or if
no such sale is made on such day, the average closing bid and asked prices for
such day on such exchange; or

(b) If our common stock is not listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange or listed
for trading on the NASDAQ Stock Market or the OTC Bulletin Board, the current
value shall be the mean of the last reported bid and asked prices reported by
the National Quotation Bureau, Inc. on the last business day prior to the date
of the exercise of the unit warrant; or

(c) If our on common stock is not so listed on a national
securities exchange or admitted to unlisted trading privileges on such exchange
or listed for trading on the NASDAQ Stock Market or the OTC Bulletin Board and
bid and asked prices are not so reported by the National Quotation Bureau, Inc.,
the current value shall be an amount determined in such reasonable manner as may
be prescribed by our board of directors.

In the event of a taxable distribution to holders of our common stock
that results in an adjustment to the number of warrant shares or other
consideration for which a warrant may be exercised, the holders of the warrants
may, in certain circumstances, be deemed to have received a distribution subject
to United States federal income tax as a dividend. See "Certain U.S. Federal Tax
Considerations--Tax Treatment of Registered Warrants."

Certificates for unit warrants will be issued in fully registered form
only. A service charge may be imposed by the warrant agent for registration of
transfer or exchange of warrant certificates. We may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of unit warrants.

In the event a bankruptcy or reorganization is commenced by or against
us, a bankruptcy court may hold that unexercised unit warrants are executory
contracts that may be subject to rejection by us with approval of the bankruptcy
court. As a result, the holders of the unit warrants may, even if sufficient
funds are available, receive no consideration or a lesser amount of
consideration than they would be entitled to receive if they had exercised their
unit warrants prior to the commencement of any such bankruptcy or
reorganization.

NO RIGHTS AS SHAREHOLDERS

The holders of unexercised unit warrants will have no right to vote on
matters submitted to our Shareholders and will have no right to receive
dividends. The holders of the unit warrants will not be entitled to share in our
assets in the event of our liquidation, dissolution or winding up.

ADJUSTMENTS

The number of unit warrant shares issuable upon exercise of the unit
warrants and the unit warrant exercise price will be subject to adjustment in
the following circumstances as specified in the warrant agreement:

(1) In case of any reclassification, capital reorganization, or other
change of outstanding shares of common stock, or in case of any consolidation or
merger with or into another corporation (other than a consolidation or merger in
which we are the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding shares
of common stock), or in case of any sale or conveyance to another corporation of
our property as, or substantially as, an entirety (other than a sale/leaseback,
mortgage or other financing transaction);

(2) If we, at any time while the unit warrants are outstanding, (i) pay
a stock dividend (except scheduled dividends paid on preferred stock that
contain a stated dividend rate) or otherwise make a distribution or
distributions on shares of our common stock or on any other class of capital
stock payable in shares of common stock, (ii) subdivide outstanding shares of
our common stock into a larger number of shares, or (iii) combine outstanding
shares of our common stock into a smaller number of shares;

(3) If we, at any time while the unit warrants are outstanding,
distribute to all holders of our common stock (and not to holders of unit
warrants) evidences of its indebtedness or assets or rights or warrants to
subscribe for or purchase any security; or

(4) Except in the case of our issuing rights to subscribe for shares of
our common stock distributed to all the holders of our common stock and the
exercise of such rights or the exercise of any stock, warrants or options or
stock appreciation rights that may hereafter be exercised under any employee
benefit plan of ours now existing, if we or any subsidiary thereof, as
applicable with respect to "Common Stock Equivalents" (as defined below), at any
time while unexpired unit warrants issued hereunder are outstanding, issue (i)
shares of our common stock at a price per share (an "Issuance Price") that is
less than the lower of eighty-five (85%) percent of the closing bid price of our
common stock on the date of such issuance or the exercise price (the "Trigger
Price") or (ii) rights, warrants, options or other securities or debt that are
convertible into or exchangeable for shares of our common stock ("Common Stock
Equivalents"), entitling any person to acquire shares of our common stock at an
Issuance Price that is less than the Trigger Price (if the holder of the Common
Stock Equivalent so issued shall at any time, whether by operation of purchase
price adjustments, reset provisions, floating conversion, exercise or exchange
prices, receives shares of common stock at a conversion or exercise price less
than the Trigger Price, such issuance shall be deemed to have occurred for less
than the Trigger Price).

Adjustments shall be made at the time of warrant exercise.

REDEMPTION

Subject to the provisions of the warrant agreement, beginning on the
initial exercise date the unit warrants may be redeemed at our option on not
less than 30 days' prior written notice for a redemption price of $0.10 per
warrant if for any twenty (20) consecutive days during such period the last
reported sales price of our common stock for each trading day during such period
is at least 150% of the exercise price of the unit warrants. In the event we
exercise our right to redeem the unit warrants, the unit warrants will be
exercisable until the close of business on the day immediately preceding the
date fixed for redemption in such notice. If any unit warrant called for
redemption is not exercised by such date, it will cease to be exercisable and
the registered holder will be entitled only to the redemption price.

RESERVATION OF SHARES

We have authorized and reserved for issuance and will at all times
reserve and keep available such number of shares of our common stock as will be
issuable upon the exercise of all outstanding unit warrants. Such shares of
common stock, when issued and paid for in accordance with the warrant agreement,
will be duly and validly issued, fully paid and nonassessable, free of
preemptive rights and free from all taxes, liens, charges and security interests
created by or through us.

AMENDMENT

From time to time, we and the warrant agent, without the consent of the
holders of the unit warrants, may amend or supplement the warrant agreement for
several purposes, including curing defects or inconsistencies or making any
change that does not adversely affect the legal rights of any holder. Any
amendment or supplement to the warrant agreement that adversely affects the
legal rights of the holders of the unit warrants will require the written
consent of the holders of a majority of the then outstanding unit warrants,
excluding unit warrants held by us or any of our affiliates. The consent of each
holder of the unit warrants affected will be required for any amendment pursuant
to which the unit warrant exercise price would be increased or the number of
unit warrant shares issuable upon exercise of unit warrants would be decreased,
other than pursuant to adjustments provided in the warrant agreement, or the
exercise period with respect to the unit warrants would be shortened.

REGISTRATION OF THE UNIT WARRANT SHARES

We filed and caused to become effective a registration statement
covering the unit warrant shares and agreed to use our best efforts to keep the
registration statement current while any of the unit warrants are outstanding.

WARRANT AGENT

American Stock Transfer & Trust Company is the warrant agent with
respect to the unit warrants.

DESCRIPTION OF CAPITAL STOCK

The following summarizes all of the material terms and provisions of
the our capital stock. It does not purport to be complete, however, and is
qualified in its entirety by the actual terms and provisions contained in our
articles of incorporation and bylaws, both of which are included as exhibits to
the registration statement of which this prospectus forms a part, and by
applicable Nevada law.

AUTHORIZED CAPITAL STOCK

Our authorized capital stock consists of:

o 20,000,000 shares of common stock, par value $0.60 per share,
of which 9,840,639 shares are outstanding; and

o 1,000,000 shares of preferred stock, par value $1.00 per
share, of which no shares are outstanding.

STOCK RESERVED FOR ISSUANCE

We have reserved 1,364,000 shares of common stock for issuance upon
exercise of outstanding stock options and 6,197,655 shares for issuance upon
exercise of outstanding warrants and convertible notes. We have not reserved any
shares of preferred stock for issuance.

COMMON STOCK

The holders of our common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of our shareholders and do not
have any cumulative rights. Subject to the rights of the holders of any series
of preferred stock, holders of common stock are entitled to receive ratably such
dividends as may be declared by the board of directors out of funds legally
available therefor. We have never paid dividends in the past and do not intend
to do so in the future. Holders of shares of common stock have no preemptive,
conversion, redemption, subscription or similar rights. There are no sinking
fund provisions applicable to our common stock. If we liquidate, dissolve or
wind up, the holders of shares of common stock are entitled to share ratably in
the assets which are legally available for distribution, if any, remaining after
the payment or provision for the payment of all debts and other liabilities and
the payment and setting aside for payment of any preferential amount due to the
holders of shares of any series of preferred stock.

PREFERRED STOCK

Under our articles of incorporation, the board of directors is
authorized, subject to certain limitations prescribed by law, without further
shareholder approval, from time to time to issue up to an aggregate of 1,000,000
shares of preferred stock. The preferred stock may be issued in one or more
series. Each series may have different rights, preferences and designations and
qualifications, limitations and restrictions that may be established by our
board of directors without approval from the shareholders. These rights,
designations and preferences may include:

o number of shares to be issued;

o dividend rights;

o dividend rates;

o right to convert the preferred shares into a different type of
security;

o voting rights attributable to the preferred shares;

o liquidation preferences; and

o terms of redemption.

If our board of directors decides to issue any preferred stock, it may
discourage or make more difficult a merger, tender offer, business combination
or proxy contest, assumption of control by a holder of a large block of our

securities or the removal of incumbent management, even if these events were
favorable to the interests of shareholders. The board of directors, without
shareholder approval, may issue preferred stock with voting and conversion
rights and dividend and liquidation preferences which may adversely affect the
holders of common stock.

WARRANTS

In addition to the unit warrants, we have previously issued warrants to
purchase shares of our common stock. We have warrants outstanding for the
purchase of 806,642 shares of our common stock with an exercise price of $1.88.
The warrants became exercisable on September 16, 2000. The warrants have a five
year term and expire thereafter. The warrants were issued pursuant to two
separate warrant agreements in May 2000. The warrants contain provisions that
prevent the possible dilution of the warrant holders through automatic
adjustments in the number of shares purchasable upon exercise of the warrants in
the event of certain actions affecting our capital stock.

CONVERTIBLE NOTES

We have outstanding $3.15 million of our convertible subordinated notes
as of December 31, 2003. The notes earn interest at 8% per annum, are
convertible at $1.88 per share, and are due on December 31, 2004. Registration
rights were granted to the note holders, and effective June 16, 2000, the common
shares underlying the notes were registered. The notes contain provisions that
prevent the possible dilution of the note holders through an automatic
adjustment in the conversion price in the event of certain actions affecting our
capital stock.

SHARES ELIGIBLE FOR FUTURE SALE BY EQUITY HOLDERS

We have 9,840,639 shares outstanding, of which 8,565,088 shares are
freely tradable without restriction under the Securities Act.

In general, under Rule 144 as currently in effect, if a period of at
least one year has elapsed since the later of the date the "restricted shares"
(as that phrase is defined in Rule 144) were acquired from us and the date they
were acquired from an affiliate, then the holder of the restricted shares
(including an affiliate) is entitled to sell a number of shares within any
three-month period that does not exceed the greater of 1% of the then
outstanding shares of our common stock or the average weekly reported volume of
trading of our common stock on the NASDAQ SmallCap Market during the four
calendar weeks preceding the sale. The holder may only sell shares through
unsolicited brokers' transactions or directly to market makers. Sales under Rule
144 are also subject to certain requirements pertaining to the manner of sales,
notices of sales and the availability of current public information concerning
us.

Under Rule 144(k), if a period of at least two years has elapsed
between the later of the date restricted shares were acquired from us and the
date they were acquired from an affiliate, as applicable, a holder of the
restricted shares who is not an affiliate at the time of the sale and has not
been an affiliate for at least three months prior to the sale would be entitled
to sell the shares immediately without regard to the volume limitations and
other conditions above.

As of the date of this prospectus, options, warrants and convertible
securities to purchase or receive an aggregate of 3,907,290 shares of common
stock are issued and outstanding. We have not filed a registration statement on
Form S-8 or any other registration statement which would cover the common stock
that may be issued pursuant to the exercise of stock options granted under our
stock option plans. As such, the shares issuable upon the exercise of the
options will be restricted securities and subject to Rule 144, as described
above.

We can make no predictions as to the effect, if any, that sales of
shares or the availability of shares for sale will have on the market price
prevailing from time to time. Nevertheless, sales of significant amounts of our
common stock in the public market, or the perception that such sales may occur,
could adversely affect prevailing market prices.

ANTI-TAKEOVER EFFECTS OF VARIOUS PROVISIONS OF NEVADA LAW AND OUR ARTICLES OF
INCORPORATION AND BYLAWS

We are incorporated under the laws of the State of Nevada and are
therefore subject to various provisions of the Nevada corporation laws which may
have the effect of delaying or deterring a change in our control or management.

NEVADA LAW

Nevada's "Combination with Interested Stockholders Statute," Nevada
Revised Statutes 78.411- 78.444, which applies to Nevada corporations like us
having at least 200 stockholders, prohibits an "interested stockholder" from
entering into a "combination" with the corporation, unless specific conditions
are met. A "combination" includes:

o any merger with an "interested stockholder," or any other
corporation which is or after the merger would be, an
affiliate or associate of the interested stockholder;

o any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of assets, in one transaction or a series of
transactions, to an "interested stockholder," having:

o an aggregate market value equal to 5% or more of the
aggregate market value of the corporation's assets,

o an aggregate market value equal to 5% or more of the
aggregate market value of all outstanding shares of
the corporation, or

o representing 10% or more of the earning power or net
income of the corporation;

o any issuance or transfer of shares of the corporation or its
subsidiaries, to the "interested stockholder," having an
aggregate market value equal to 5% or more of the aggregate
market value of all the outstanding shares of the corporation;

o the adoption of any plan or proposal for the liquidation or
dissolution of the corporation proposed by the "interested
stockholder"; and

o transactions which would have the effect of increasing the
proportionate share of outstanding shares of the corporation
owned by the "interested stockholder", or the receipt of
benefits, except proportionately as a stockholder, of any
loans, advances or other financial benefits by an "interested
stockholder."

An "interested stockholder" is a person who

o directly or indirectly owns 10% or more of the voting
power of the outstanding voting shares of the
corporation; or

o is an affiliate or associate of the corporation which
at any time within three years before the date in
question was the beneficial owner, directly or
indirectly, of 10% or more of the voting power of the
then outstanding shares of the corporation.

A corporation to which the statute applies may not engage in a
"combination" within three years after the interested stockholder acquired its
shares, unless the combination or the interested stockholder's acquisition of
shares was approved by the board of directors before the interested stockholder
acquired the shares. If this approval was not obtained, then after the
three-year period expires, the combination may be consummated if all the
requirements in the articles of incorporation are met and either:

o the board of directors of the corporation approves, prior to
such person becoming an "interested stockholder," the
combination or the purchase of shares by the "interested
stockholder";

o the combination is approved by the affirmative vote of holders
of a majority of voting power not beneficially owned by the
"interested stockholder" at a meeting called no earlier than
three years after the date the "interested stockholder" became
such; or

o the aggregate amount of cash and the market value of
consideration other than cash to be received by holders of
common shares and holders of any other class or series of
shares meets the minimum requirements set forth in Sections
78.411 through 78.443, inclusive, and prior to the
consummation of the combination, except in limited
circumstances, the "interested stockholder" will not have
become the beneficial owner of additional voting shares of the
corporation. Nevada's "Control Share Acquisition Statute,"
Nevada Revised Statute Sections 78.378-78.379, prohibits an
acquiror, under some circumstances, from voting shares of a
target corporation's stock after crossing threshold ownership
percentages, unless the acquiror obtains the approval of the
target corporation's stockholders. The Control Share
Acquisition Statute only applies to Nevada corporations with
at least 200 stockholders, including at least 100 record
stockholders who are Nevada residents, and which do business
directly or indirectly in Nevada. While we do not currently
exceed these thresholds, we may well do so in the near future.
In addition, although we do not presently "do business" in
Nevada within the meaning of the Control Share Acquisition
Statute, we may do so in the future. Therefore, it is likely
that the Control Share Acquisition Statute will apply to us in
the future. The statute specifies three thresholds: at least
one-fifth but less than one-third, at least one-third but less
than a majority, and a majority or more, of all the
outstanding voting power. Once an acquiror crosses one of the
above thresholds, shares which it acquired in the transaction
taking it over the threshold or within ninety days become
"Control Shares" which are deprived of the right to vote until
a majority of the disinterested stockholders restore that
right. A special stockholders' meeting may be called at the
request of the acquiror to consider the voting rights of the
acquiror's shares no more than 50 days, unless the acquiror
agrees to a later date, after the delivery by the acquiror to
the corporation of an information statement which sets forth
the range of voting power that the acquiror has acquired or
proposes to acquire and other information concerning the
acquiror and the proposed control share acquisition. If no
such request for a stockholders' meeting is made,
consideration of the voting rights of the acquiror's shares
must be taken at the next special or annual stockholders'
meeting. If the stockholders fail to restore voting rights to
the acquiror or if the acquiror fails to timely deliver an
information statement to the corporation, then the corporation
may, if so provided in its articles of incorporation or
bylaws, call some of the acquiror's shares for redemption. Our
articles of incorporation and bylaws do not currently permit
us to call an acquiror's shares for redemption under these
circumstances. The Control Share Acquisition Statute also
provides that the stockholders who do not vote in favor of
restoring voting rights to the Control Shares may demand
payment for the "fair value" of their shares. This amount is
generally equal to the highest price paid in the transaction
subjecting the stockholder to the statute.

ARTICLES OF INCORPORATION

Our articles of incorporation authorize the issuance of one million
shares of "blank check" preferred stock with such designations, rights and
preferences as may be determined from time by our board of directors.
Accordingly, the board of directors is empowered, without stockholder approval,
to issue shares of preferred stock with dividend, liquidation, conversion,
voting or other rights that could adversely affect the value, voting power or
other rights of the holders of our common stock. In addition, issuance of the
preferred stock could be utilized, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of our company which
could be beneficial to our shareholders. None of these shares of preferred stock
are outstanding as of the date of this prospectus. Although our board of
directors has no present intention to issue any shares of preferred stock, there
can be no assurance that it will not do so in the future.

BYLAWS

Provisions of our bylaws which are summarized below may affect
potential changes our control.

The bylaws provide the number of directors on our board of directors
shall be established by the board of directors, but shall be no less than one.
Between shareholder meetings, the board of directors may appoint new directors
to fill vacancies or newly created directorships.

Our bylaws further provide that shareholder action may be taken at a
meeting of shareholders. Under Nevada law, action may be effected by a consent
in writing if such consent is signed by the holders of the majority of
outstanding shares, unless Nevada law requires a greater percentage.

These provisions of our bylaws could discourage potential acquisition
proposals and could delay or prevent a change in our control or management.
These provisions are intended to enhance the likelihood of continuity and
stability in the composition of our board of directors and in the policies
formulated by our board of directors and to discourage certain types of
transactions that may involve an actual or threatened change in our control.
These provisions are designed to reduce our vulnerability to an unsolicited
acquisition proposal. The provisions also are intended to discourage tactics
that may be used in proxy fights. However, such provisions could have the effect
of discouraging others from making tender offers for our shares or proxy fights
and, as a consequence, they also may inhibit fluctuations in the market price of
our shares that could result from actual or rumored takeover attempts. Such
provisions also may have the effect of preventing changes in our management.

We are not aware of any proposed takeover attempt or any proposed
attempt to acquire a large block of our common stock.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company.

LISTING

Our common stock and the warrants were previously listed on the Nasdaq
Small Cap Market under the symbols "RELM" and "RELMW," respectively, but were
delisted effective May 8, 2003 and are currently quoted on the over-the-counter
Bulletin Board under the same symbols.

CERTAIN U.S. FEDERAL TAX CONSIDERATIONS

This general discussion of certain U.S. federal income and estate tax
considerations with respect to the acquisition, ownership and disposition of a
unit warrant, and of a share of our common stock acquired upon exercise of a
unit warrant, applies to you if you hold the unit warrant and any common stock
acquired on exercise of the unit warrant as capital assets within the meaning of
Section 1221 of the Internal Revenue Code of 1986, as amended.

This discussion is based upon the Internal Revenue Code, Treasury
regulations, Internal Revenue Service rulings and pronouncements and judicial
decisions now in effect, each of which is subject to change at any time by
legislative, administrative, or judicial action, possibly with retroactive
effect. The discussion does not discuss every aspect of U.S. federal income and
estate taxation that may be relevant to a particular taxpayer in light of its
personal circumstances or to persons who are otherwise subject to special tax
treatment. For example, special rules not discussed here may apply to you if you
are:

o a bank or a broker-dealer

o an insurance company;

o a pension or other employee benefit plan;

o a tax exempt organization or entity;

o a U.S. expatriate;

o a trader in securities that elects mark-to-market accounting
treatment;

o a person holding unit warrants or common stock as a part of a
hedging or conversion transaction or a straddle;

o a hybrid entity or an owner of interests therein; or

o a holder whose functional currency is not the U.S. dollar.

In addition, this discussion does not address the effect of any
applicable foreign, state, local or other tax laws. We have not sought and will
not seek any rulings from the Internal Revenue Service concerning the tax
consequences of the acquisition, ownership or disposition of a unit warrant or a
share of our common stock acquired on exercise of a unit warrant and,
accordingly, we cannot assure you that the Internal Revenue Service will not
successfully challenge the tax consequences described below. WE URGE YOU TO
CONSULT YOUR TAX ADVISER WITH RESPECT TO THE U.S. FEDERAL INCOME AND ESTATE TAX
CONSIDERATIONS RELEVANT TO HOLDING AND DISPOSING OF A UNIT WARRANT OR A SHARE OF
OUR COMMON STOCK AS WELL AS ANY TAX CONSIDERATIONS APPLICABLE UNDER THE LAWS OF
ANY FOREIGN, STATE, LOCAL OR OTHER TAXING JURISDICTION.

U.S. HOLDERS

If you are a "U.S. Holder," as defined below, this section applies to
you. Otherwise, the section "Non-U.S. Holders" applies to you. You are a U.S.
Holder if you are the beneficial owner of a unit warrant or share of our common
stock acquired on exercise of a unit warrant and you are:

o a citizen or individual resident of the United States;

o a corporation, including an entity treated as a corporation
for U.S. federal income tax purposes, created or organized in
the United States or under the laws of the United States or of
any state thereof or the District of Columbia;

o an estate whose income is includible in gross income for U.S.
federal income tax purposes regardless of its source; or

o a trust, if (1) a court within the United States is able to
exercise primary supervision over the administration of the
trust, and one or more United States persons have the
authority to control all substantial decisions of the trust,
or (2) the trust was in existence on August 20, 1996 and
properly elected to continue to be treated as a United States
person.

TAX TREATMENT OF UNIT WARRANTS. A U.S. Holder will not have a taxable
event on exercise of a unit, except with respect to cash, if any, received in
lieu of a fractional share. A U.S. Holder will have a tax basis in the share of
our common stock received upon exercise of a unit warrant equal to the U.S.
Holder's tax basis in the unit warrant surrendered, plus the amount of cash paid
for the exercise price, adjusted for any fractional share for which cash is
received. In the case of a U.S. Holder that purchased a unit warrant as part of
a unit consisting of a share of our common stock and a unit warrant, the U.S.
Holder's tax basis in the unit warrant will equal that portion of the purchase
price of the unit that was allocated to the unit warrant based upon the relative
fair market values of the share of our common stock and the unit warrant
comprising the unit. In the case of a U.S. Holder that purchased a unit warrant
separately, the U.S. Holder's tax basis in the unit warrant will be the purchase
price therefor. A U.S. Holder generally will have a holding period in a share of
our common stock acquired upon exercise of a unit warrant that commences on the
date of exercise of the unit warrant.

A U.S. Holder will recognize gain or loss upon a sale, redemption,
lapse or other taxable disposition of a unit warrant in an amount equal to the
difference between the sum of the amount of cash and the fair market value of
any property received for the unit warrant and the U.S. Holder's tax basis in
the unit warrant. The gain or loss upon a sale, redemption, lapse or other
taxable disposition of a unit warrant will be capital gain or loss if the common
stock to which the unit warrant relates would be a capital asset in the hands of
the warrant holder and will be long-term capital gain or loss if the holding
period for the unit warrant exceeds one year.

An adjustment to the exercise price of the unit warrants, or the
failure to make an adjustment, may result in certain circumstances in a
constructive distribution to the holders of the unit warrants that could be
taxable as a dividend under Section 305 of the Code. In that event, a holder's
tax basis in the unit warrants would increase by the amount of the dividend.

TAX TREATMENT OF COMMON STOCK ACQUIRED ON EXERCISE OF A UNIT WARRANT.
Cash distributed on our common stock will be treated as a dividend to the extent
of our current and accumulated earnings and profits attributable to the
distribution as determined under U.S. federal income tax principles. If the
amount of a distribution exceeds our current and accumulated earnings and
profits attributable to the distribution, the distribution next will be treated
as a nontaxable return of capital and will be applied against and reduce your
adjusted tax basis in the common stock, on a share-by-share basis, but not below
zero. If the distribution exceeds both our current and accumulated earnings and
profits attributable to the distribution and your adjusted tax basis in our
common stock, the excess will be treated as capital gain and will be either
long-term or short-term capital gain depending on whether your holding period
for that common stock is or is not more than one year.

Corporate U.S. Holders of our common stock generally should be eligible
for the 70% dividends-received deduction with respect to the portion of any
distribution on our common stock taxable as a dividend. However, corporate
investors should consider certain provisions that may limit the availability of
a dividends-received deduction, including but not limited to the holding period
rules of section 246(c) of the Internal Revenue Code, the rules of section 246A
that reduce the dividends-received deduction on dividends on certain
debt-financed stock, and the rules in section 1059 of the Internal Revenue Code
that reduce the basis of stock (and may require recognition of taxable gain) in
respect of certain extraordinary dividends, as well as the effect of the
dividends-received deduction on the determination of alternative minimum tax
liability.

If you sell or dispose of our common stock in a taxable transaction,
you will recognize capital gain or loss equal to the difference between the sum
of the cash and the fair market value of any property received and your tax
basis in the common stock. A U.S. Holder's tax basis in shares of our common
stock acquired upon exercise of a unit warrant will be determined in the manner
set forth in "--U.S. Holders --Tax Treatment of Unit Warrants" above. The gain
or loss will be long-term capital gain or loss if your holding period for your
stock exceeds one year. For corporate taxpayers, long-term capital gains are
taxed at the same rate as ordinary income. For individual taxpayers, net capital
gain -- the excess of a taxpayer's net long-term capital gain over short-term
capital loss -- is subject to a maximum tax rate of 15%. The deductibility of
capital losses is restricted, and capital losses generally may be used only to
reduce capital gains to the extent thereof.

INFORMATION REPORTING; BACKUP WITHHOLDING. We are required to furnish
to record holders of our common stock, other than corporations and other exempt
holders, and to the Internal Revenue Service, information with respect to
dividends paid on our common stock.

Certain U.S. Holders may be subject to backup withholding at the rate
of 28% with respect to dividends paid on our common stock or with respect to
proceeds received from a disposition of a unit warrant or a share of our common
stock. Generally, backup withholding applies only if:

o the payee fails to furnish a correct taxpayer identification
number to the payer in the manner required or fails to
demonstrate that it otherwise qualifies for an exemption;

o the Internal Revenue Service notifies the payer that the
taxpayer identification number furnished by the payee is
incorrect;

o the payee has failed to report properly the receipt of a
"reportable payment" on one or more occasions, and the
Internal Revenue Service has notified the payer that
withholding is required; or

o the payee fails (in certain circumstances) to provide a
certified statement, signed under penalties of perjury, that
the taxpayer identification number furnished is the correct
number and that the holder is not subject to backup
withholding.

Backup withholding is not an additional tax but, rather, is a method of
tax collection. A U.S. Holder will be entitled to a refund or a credit against
its actual tax liability for any amount withheld under the backup withholding
rules, provided the required information is furnished to the Internal Revenue
Service.

NON-U.S. HOLDERS

The following discussion is limited to U.S. federal income and estate
tax consequences relevant to a Non-U.S. Holder. As used herein, a "Non-U.S.
Holder" is a beneficial owner of a unit warrant or share of our common stock
acquired on exercise of a unit warrant that, for U.S. federal income tax
purposes, is

o a nonresident alien individual;

o a corporation (or an entity treated as a corporation) created
or organized in or under the law of a country (or a political
subdivision thereof) other than the United States; or

o a foreign estate or trust, which generally is an estate or
trust that is not a U.S. Holder.

This discussion does not address tax consequences relevant to an
expatriate or former long-term resident of the United States or to a person who
holds a unit warrant or share of our common stock through a partnership. A
person who holds a unit warrant or share of our common stock through a hybrid
entity (that is, an entity that is fiscally transparent for U.S. federal income
tax purposes but not for foreign tax purposes) may not be entitled to the
benefits of a tax treaty. For example, a person who is a partner in a foreign
partnership or beneficiary of a foreign trust or estate and who is subject to
U.S. federal income tax because of his own status, for example, as a U.S.
resident or a foreign person engaged in trade or business in the United States,
may be subject to U.S. federal income tax even though the foreign partnership,
trust or estate is not itself subject to U.S. federal income tax. For purposes
of the following discussion, "U.S. trade or business income" of a Non-U.S.
Holder generally means a dividend on our common stock or gain on a sale,
exchange or retirement of a unit warrant or share of our common stock if the
dividend or gain is (i) effectively connected with trade or business conducted
by the Non-U.S. Holder within the United States or (ii) in most cases of a
resident of a country with which the United States has an income tax treaty,
attributable to a permanent establishment (or fixed base) of the Non-U.S. Holder
in the United States.

TAX TREATMENT OF UNIT WARRANTS. The exercise of a unit warrant will
not, be a taxable disposition of the unit warrant for the exercising Non-U.S.
Holder, except with respect to cash, if any, received in lieu of a fractional
share. In general, a Non-U.S. Holder will not be subject to U.S. federal income
tax upon a taxable disposition of a unit warrant, except as described in
"Certain U.S. Federal Tax Consequences --Non-U.S. Holders --Taxable Disposition
of a Unit Warrant or Share of Common Stock" below.

An adjustment to the exercise price of the unit warrants, or the
failure to make an adjustment, in certain circumstances may result in a
constructive distribution to the holders of the unit warrants that could be
taxable as a dividend under Section 305 of the Code. In that event, a holder's
tax basis in the unit warrant would increase by the amount of the dividend.

DIVIDENDS ON COMMON STOCK. If a unit warrant has been exercised, a
Non-U.S. Holder of our common stock generally will be subject to withholding of
U.S. federal income tax on dividends at a 30% rate or a lower rate that an
applicable income tax treaty may specify. Non-U.S. Holders should consult their
tax advisers on their entitlement to benefits under a relevant income tax
treaty. A Non-U.S. Holder of our common stock that claims the benefit of an
income tax treaty rate generally is required to satisfy applicable certification
and other requirements. A Non-U.S. Holder of our common stock that is eligible
for a reduced rate of U.S. withholding tax under an income tax treaty may obtain
a refund or credit of any excess amounts withheld by filing an appropriate claim
for a refund with the IRS.

Dividends that are U.S. trade or business income are generally subject
to U.S. federal income tax on a net income basis at graduated rates in the same
manner that a U.S. taxpayer is subject to tax and will be exempt from the
withholding tax described above. In the case of a Non-U.S. Holder that is a
corporation, U.S. trade or business income under certain circumstances also will
be subject to an additional branch profits tax at a 30% rate (or, if applicable,
a lower treaty rate). To claim an exemption from withholding because a dividend
is U.S. trade or business income, a Non-U.S. Holder must satisfy applicable
certification and other requirements.

TAXABLE DISPOSITION OF A UNIT WARRANT OR SHARE OF COMMON STOCK. Subject
to the discussion below of backup withholding, you generally will not be subject
to U.S. federal income tax on any gain recognized upon a sale, redemption, lapse
or other taxable disposition of a unit warrant or upon a sale, exchange or other
taxable disposition of our common stock. However, you will be subject to U.S.
federal income tax on the gain if:

o the gain is U.S. trade or business income (in which case, if
you are a foreign corporation (or a foreign entity treated as
a corporation), you may also be subject to the branch profits
tax at a 30% rate (or, if applicable, a lower treaty rate));

o you are a non-resident alien individual, you are present in
the United States for 183 or more days in the taxable year of
disposition and either (a) you have a "tax home" in the United
States for U.S. federal income tax purposes or (b) the gain is
attributable to an office or other fixed place of business you
maintain in the United States; or

o we are a "United States real property holding corporation"
within the meaning of section 897(c) of the Internal Revenue
Code, or we have been a United States real property holding
corporation at any time during the shorter of the five year
period ending on the date of your sale or other disposition
and the period you have held the unit warrant or common stock
that is sold or otherwise disposed of. We believe that we
currently are not a United States real property holding
corporation, and we do not anticipate becoming one. No
assurance, however, can be provided that we will not become a
United States real property holding corporation in the future.

A Non-U.S. Holder's tax basis in a unit warrant and in a share of our
common stock acquired upon exercise of a unit warrant will be determined in the
same manner set forth in "Certain U.S. Federal Tax Consequences -- U.S. Holders
-- Tax Treatment of Unit Warrants" above.

FEDERAL ESTATE TAX. In the case of an individual who is not a citizen
of the United States and who is not domiciled in the United States at the time
of death,

o a unit warrant that is owned, or treated as owned, at the time
of death may be subject to U.S. federal estate tax, except as
an applicable estate tax treaty provides to the contrary; and

o a share of our common stock will be subject to U.S. federal
estate tax, except as an applicable estate tax treaty provides
to the contrary.

In the case of an individual who is not a citizen of the United States
but who is domiciled in the United States at the time of death, a unit warrant
and a share of our common stock will be subject to U.S. federal estate tax,
regardless of whether the individual is not a resident of the United States,
except as an applicable estate tax treaty provides to the contrary.

INFORMATION REPORTING; BACKUP WITHHOLDING. Under specific
circumstances, the IRS requires information reporting and backup withholding at
a rate of 28% on dividends paid to a Non-U.S. Holder of our common stock that is
required to certify its Non-U.S. Holder status but fails to do so. The proceeds
of a disposition of a unit warrant or a share of our common stock by a Non-U.S.
Holder to or through a foreign office of a broker will not be subject to backup
withholding. However, information reporting will apply in the case of a "U.S.
related broker" unless the broker has documentary evidence in its files of the
Non-U.S. Holder's foreign status and has no actual knowledge to the contrary or
unless the Non-U.S. Holder otherwise establishes an exemption. A broker is a
"U.S. related broker" if the broker is a United States person, a controlled
foreign corporation for U.S. federal income tax purposes, a foreign person 50%
or more of whose income from all sources for a designated period is from
activities that are effectively connected with the conduct of trade or business
within the United States or a foreign partnership that, at any time during its
taxable year, is owned 50% or more (by income or capital interest) by United
States persons or is engaged in the conduct of trade or business in the United
States.

Any amounts withheld under the backup withholding rules from a payment
to a Non-U.S. Holder will be allowed as a refund or as a credit against the
Non-U.S. Holder's U.S. federal income tax liability, provided the requisite
procedures are followed.

PLAN OF DISTRIBUTION

GENERAL

The shares of common stock underlying the unit warrants offered hereby
are issuable upon the exercise of unit warrants that were issued by us in
connection with a public rights offering, which we completed on March 22, 2002.
We engaged Noble International Investments, Inc. as a standby underwriter for
this rights offering.

We offered units comprised of one share of our common stock and one
warrant to purchase one share of our common stock, exercisable at $1.05 (as
adjusted from $1.08 per share to give effect to our August, 2003 private sale of
500,000 shares of our common stock at $0.60 per share), at any time on or after
February 12, 2003 until February 11, 2006.

In the offering, we sold 2,775,000 units consisting of 2,775,000 shares
of our common stock and warrants to purchase 2,775,000 shares of our common
stock at a purchase price of $0.90 per unit. On May 17, 2002, Noble exercised
its option to purchase 416,250 additional units (416,250 shares of our common
stock and warrants to purchase 416,250 shares of our common stock) at a purchase
price of $0.90 per unit to cover over-allotments.

All of the shares of common stock underlying the unit warrants sold
pursuant to this prospectus shall be sold by us, except that Noble may be assist
us in soliciting the exercise of the unit warrants as described below under
"--Warrant Solicitation Fees."

EXERCISE OF THE UNIT WARRANTS

The warrants may be exercised upon surrender of the warrant certificate
on or prior February 11, 2006, the expiration date of the unit warrants, at the
offices of the warrant agent, with the form of "Election to Purchase" on the
reverse side of the warrant certificate completed and executed, as indicated,
accompanied by payment of the full exercise price (by certified check payable to
the warrant agent) for the number of unit warrants being exercised. See
"Description of the Unit Warrants." American Stock Transfer & Trust Company is
the transfer agent and registrar for the our common stock and the warrant agent
for the warrants. However, our ability to sell the shares of our common stock
underlying the unit warrants is subject to the continued effectiveness of the
registration statement of which this prospectus is a part as well as the
qualification of these shares of common stock for sale in the states and other
jurisdictions where holders of the unit warrants reside. There can be no
assurance that we will, at all times during the term of the unit warrants, be
able to maintain such registration statement or qualification in effect, and in
the event we are unable to do so, the unit warrants may not be exercisable by
certain holders and may ultimately become worthless. If we are unable to qualify
the shares of common stock underlying the unit warrants for sale in particular
states or jurisdictions, holders of the unit warrants in those states or
jurisdictions may have to sell the unit warrants unexercised (market conditions
permitting) or allow the unit warrants to expire.

WARRANT SOLICITATION FEES

We have agreed for a period of three years, commencing on February 12,
2003, to pay to Noble a warrant solicitation fee of 5% of the exercise price for
each unit warrant exercised during the three year period, subject to Noble's
compliance with the rules of the NASD.

To the extent Noble engages in market making activities or solicited
brokerage activities with regard to our shares of common stock, Noble will be
prohibited under Regulation M of the Securities Exchange Act of 1934 before the
solicitation or before the exercise of any warrant based upon a prior
solicitation. As a result, Noble may be unable to continue to provide a market
for our common stock during certain periods while the unit warrants are
exercisable.

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the periodic reporting and other informational
requirements of the Securities Exchange Act. We will file annual, quarterly and
special reports and other information with the SEC. In addition, we have agreed
under the warrant agreement that, whether or not we are required to do so by the
rules and regulations of the SEC, for so long as any of the warrants remain
outstanding, we will furnish to the holders of any of the warrants and file with
the SEC, unless the SEC will not accept such a filing, (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the SEC on Forms 10-Q and 10-K if we were required to file such forms,
including a "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information only, a
report thereon by our certified independent public accountants and (ii) all
reports that would be required to be filed with the SEC on Form 8-K if we were
required to file such reports.

We have filed a registration statement on Form S-1 with the SEC to
register under the Securities Act the shares of our common stock issuable upon
exercise of the warrants. This prospectus constitutes a part of that
registration statement. As allowed by the SEC's rules, this prospectus does not
contain all the information set forth in the registration statement, certain
parts of which have been omitted in accordance with the rules and regulations of
the SEC. Please refer to the registration statement and related exhibits and
schedules filed therewith for further information with respect to us and the
registered notes offered hereby. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
registration statement or otherwise filed by us with the SEC and each such
statement is qualified in its entirety by such reference.

You may read and copy any document we file at the SEC's public
reference rooms located in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public from
commercial document retrieval services and at the web site maintained by the SEC
at: http://www.sec.gov. Our reports are also available on our Internet Website
at www.Relm.com as soon as practicable after we file such material with the SEC.
The information contained on our website is not incorporated by reference in
this prospectus. This information is available without charge upon written or
oral request to:

Relm Wireless Corporation
7100 Technology Drive
West Melbourne, Florida 32904
(321) 984-1414
Attention: Investor Relations

You should rely only on the information provided in this prospectus or
any prospectus supplement. We have not authorized anyone else to provide you
with different information. We may not make an offer of the shares of our common
stock issuable upon exercise of the unit warrants in any state where the offer
is not permitted. The delivery of this prospectus does not, under any
circumstances, mean that there has not been a change in our affairs since the
date of this prospectus. It also does not mean that the information in this
prospectus is correct after this date.

LEGAL MATTERS

The validity of the shares of our common stock issuable upon the
exercise of the unit warrants issued hereby will be passed upon by Greenberg
Traurig, P.A., Miami, Florida.

EXPERTS

The consolidated financial statements, as of December 31, 2003 and 2002
and for the two years then ended, included in this Prospectus and in the
Registration Statement have been audited by BDO Seidman, LLP, independent
certified public accountants, to the extent and for the periods set forth in
their report appearing elsewhere herein and in the Registration Statement, and
are included in reliance upon such report given upon the authority of said firm
as experts in auditing and accounting.

The consolidated statements of operations, stockholders' equity and
cash flows of RELM Wireless Corporation for the year ended December 31, 2001,
appearing in this Prospectus and Registration Statement have been audited by
Ernst & Young LLP, independent certified public accountants, as set forth in
their report thereon appearing elsewhere herein, and are included in reliance
upon such report given on the authority of such firm as experts in accounting
and auditing.

On December 2, 2002, we dismissed Ernst & Young LLP as our independent
accountant and on December 12, 2002 we engaged BDO Seidman LLP as our
independent accountant to audit our financial statements for the year ending
December 31, 2002. The decision to dismiss Ernst & Young LLP and engage BDO
Seidman LLP was unanimously recommended by our audit committee and unanimously
approved by our board of directors.

RELM WIRELESS CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Certified Public Accountants BDO Seidman LLP...................... F-2
Report of Independent Certified Public Accountants Ernst & Young LLP.................... F-3
Consolidated Balance Sheets as of December 31, 2003 and 2002............................ F-4 - F-5
Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and
2001.................................................................................. F-6
Consolidated Statements of Changes in Stockholders' Equity for the years ended December
31, 2003, 2002 and 2001............................................................... F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and
2001.................................................................................. F-8
Notes to Consolidated Financial Statements.............................................. F-9

F-1

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of
RELM Wireless Corporation

We have audited the accompanying consolidated balance sheets of RELM Wireless
Corporation as of December 31, 2003 and 2002, and the related consolidated
statements of operations, changes in stockholders' equity, and cash flows for
each of the two years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of RELM Wireless
Corporation as of December 31, 2003 and 2002, and the consolidated results of
its operations and its cash flows for each of the two years then ended in
conformity with accounting principles generally accepted in the United States of
America.

/s/ BDO Seidman LLP

Miami, Florida
February 13, 2004
except for Note 16, paragraph 3 (Legal Proceedings)
as to which the date is March 1, 2004, and Note 13,
paragraph 3, as to which the date is March 12, 2004

F-2

Report of Independent Certified Public Accountants

Board of Directors and Stockholders
RELM Wireless Corporation

We have audited the accompanying consolidated statements of operations,
stockholders' equity and cash flows of RELM Wireless Corporation for the year
ended December 31, 2001. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated results of operations and cash flows of
RELM Wireless Corporation for the year ended December 31, 2001, in conformity
with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

Jacksonville, Florida
March 1, 2002,
except for Note 13, paragraph 1, as to which the date is
March 22, 2002

F-3

RELM WIRELESS CORPORATION

CONSOLIDATED BALANCE SHEET
(In Thousands)

DECEMBER 31
2003 2002
-------------------

ASSETS
-------

Current assets:
Cash and cash equivalents $ 1,293 $ 1,631
Trade accounts receivable (net of allowance for doubtful
accounts of $61 in 2003 and $69 in 2002) 2,880 765
Inventories, net 5,698 7,862
Prepaid expenses and other current 374 310
-------------------
Total current assets 10,245 10,568

Property, plant and equipment, net 1,468 1,792
Debt issuance costs, net 171 341
Other assets 345 155
-------------------
Total assets $12,229 $12,856
===================

See notes to consolidated financial statements.

F-4

RELM WIRELESS CORPORATION

CONSOLIDATED BALANCE SHEETS (CONTINUED)
(In Thousands, Except Share Data)

DECEMBER 31
2003 2002
----------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:
Current maturities of long-term debt $ 3,150 $ 1,970
Accounts payable 891 2,127
Accrued compensation and related taxes 547 466
Accrued warranty expense 82 103
Accrued other expenses and other current liabilities 302 168
----------------------
Total current liabilities 4,972 4,834

Long-term debt 1,272 3,150

Commitments and Contingencies
Stockholders' equity:
Preferred stock; $1.00 par value; 1,000,000 authorized shares
none issued or outstanding -- --
Common stock; $.60 par value; 20,000,000 authorized shares:
9,073,085 and 8,540,088 issued and outstanding shares at
December 31, 2003 and 2002, respectively 5,443 5,123
Additional paid-in capital 21,482 21,557
Accumulated Deficit (20,940) (21,808)
----------------------
Total stockholders' equity 5,985 4,872
----------------------
Total liabilities and stockholders' equity $ 12,229 $ 12,856
======================

See notes to consolidated financial statements.

F-5

RELM WIRELESS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Share Data)

YEAR ENDED DECEMBER 31
2003 2002 2001
------------------------------------

Sales $ 19,728 $ 15,978 $ 22,809
Expenses:
Cost of products 12,112 11,760 16,190
Selling, general & administrative 6,350 6,476 5,926
Loss on notes receivable -- 1,075 --
------------------------------------
18,462 19,311 22,116
------------------------------------

Operating income (loss) 1,266 (3,333) 693
Other income (expense):
Interest expense (442) (456) (579)
Other income 57 158 8
------------------------------------
Total other (expense) (385) (298) (571)
------------------------------------

Income (loss) before income taxes 881 (3,631) 122

Income taxes (13) -- --
------------------------------------
Net income (loss) $ 868 $ (3,631) $ 122
====================================

Net income (loss) per share-basic: $ 0.10 $ (0.47) $ 0.02

Net income (loss) per share-diluted: $ 0.09 $ (0.47) $ 0.02

Weighted average shares outstanding - basic 9,002 7,787 5,346
====================================
Weighted average shares outstanding - diluted 9,173 7,787 5,383
====================================

See notes to consolidated financial statements.

F-6

RELM WIRELESS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands, Except Share Data)

ADDITIONAL
COMMON STOCK PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
------------------------------------------------------------

Balance at December 31, 2000 5,346,174 $3,207 $ 21,452 $(18,299) $ 6,360

Net income -- -- -- 122 122
------------------------------------------------------------
Balance at December 31, 2001 5,346,174 3,207 21,452 (18,177) 6,482

Public rights offering 3,191,250 1,915 106 -- 2,021

Other 2,664 1 (1) -- --

Net loss -- -- -- (3,631) (3,631)

------------------------------------------------------------
Balance at December 31, 2002 8,540,088 $5,123 $ 21,557 $(21,808) $ 4,872

Common stock issued 500,000 300 -- -- 300

Common stock option
exercises 32,500 20 (2) -- 18

Fees for registration
of shares -- -- (73) -- (73)

Other 497 -- -- -- --

Net income -- -- -- 868 868

------------------------------------------------------------
Balance at December 31, 2003 9,073,085 $5,443 $ 21,482 $(20,940) $ 5,985
============================================================

See notes to consolidated financial statements.

F-7

RELM WIRELESS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

YEAR ENDED DECEMBER 31
2003 2002 2001
---------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 868 $(3,631) $ 122
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Loss on notes receivable -- 1,075 --
Allowance for doubtful accounts (8) (1,471) (15)
Inventories reserve 200 283 341
Write down of investment banking agreement -- 120 (8)
Write down of technology agreement -- 211 --
Allowance for note receivable 35 -- --
Depreciation and amortization 675 787 1,056
Change in operating assets and liabilities:
Accounts receivable (2,107) 4,303 130
Inventories 1,964 816 (362)
Accounts payable (1,237) (1,043) (431)
Prepaid expenses and other current (63) (13) (76)
Other assets (243) 222 (70)
Accrued compensation and related taxes 81 (66) 171
Accrued warranty expense (21) 24 (225)
Accrued other expenses and other current liabilities 134 (83) (341)
---------------------------------
CASH PROVIDED BY OPERATING ACTIVITIES 278 1,534 292
---------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (170) (157) (87)
Payment for technology agreement -- (125) --
Collections on notes receivable 7 9 13
Proceeds from disposals of facility and equipment -- 2 2
---------------------------------
Cash used in investing activities (163) (271) (72)

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of debt and capital lease obligations -- (10) (748)
Proceeds from issuance of common stock 318 -- --
Net increase (decrease) in revolving credit lines (698) (1,978) 655
Fees for registration of shares (73) -- --
Rights offering -- 2,021 --
---------------------------------
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (453) 33 (93)
------- ------- -------

Increase (decrease) in cash (338) 1,296 127
Cash and cash equivalents, beginning of year 1,631 335 208
---------------------------------
Cash and cash equivalents, end of year $ 1,293 $ 1,631 $ 335
=================================

SUPPLEMENTAL DISCLOSURE
Interest paid $ 442 $ 476 $ 579
=================================

See notes to consolidated financial statements.

F-8

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements
(in Thousands, Except Share Data and Percentages)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

The Company's primary business is the designing, manufacturing, and marketing of
wireless communications equipment consisting primarily of land mobile radios and
base station components and subsystems, which are sold to the government and
business and industrial markets. The Company has only one reportable business
segment.

PRINCIPLES OF CONSOLIDATION

The accounts of the Company and its subsidiary have been included in the
accompanying consolidated financial statements. All significant intercompany
balances and transactions have been eliminated in consolidation.

INVENTORIES

Inventories are stated at the lower of cost (determined by the average cost
method) or market. Shipping and handling costs are classified as a component of
cost of products in the consolidated statements of operations.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is carried at cost. Expenditures for maintenance,
repairs and minor renewals are expensed as incurred. When properties are retired
or otherwise disposed of, the related cost and accumulated depreciation are
removed from the respective accounts and the resulting gain or loss is reflected
in operations for the period.

Depreciation is generally computed on the straight-line method using lives of 3
to 10 years on machinery and equipment and 5 to 30 years on buildings and
building improvements.

IMPAIRMENT OF LONG-LIVED ASSETS

Management reviews long-lived assets and intangible assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to future net cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets which
considers the discounted future net cash flows. During 2002, the Company
recorded the following asset impairments.

On May 12, 2000, the Company engaged an investment banking firm. In connection
with the engagement, the Company granted warrants to JMS, valued at $226 to
purchase 166,153 shares of the Company's common stock at an aggregate purchase

F-9

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

price of one hundred dollars. The warrants had a five-year term and an exercise
price of $3.25 per share. The value of the warrants was being amortized on a
straight-line basis over the estimated life of the contract. Accumulated
amortization at December 31, 2002 was $120. During the fourth quarter of 2002,
the Company was notified that JMS had closed its New York office, and the firm
no longer employed the principals who handled the Company's account. Therefore,
the Company did not anticipate receiving further services under this agreement.
Accordingly, the Company elected to write-off the remaining value of the
warrants totaling approximately $120 during the fourth quarter of 2002.

In March 1998, the Company entered into an agreement with Racal Communications,
Inc. (presently known as "Thales") which, among other things, licensed the
Company to use Thales' digital APCO project 25-compliant technology under
specified terms and conditions. The cost of the technology license was $300 and
was being amortized over a period of eight years. The Company has since
developed its own APCO project 25-compliant digital technology, which was
completed in the fourth quarter 2002. Consequently, the Company does not
anticipate utilizing the technology provided for by its agreement with Racal.
Accordingly, the Company elected to write-off the remaining value of the
technology agreement totaling $211 during the fourth quarter of 2002.

CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company records an allowance for doubtful accounts based on specifically
identified amounts that the Company believes to be uncollectible. The Company
also records additional allowance based on certain percentages of the Company's
aged receivables, which are determined based on historical experience and the
Company's assessment of the general financial conditions affecting the Company's
customer base. If the Company's actual collections experience changes, revisions
to the Company's allowance may be required. After all attempts to collect a
receivable have failed, the receivable is written off against the allowance. In
addition, with respect to notes receivable, the Company stops accruing interest
when collection of a note becomes doubtful. Based on the information available,
management believes the allowance for doubtful accounts as of December 31, 2003
is adequate.

REVENUE RECOGNITION

Sales revenue is recognized as goods are shipped, except for sales to the U.S.
Government, which are recognized when the goods are received.

INCOME TAXES

Income taxes are calculated using the liability method specified by Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes."

F-10

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carry-forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
Realization of deferred tax assets associated with federal and state net
operating loss carry-forwards ("NOLs") is dependent upon generating sufficient
taxable income prior to their expiration. The Company believes that there is a
risk that these NOLs may expire unused and accordingly, has established a
valuation reserve against them in full.

CONCENTRATION OF CREDIT RISK

The Company is in the business of designing, manufacturing, and marketing of
wireless communications equipment consisting primarily of land mobile radios,
base station components and subsystems. The Company performs periodic credit
evaluations of its customers' financial condition and generally does not require
collateral. At December 31, 2003 and 2002, accounts receivable from governmental
customers were approximately $2,183 and $125, respectively. Receivables
generally are due within 30 days. Credit losses relating to customers in the
land mobile radios, base station components and subsystems industry consistently
have been within management's expectations and are comparable to losses for the
portfolio as a whole.

The Company primarily maintains cash balances at one financial institution.
Accounts are insured by the Federal Deposit Insurance Corporation ("FDIC") up to
$100. From time to time, the Company had cash in financial institutions in
excess of federally insured limits. As of December 31, 2003, the Company had
cash in excess of FDIC limits of approximately $1,236.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's management believes that carrying amounts of cash and cash
equivalents, accounts receivable, accounts payable and other accrued liabilities
approximates fair value because of the short-term nature of these financial
instruments. The fair value of short-term and long-term debt approximates
market, as the interest rates on these financial instruments approximate current
rates available to the Company.

ADVERTISING COSTS

The cost for advertising is expensed as incurred. The total advertising expense
for 2003, 2002, and 2001 was $241, $202, and $188, respectively.

F-11

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

ENGINEERING, RESEARCH AND DEVELOPMENT COSTS

Included in selling, general and administrative expenses for 2003, 2002, and
2001 are research and development costs of $1,455, $1,865, and $1,359,
respectively.

STOCK BASED COMPENSATION

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure, an amendment of FASB Statement No. 123."
This Statement amends methods of transition for a voluntary change to the fair
value method of accounting for stock-based employee compensation. In addition,
this Statement amends the disclosure requirements of Statement No. 123 to
require prominent disclosures in both annual and interim financial statements.
Certain of the disclosure modifications are required for fiscal years ended
after December 15, 2002 and are included in the Notes to Consolidated Financial
Statements.

The Company accounts for stock options issued using the intrinsic value method
and, accordingly, no compensation cost has been recognized for stock options
granted as such options granted had an exercise price greater than or equal to
the market value of the underlying common stock on the date of the grant. If the
Company determined compensation cost based on the fair value of the options at
the grant date, the Company's net income (loss) and basic and diluted net income
(loss) per common share would have reflected the pro forma amounts shown below:

YEAR ENDED DECEMBER 31
2003 2002 2001
------------------------------------

Net income (loss) as reported $868 $(3,631) $122
----------------------------------------------------------------------------------------
Add: Stock-based employee compensation -- -- --
expense included in reported net income,
net of related tax effects
----------------------------------------------------------------------------------------
Deduct: Total stock-based employee (84) (676) (620)
compensation expense determined under fair
value based method for all awards, net of
related tax effects
------------------------------------
Pro-forma net income (loss) $784 $(4,307) $(498)
====================================
EARNINGS PER SHARE:
----------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------
Basic--as reported $0.10 $(0.47) $0.02
===== ====== ======
Basic--pro forma 0.09 (0.55) (0.09)
===== ====== ======
Diluted--as reported 0.10 (0.47) 0.02
===== ====== ======
Diluted--pro forma $0.09 $(0.55) $(0.09)
===== ====== ======
----------------------------------------------------------------------------------------

F-12

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

EARNINGS (LOSS) PER SHARE

Earnings (loss) per share amounts are computed and presented for all periods in
accordance with SFAS No. 128, Earnings per Share.

COMPREHENSIVE INCOME (LOSS)

Pursuant to SFAS No. 130, Reporting Comprehensive Income, the Company is
required to report comprehensive income (loss) and its components in its
financial statements. The Company does not have any significant components of
other comprehensive income (loss) to be reported under SFAS No. 130. Total
comprehensive income (loss) is equal to net income (loss) reported in the
financial statements.

PRODUCT WARRANTY

The Company offers two-year warranties to its customers depending on the
specific product and terms of the customer purchase agreement. The Company's
typical warranties require it to repair and replace defective products during
the warranty period at no cost to the customer. At the time the product revenue
is recognized, the Company records a liability for estimated costs under its
warranties. The costs are estimated based on historical experience. The Company
periodically assesses the adequacy of its recorded liability for product
warranties and adjusts the amount as necessary.

RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------

In July 2002, the FASB issued Statement of Financial Accounting Standards No.
146, "Accounting for Costs Associated with Exit or Disposal Activities,"
("Statement 146"). Statement 146 addresses financial accounting and reporting
for costs associated with exit or disposal activities and nullifies Emerging
Issues Task Force ("EITF") Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)" ("Issue 94-3"). The principal
difference between Statement 146 and Issue 94-3 relates to Statement 146's
requirements for recognition of a liability for a cost associated with an exit
or disposal activity. Statement 146 requires that a liability for a cost
associated with an exit or disposal activity be recognized when the liability is
incurred. Under Issue 94-3, a liability for an exit cost as generally defined in
Issue 94-3 was recognized at the date of an entity's commitment to an exit plan.
A fundamental conclusion reached by the FASB in this Statement is that an
entity's commitment to a plan, by itself, does not create an obligation that
meets the definition of a liability. Therefore, this Statement eliminates the
definition and requirements for recognition of exit costs in Issue 94-3. This
Statement also establishes that fair value is the objective for initial
measurement of the liability. The provisions of this Statement are effective for
exit or disposal activities that are initiated after December 31, 2002. The
adoption of Statement 146 did not have a material impact on the Company's
consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness to Others, an interpretation of FASB Statements No. 5, 57, and 107
and a rescission of FASB Interpretation No. 34. This Interpretation elaborates
on the disclosures to be made by a guarantor in its interim and annual financial

F-13

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

statements about its obligations under guarantees issued. The Interpretation
also clarifies that a guarantor is required to recognize, at inception of a
guarantee, a liability for the fair value of the obligation undertaken. The
initial recognition and measurement provisions of the Interpretation are
applicable to guarantees issued or modified after December 31, 2002. The
adoption of FIN 45 did not have a material impact on the Company's consolidated
financial statements.

In January 2003, the FASB issued FASB Interpretation No. 46 (" FIN 46"),
"Consolidation of Variable Interest Entities." FIN 46 clarifies the application
of Accounting Research Bulletin No. 51, "Consolidated Financial Statements," to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 applies immediately to variable interest
entities created after January 31, 2003, and to variable interest entities in
which an enterprise obtains an interest after that date. On October 9, 2003 the
FASB issued FASB Staff Position No. FIN 46-6, "Effective Date of FASB
Interpretation No. 46, Consolidation of Variable Interest Entities," which
defers the implementation date for public entities that hold an interest in a
variable interest entity or potential variable interest entity from the first
fiscal year or interim period beginning after June 15, 2003 to the end of the
first interim or annual period ending after December 15, 2003. This deferral
applies only if 1) the variable interest entity was created before February 1,
2003 and 2) the public entity has not issued financial statements reporting that
variable interest entity in accordance with FIN 46, other than disclosures
required by paragraph 26 of FIN 46. In December 2003, the FASB issued a revision
to FIN 46 ("FIN 46R"), which clarifies and interprets certain provisions of FIN
46, without changing the basic accounting model of FIN 46. The adoption of FIN
46 and FIN 46R did not have a material impact on the Company's consolidated
financial position, liquidity, or results of operations.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies financial accounting and reporting for derivative instruments embedded
in other contracts and for hedging activities under SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities." It is effective for
contracts entered into or modified after September 30, 2003, except as stated
within the statement, and should be applied prospectively. SFAS No. 149 did not
have a material impact on the Company's consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." SFAS No. 150
establishes standards for how an issuer classifies and measurers in its
statement of financial position certain financial instruments with
characteristics of both liabilities and equity. In accordance with SFAS No. 150,
financial instruments that embody obligations for the issuer are required to be
classified as liabilities. SFAS No. 150 shall be effective for financial
instruments entered into or modified after May 31, 2003, and otherwise shall be
effective at the beginning of the first interim period beginning after June 15,
2003, except for mandatorily redeemable noncontrolling (minority) interests
which on October 29, 2003, the FASB decided to defer indefinitely. The adoption
of SFAS No. 150 did not have a material impact on the Company's consolidated
financial statements.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current year
presentation.

F-14

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

2. RESOLUTION OF GOING CONCERN UNCERTAINTIES

The Company's consolidated financial statements are presented on the going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. For the year ended December 31,
2002, the Company suffered a substantial net loss and was in default of its then
revolving line of credit. These conditions raised substantial doubt at that time
about the Company's ability to continue as a going concern.

During the year ended December 31, 2003, the Company realized net income of
approximately $900, or $0.09 per diluted share, and obtained a new $2.5 million
revolving line of credit with a new lender (see Note 8 Debt). In February 2004,
the new revolving line of credit's credit limit was increased by $1 million to
$3.5 million and the maturity date was extended to January 1, 2005. The Company
is in compliance with all terms, conditions and covenants of its new credit
agreement as of December 31, 2003. Accordingly, the line of credit has been
classified as a long-term liability in the accompanying consolidated balance
sheet at December 31, 2003.

Additionally, the Company brought several new products to market during 2003,
which contributed to increased sales in 2003 compared to 2002. Also,
manufacturing and selling, general and administrative expenses were reduced. The
Company's business plans for 2004 and beyond anticipate that operations will
generate sufficient working capital to enable the Company to continue as a going
concern.

3. INVENTORIES

Inventory, which is presented net of allowance for obsolete and slow moving
inventory, consisted of the following:

DECEMBER 31
2003 2002
-------------------------

Finished goods $3,052 $4,948
Work in process 743 507
Raw materials 1,903 2,407
-------------------------
$5,698 $7,862
=========================

The allowance for obsolete and slow moving inventory is as follows:

YEAR ENDED DECEMBER 31
2003 2002 2001
-----------------------------------------

Balance, beginning of year $2,602 $2,319 $1,978
Charged to cost of sales 200 283 341
-----------------------------------------
$2,802 $2,602 $2,319
=========================================

F-15

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

4. ALLOWANCE FOR DOUBTFUL ACCOUNTS

The allowance for doubtful accounts is composed of the following:

YEAR ENDED DECEMBER 31
2003 2002 2001
---------------------------------

Balance, beginning of year $ 69 $ 1,540 $1,555
Provision for doubtful accounts 17 (26) --
Uncollectible accounts written off (25) (1,445) (15)
---------------------------------
$ 61 $ 69 $1,540
=================================

5. DEBT ISSUANCE COSTS

On March 16, 2000, the Company completed the private placement of $3,250 of
convertible subordinated notes. The debt issuance costs included grants to
Simmonds Capital Limited of 50,000 shares of the Company's stock valued at $163
and warrants to purchase 300,000 shares of the Company's common stock valued at
$409. The warrants have a five-year term and an exercise price of $3.25 per
share. The debt issuance costs, which totaled $817, are being amortized on a
straight-line basis over the life of the notes (5 years). Accumulated
amortization at December 31, 2003 and 2002 was $647 and $476, respectively.

The warrants contain provisions that protect the warrant holders against
dilution should the Company issue shares of common stock at a price less than
the warrants' exercise price then in effect. These provisions provide for an
adjustment in the warrants' exercise price and the number of shares into which
the warrants may be exercised. On two occasions, in March 2002 and August 2003
the Company issued shares of stock at a price below the warrants' exercise price
then in effect. Accordingly, the exercise price of the warrants has been
adjusted to $1.88, which was the effective exercise price as of December 31,
2003.

6. PROPERTY, PLANT AND EQUIPMENT

Property, plant, and equipment as of December 31, 2003, and 2002 includes the
following:

2003 2002
-------------------------

Leasehold improvements $ 109 $ 98
Machinery and equipment 8,861 8,702
Less accumulated depreciation (7,502) (7,008)
-------------------------
Net property, plant and equipment $ 1,468 $1,792
=========================

Depreciation expense for 2003, 2002, and 2001 was $493, $519, and $761,
respectively. During 2002 the Company exercised bargain purchase options

F-16

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

pursuant to certain capital lease agreements. The net book value of the
equipment to which these leases pertained was zero as of December 31, 2002.
Accordingly the original cost of the equipment ($2,202) and its accumulated
depreciation ($2,202) were reclassified from equipment under capital leases to
Property, Plant and Equipment.

7. NOTES RECEIVABLE

In April 2002, we became aware that the purchaser of the Company's former
paper-manufacturing subsidiary, had ceased operations. The purchaser owed the
Company $900 plus accrued interest under the terms of two secured promissory
notes and had defaulted on its obligations to make principal and interest
payments. With guidance from counsel, management evaluated alternatives and took
all prudent actions to maximize the possibility of recovery. However, after a
comprehensive assessment, we believed that the value of purchaser's assets and
the assets of the guarantor were insufficient to provide any recovery of the
amounts due under the notes. Accordingly, the Company wrote-off the amount owed
in the first quarter 2002.

During 2002, the purchaser of the Company's former specialty manufacturing
subsidiary, ceased making payments in accordance with a note receivable. The
original amount of the note was approximately $355. As of December 31, 2002 the
amount due under the note is approximately $175 plus accrued interest. This note
resulted from a 1997 agreement for the sale of the assets of our former
specialty-manufacturing subsidiary. Since its inception, the terms of the
obligation have been restructured several times to accommodate the purchaser.
The last payment was received in March 2002. Attempts during the second and
third quarters of 2002 to contact the purchaser and collect the past-due
installment payments have been unsuccessful. In February 2003, the Company
started legal proceedings to recover the remaining amount due under the note
plus accrued interest. With guidance from counsel, management believes that the
Company will prevail in these proceedings. However, we have been unable to
ascertain the financial position of the purchaser or their ability to pay the
debt. Accordingly, we established a collection allowance in the fourth quarter
2002 for the entire principal amount of the note.

8. DEBT

Long term debt consists of the following:

DECEMBER 31
2003 2002
--------------------

Line of credit (interest rate is Prime Rate plus 2%, the
minimum rate is 6.25%) $ 1,272 $ 1,970
Convertible subordinated note, matures 2004, interest only
payment at 8% per annum through December 31, 2004, at
which time principal is due 3,150 3,150
--------------------
Total debt 4,422 5,120
Less current portion (3,150) (1,970)
Long-term debt $ 1,272 $ 3,150

F-17

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

consisting principally of our trade receivables and inventory. Concurrently with
the refinancing transaction, three funds affiliated with our directors purchased
an aggregate of 500,000 shares of our common stock at $0.60 per share. The
proceeds of the transaction were used to pay off our previous revolving credit
facility and to provide working capital for use in executing our business plans,
including the expansion of our digital product line. The credit agreement
contains certain covenants with which we must comply. As of December 31, 2003 we
were in compliance with all such covenants. As of December 31, 2003 we had
approximately $1.2 million in available unused credit on the facility. In
February 2004, our lender increased the credit facility by $1 million and the
maturity date was extended to January 1, 2005.

The Company issued convertible subordinated notes through a private placement on
March 16, 2000 for $3,250. The amount currently due under the notes totals
$3,150. The notes require interest only payments at 8% per annum through
December 31, 2004, at which time the principal amount becomes due. At the time
of issuance, the notes were convertible into shares of RELM common stock at
$3.25 per share. The notes contain provisions that protect the purchasers of the
notes against dilution should the Company issue shares of common stock at a
price less than the notes' conversion price then in effect. These provisions
provide for an adjustment in the notes' conversion price and the number of
shares into which the notes may be converted. On two occasions, March 22, 2002
and August 29, 2003, the Company issued shares of stock at a price below the
notes' conversion price then in effect. Accordingly, the conversion price of the
notes has been adjusted to $1.88, which was the effective conversion price as of
December 31, 2003.

9. LEASES

The Company leases its facility in West Melbourne, Florida under a long-term
operating lease, which expires on June 30, 2005. In May 2002, the Company leased
a 3.8 thousand square feet of office space in Lawrence, Kansas, to accommodate
the expansion of its digital engineering team. This lease expires on April 30,
2005. At December 31, 2003, the future minimum lease payments for operating
leases are as follows: $435 in 2004 and $213 in 2005.

Total rental expense for 2003, 2002, and 2001 were $417, $398, and $375,
respectively.

10. INCOME TAXES

A reconciliation of the statutory United States income tax rate to the effective
income tax rate follows:

2003 2002 2001
------------------------------------------

Statutory U.S. income tax rate 34.00% (34.00)% 34.00%
States taxes, net of federal benefit 3.63% (3.63)% 4.35%
Permanent differences 0.90% 0.21% 6.77%
Change in valuation allowance (140.95)% 62.19% (15.09)%
Change in net operating loss
carryforwards and tax credits 73.03% -- --
Other 30.88% (24.77)% (30.03)%
------------------------------------------
Effective income tax rate 1.49% 0.00% 0.00%
==========================================

F-18

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

The components of the deferred income tax assets (liabilities) are as follows:

DECEMBER 31
2003 2002
----------------------
Deferred tax assets:
Operating loss carryforwards $ 12,028 $ 13,174
Tax credits 65 129
Section 263A costs 129 195

Asset reserves:
Bad debts 36 96
Inventory reserve 1,054 979
Accrued expenses:
Compensation 89 103
Accrued settlement 53 --
All other 33 24
----------------------
Total deferred tax assets 13,487 14,700

Deferred tax liabilities:
Depreciation (316) (286)
----------------------
Total deferred tax liabilities (316) (286)
----------------------
Subtotal 13,171 14,414

Valuation allowance (13,171) (14,414)
----------------------
Net deferred tax assets (liabilities) $ -- $ --
======================

For tax purposes, the Company, at December 31, 2003, has federal and state net
operating loss carryforwards of approximately $33,506 and 17,524, respectively.
These net operating loss carryforwards begin to expire, for federal and state
purposes, in 2010. During 2003 and 2002 the Company utilized $1,056 and $0,
respectively, of its net operating loss carryforwards.

In accordance with SFAS Statement No. 109, Accounting for Income Taxes,
valuation allowances are provided against deferred tax assets if, based on the
weight of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. The Company has evaluated the
realizability of the deferred tax assets on its consolidated balance sheet and
does not believe it has met the more likely than not criteria; therefore the
Company has established a valuation allowance in the amount of $13,171 against
its net deferred tax assets at December 31, 2003.

F-19

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

The decrease in the total valuation allowance for the year ended December 31,
2003 was $1,243 and relates to the Company's expectations regarding utilization
of its net deferred tax assets, including available net operating loss and tax
credit carryforwards. The increase in the total valuation allowance for the year
ended December 31, 2002 was $2,195 and relates primarily to an increase in
available net operating loss carryforwards as a result of the Company's net loss
during 2002.

For the year ended December 31, 2003, the Company incurred $13 in alternative
minimum tax expense in connection with the federal limitation on alternative tax
net operating loss carryforwards.

The federal and state net operating loss and tax credit carryforwards could be
subject to limitation if, within any three year period prior to the expiration
of the applicable carryforward period, there is a greater than 50% change in
ownership of the Company.

11. INCOME (LOSS) PER SHARE

The following table sets the computation of basic and diluted loss per share:

YEAR ENDED DECEMBER 31
2003 2002 2001
------------------------------------------

Numerator:
Net income (loss) (numerator for basic and diluted
earnings (loss) per share) $ 868 $ (3,631) $ 122

Denominator:
Denominator for basic earnings per share-weighted
average shares 9,001,660 7,787,230 5,346,174
Denominator for diluted earnings per share-weighted
average shares 9,172,650 7,787,230 5,383,452
Basic income (loss) per share $ 0.10 $ (0.47) $ 0.02
------------------------------------------
Diluted income (loss) per share $ 0.09 $ (0.47) $ 0.02
==========================================

A total of 1,675,531 shares related to convertible debt are not included in the
computation of earnings per share for 2003; and a total of 7,295,968 shares
related to options and warrants and convertible debt are not included in the
computation of loss per share for 2002 because to do so would have been
anti-dilutive for these periods.

12. STOCK OPTION AND OTHER STOCK OPTION PLANS

The Company has two plans whereby eligible officers, directors and employees can
be granted options for the future purchase of Company common stock at the market
price on the grant date. The options, if not exercised within five-year or
ten-year periods, expire.

F-20

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

The following table summarizes information about fixed stock options outstanding
at December 31, 2003:

SHARES OPTION WEIGHTED AVERAGE
UNDER OPTION PRICE PER SHARE EXERCISE PRICE
-----------------------------------------------

Balance at December 31, 2000 959,666 $0.406-4.06 2.40
Options granted 527,500 0.99-1.10 1.06
Options expired or terminated (78,666) 2.56-4.00 2.88
-----------------------------------------------
Balance at December 31, 2001 1,408,500 0.406-4.06 1.84
Options granted 90,000 0.61-1.10 0.94
Options expired or terminated (80,000) 1.00-4.06 2.36
-----------------------------------------------
Balance at December 31, 2002 1,418,500 0.61-3.06 1.76
Options granted 125,000 0.26-1.14 0.41
Options exercised (32,500) 0.406-1.00 0.54
Options expired or terminated (147,000) 1.00-3.06 2.23
-----------------------------------------------
Balance at December 31, 2003 1,364,000 $0.26-$3.06 $ 1.67
===============================================

Exercisable at December 31, 2003 1,234,250 $0.26-$3.06 $ 1.71
===============================================

At December 31, 2003, 336,000 unissued options were available under the two
plans.

The weighted average contractual life of stock options outstanding as of
December 31, 2003, 2002, and 2001 was 7, 7.3, and 8 years, respectively.
Generally, employee options have a 10-year life and vest over a 4-year period
from grant date. Director options have a five-year life and vest in eleven
months from the grant date.

At December 31, 2003, 1,364,000 shares of common stock were reserved for
issuance under outstanding options and 336,000 shares of common stock were
reserved for the granting of additional options. In addition, 4,552,892 shares
of common stock were reserved for issuance under warrants and 1,675,531 shares
of common stock were reserved for issuance under convertible debt instruments.

The weighted average fair value of options granted during the years ended
December 31, 2003, 2002 and 2001 was $0.26, $0.62 and $0.74 respectively, using
the Black-Scholes option- pricing method. The following weighted-average
assumptions were utilized:

YEAR ENDED DECEMBER 31
2003 2002 2001
--------------------------
Black Scholes Pricing Assumptions:
Expected volatility 99.3% 49.6% 96.7%
Risk free interest rate 2.3% 3.0% 4.3%
Expected dividends None None None
Expected life in years 4 4 4

F-21

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

13. EQUITY

On March 22, 2002, the Company closed a public rights offering. The purpose of
the offering was to provide working capital, which among other things, will be
utilized to speed the development of the Company's new APCO Project 25-compliant
digital products and capabilities. The securities offered were "units"priced at
$.90 per unit. A unit was comprised of one share of RELM common stock and one
warrant to purchase one share of RELM common stock, exercisable at $1.08 per
share at any time on or after February 12, 2003 and until February 11, 2006. The
exercise price of the warrants has been reduced to $1.05 per share as a result
of the issuance of common stock related to the company's new credit facility and
anti-dilution provisions contained in the warrants. Units were offered initially
to RELM's equity holders in the form of a rights offering. The "right" allowed
investors in the offering to purchase units at a 10% discount to the market
price of a share of common stock.

Noble was engaged as the standby underwriter for this offering. The units were
offered to the public pursuant to a registration statement that was declared
effective by the Securities and Exchange Commission (SEC) on February 11, 2002.
The offering resulted in the sale of 2,775,000 shares of common stock and
warrants to purchase 2,775,000 shares of common stock. The offering generated
$1,695 in net proceeds. On May 17, 2002, Noble exercised its option to purchase
416,250 additional units at a purchase price of $0.90 per unit to cover
over-allotments. The Company received approximately $326 in net proceeds from
the purchase of these additional units.

The exercise price of the common stock purchase warrants has been reduced to a
share rice of $1.05 from $1.08 as a result of the issuance of common stock
related to the Company's new credit facility and anti-dilution provisions
contained in the warrants. Additionally, the Company may call the common stock
purchase warrants at $0.10 each when the market price of the Company's common
stock exceeds 150% of the exercise price($1.575) for 20 consecutive trading
days. The price of the Company's common stock currently meets this criteria and
the Company can call the common stock purchase warrants if we elect to do so. If
all the common stock purchase warrants are exercised, the Company will receive
net proceeds of approximately $3.2 million. As of March 12, 2004, 376,611 shares
of common stock had been issued as a result of the exercise of common stock
purchase warrants, generating approximately $376,000 in net proceeds.

In August 2003, the Company established a revolving line of credit with a new
lender. Concurrent with the transaction, three funds affiliated with the Company
directly purchased an aggregate of 500,000 shares of our common stock at $0.60
per share, which was the closing market price on the date the transaction was
approved.

In 2003, a total of 32,500 shares of the Company's common stock were issued as a
result of the exercise of employee stock options.

The Company had no shares of its $1.00 par value preferred stock issued as of
December 31, 2003 and 2002.

F-22

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

14. SIGNIFICANT CUSTOMERS

Sales to the United States government and to foreign markets as a percentage of
the Company's total sales were as follows for the year ended December 31:

2003 2002 2001
---------------------------------------

U.S. Government 50% 39% 44%
Foreign markets 6% 6% 4%

Sales to the United States Government represented approximately 50%, 39% and 44%
of our total sales for the years ended December 31, 2003 and 2002, and 2001,
respectively. These sales were primarily to the USFS, DOI and the CECOM. Sales
to the USFS represented approximately 27%, 22%, and 34% of total sales for the
years ended December 31, 2003, 2002, and 2001, respectively. For the year ended
December 31, 2003, sales to the DOI represented approximately 12% of total
sales. For the year ended December 31, 2003 and 2002 we had no sales to CECOM
because our contract expired in 2001. However, sales to CECOM for the years
ended December 31, 2001 represented approximately 10% of total sales.

In 1998, the Company was awarded portions of the USFS contract. This contract
expired in September 2001. Earlier in 2001, bids for a new contract were
solicited, and the Company was awarded the contract for portable radios and base
stations. The contract was for a period of one year with options for three
additional years, and did not specify a minimum purchase. In December 2002, the
Company was awarded a new contract with similar terms. It continues to include
the portable radios and repeaters that were on the previous contract.
Additionally, it includes the Company's GMH mobile radio that was not on the
previous contract. The new contract is for one year with two additional option
years.

In 1996, the Company was awarded a contract to provide land mobile radios to
CECOM. This contract was for a term of five years with no specified minimum
purchase requirement. The contract expired in 2001.

15. PENSION PLANS

The Company sponsors a participant contributory retirement (401K) plan, which is
available to all employees. The Company's contribution to the plan is either a
percentage of the participants salary (50% of the participants contribution up
to a maximum of 6%) or a discretionary amount. In 2003 the Company elected to
not contribute to the participants' retirement plan. In 2002 and 2001 total
contributions made by the Company were $78 and $69, respectively.

16. COMMITMENTS AND CONTINGENCIES

ROYALTY COMMITMENT

In 2002, the Company has entered into a technology license related to its
development of digital products. Under this agreement, the Company is obligated

F-23

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

to pay a royalty for each product sold that utilizes the technology covered by
this agreement. The Company paid $6 and $0 in 2003 and 2002, respectively. The
agreement has an indefinite term, and can be terminated by either party under
certain conditions.

LIABILITY FOR PRODUCT WARRANTIES

Changes in the Company's liability for product warranties during the years ended
December 31, 2003 and 2002 are as follows:

Balance at Warranties Warranties Balance at
Beginning Issued Settled End
of year of year
-------------------------------------------------------
2003 $ 103 38 (59) $82

2002 $ 79 103 (79) $103

LEGAL PROCEEDINGS

In 1993, a civil action was brought against us by a plaintiff to recover losses
sustained on the note of a former affiliate totaling $1.7 million plus interest
at 12% per annum. The plaintiff alleged violations of federal security and other
laws by us in collateral arrangements with the former affiliate. In February
1994, the liquidator of the former affiliate filed a complaint claiming that
intentional and negligent conduct by us and others caused the former affiliate
to suffer millions of dollars of losses leading to its ultimate failure. In
response, we filed motions for summary judgment to dismiss those complaints. On
September 12, 2002, the Court granted in significant part the motions for
summary judgment filed by us and one of our directors. The lone remaining claim
sought damages against us for non-payment of the note. We contended that this
note was canceled and released for fair consideration in 1993 and that there was
no basis in law or fact for the liquidator's claim. On March 1, 2004, we reached
a settlement agreement. Under the terms of the settlement, we will pay to the
plaintiff cash totaling $120,000 and issue 6,452 shares of restricted RELM
common stock valued at the closing price on March 1, 2004. Consequently, we
recognized a one-time charge of $140,000 in the fourth quarter 2003. The
settlement is subject to the execution by both parties of a written agreement
and release.

In February 12, 1999, we initiated collection and legal proceedings in Sao
Paulo, Brazil, against its Brazilian dealer, Chatral, for failure to pay for
product shipments totaling $1.4 million which has been fully reserved in a prior
year. In April 2001, the Brazilian court ordered us to post security with the
court totaling approximately $300 in the form of cash or a bond in order for the
case to proceed. We elected not to post security. Consequently, the case was
involuntarily dismissed. On December 8, 1999, Chatral filed a counter claim
against us alleging damages totaling $8 million as a result of our
discontinuation of shipments to Chatral. On September 11, 2002 we agreed to a
joint stipulation of dismissal under which all claims between the parties were
released.

F-24

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

On December 20, 2000, a products liability lawsuit was filed in Los Angeles
Superior Court in Los Angeles, California. Although the Company was not named in
the suit, one of the defendants had purchased all or substantially all of the
assets of a RELM affiliate. As part of the asset sale, the asset purchase
agreement contained indemnification provisions, which could result in liability
for us. On October 23, 2001, the purchaser of the assets of our former affiliate
served us with a claim for indemnification under a provision of the asset
purchase agreement. In June 2002, we were released from this matter.

In June 1997, substantially all of the assets of a RELM specialty-manufacturing
subsidiary were sold. The asset purchase agreement contains indemnification
provisions, which could result in liability for both parties. Presently, one
indemnification claim is pending against us. On November 19, 2001, a products
liability lawsuit was filed in the 353rd Judicial District Court of Travis
County, Texas. On August 26, 2002, a products liability lawsuit was filed in the
Probate Court of Galveston County, Texas. RELM Wireless Corporation, RELM
Communications, Incorporated, and the purchaser of the assets of our former
specialty-manufacturing subsidiary are named defendants in these lawsuits. We
have insurance coverage for these matters. The initial case was settled in
February 2004 by the insurance companies involved, including ours. We did not
incur any costs or liabilities related to the settlement. Counsel for our
insurer is continuing to vigorously defend the remaining claim. Counsel believes
we have meritorious defenses and the likelihood of an unfavorable outcome is
remote.

During 2002, the purchaser of the assets of our former specialty-manufacturing
subsidiary ceased making payments in accordance with a note receivable. The
initial amount of the note was approximately $355. Presently, the amount due
under the note is approximately $175,000 plus accrued interest. This note is
derived from the 1997 agreement for the sale of the assets of our
specialty-manufacturing subsidiary. Since its inception, the terms of the
obligation have been restructured several times to accommodate the purchaser.
The last payment was received in March 2002. Attempts to contact the purchaser
and collect the past-due installment payments have been unsuccessful. In
February 2003, we started legal proceedings to recover the remaining amount due
under the note plus accrued interest. With guidance from counsel, we believe
that we will prevail in these proceedings. However, we have been unable to
ascertain the financial position of the purchaser or their ability to pay the
debt. Accordingly, we have maintained the valuation reserve for the entire
principal amount ($175) of the note that was established in 2002.

In April 2002, we learned that the purchaser of the assets of our former
paper-manufacturing subsidiary had ceased operations. The purchaser owes us $900
plus accrued interest under the terms of two secured promissory notes, and has
defaulted on its obligations to make principal and interest payments. The Chief

F-25

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

Executive Officer of the purchaser personally guaranteed the debt. Our security
interest is subordinated to the security interest granted to the purchaser's
senior lender. In connection with the sale of the subsidiary in 1997, we took
back a secured promissory note from the purchaser in the initial aggregate
principal amount of $2.4 million. In December 2000, the terms of the original
promissory note were modified and we received a principal payment of $700 plus
accrued interest of approximately $166. After this payment, the remaining
principal amount due on the original note was $900. Also, as part of the
modification agreement, the original note was replaced by two secured promissory
notes, one in the principal amount of $600 and the other in the principal amount
of $300. The $600 note was payable in ten annual installments starting on April
2, 2002. The $300 note was payable in five annual installments starting on
January 1, 2003. Interest on both notes accrued at 2.75% over the prime rate and
was payable, in the case of the $600 note, in annual installments, and, in the
case of the $300 note, in semi-annual installments. The $600 note was subject to
a standby creditor's agreement under which principal and interest payments on
the note were contingent upon the purchaser achieving a certain debt service
coverage ratio and the absence of any uncured defaults on other loans or
agreements of the purchaser. As security for both notes, the purchaser has
granted to us a lien and security interest in certain collateral. Our security
interest, however, is subordinated to the security interest granted to the
purchaser's senior lender. In addition, the Company was subject to a standstill
agreement with the senior lender. A principal of the purchaser guaranteed the
prompt and complete payment of both notes when due. Both notes were subject to
forbearance fee payment agreements with both the purchaser and the guarantor
under which additional amounts may be payable to us if there is a merger, sale
or change of control of the purchaser and if the notes are not paid in full by
certain dates. In December 2002, the purchaser's senior lender notified us that
they had sold the purchaser's assets for $200. This amount was not sufficient to
provide any recovery of amounts owed to us under the notes. In February 2003,
with the assistance of counsel, we initiated legal proceedings against the
guarantor. In October, 2003 we were awarded a judgment against the guarantor in
the amount of $1.0 million. We have not been able to ascertain the financial
position of the guarantor or evaluate his ability to pay the debt. Accordingly,
we have maintained the valuation reserve for the entire principal amount ($900)
of the two promissory notes that was established in the first quarter 2002.

In addition, the Company is involved in various claims and legal actions arising
in the ordinary course of its business. It is the opinion of management that the
ultimate disposition of these matters would not have a material effect upon the
Company's consolidated financial position or results of operations.

F-26

RELM Wireless Corporation
December 31, 2003
Notes to Consolidated Financial Statements (continued)
(in Thousands, Except Share Data and Percentages)

17. QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected quarterly financial data is summarized below:

QUARTERS ENDED
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
2003 2003 2003 2003
------------------------------------------------------

FISCAL 2003
Sales $3,596 $5,231 $5,000 $5,901
Gross profit 1,077 1,765 1,991 2,783
Net income (loss) (377) 122 291 832
Earnings (loss) per share-basic (0.04) 0.01 0.03 0.09
Earning (loss) per share-diluted (0.04) 0.01 0.03 0.08

QUARTERS ENDED
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
2002 2002 2002 2002
------------------------------------------------------

FISCAL 2002
Sales $4,733 $4,950 $3,979 $2,316
Gross profit 1,355 1,538 1,157 168
Net income (loss) (1,016) 3 (395) (2,223)
Earnings (loss) per share-basic (0.18) 0.00 (0.05) (0.26)
Earnings (loss) per share-diluted (0.18) 0.00 (0.05) (0.26)

In the fourth quarter 2003, we recognized an expense totaling $140 related to
the settlement of a legal matter discussed in Note 16, Commitments and
Contingencies.

In the fourth quarter 2002, the Company recorded adjustments that increased its
net loss by approximately $984 to reflect, (i) the adjustment of inventories for
slower moving items ($283), (ii) the provision for an uncollectible note
receivable from the purchaser of the Company's former specialty-manufacturing
subsidiary ($175), (iii) the write-off of the remaining book value of a
technology agreement ($211), (iv) the write-off of the remaining book value of
an investment banking agreement ($120), and (v) severance and other costs
pertaining the reorganization of the Company's sales and marketing efforts
($195).

Additionally, sales for the fourth quarter of 2002 declined by $3.4 million
(59.2%) compared to the same period in the prior year. Consequently, the Company
was unable to absorb manufacturing overhead or cover other fixed costs ($1,240).

F-27

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

RELM
WIRELESS CORPORATION

2,982,859 SHARES OF

COMMON STOCK

UNDERLYING COMMON STOCK PURCHASE WARRANTS

======================================
PROSPECTUS
======================================

____________, 2004

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

We have not authorized any dealer, sales representative or any other
person to give any information or to make any representations not contained in
this prospectus or the accompanying letter of transmittal. This prospectus and
the accompanying letter of transmittal do not offer to sell or buy any
securities in any jurisdiction where it is unlawful.

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

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses and costs expected
to be incurred in connection with the issuance and distribution of the
securities to be registered. All of the amounts shown are estimated except for
the Securities and Exchange Commission registration fee, which was previously
paid.

Printing expenses ........................................ 15,000.00
Legal fees and expenses .................................. 40,000.00
Accounting fees and expenses ............................. 15,000.00
Miscellaneous expenses ................................... 5,000.00
-------------
Total .................................................... $ 75,000.00
=============

ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS

Our officers and directors are indemnified as provided under the Nevada
Revised Statutes and our articles of incorporation and bylaws.

Unless specifically limited by a corporation's articles of
incorporation, the Nevada Revised Statutes automatically provides directors with
immunity from monetary liabilities. Our articles of incorporation do not limit
the automatic immunity provided by the Nevada Revised Statutes. Excepted from
this immunity are: (i) a willful failure to deal fairly with the corporation or
its shareholders in connection with a matter in which the director has a
material conflict of interest; (ii) a violation of criminal law unless the
director had reasonable cause to believe that his or her conduct was lawful or
no reasonable cause to believe that his or her conduct was unlawful; (iii) a
transaction from which the director derived an improper personal profit; and
(iv) willful misconduct.

Our articles of incorporation provide that we will indemnify, to the
fullest extent permitted by Nevada law, all persons whom we have the power to
indemnify under Nevada law, and that such indemnification shall not be the
exclusive indemnification available to such persons.

Our bylaws provide that we will indemnify each of our directors and
officers if he or she acted in good faith and in a manner he reasonably believed
to be in, or not opposed to, our best interest and, with respect to any criminal
proceedings, had no reasonable cause to believe his or her conduct was unlawful.
In addition, we will indemnify our directors and officers in any action by or in
the right of the corporation if he or she acted in good faith and in a manner he
or she reasonably believed to be in, or not opposed to, our best interest;
provided, that no indemnification shall be made in respect of a claim as to
which the person has been adjudged to be liable to us unless and only to the
extent that a court of competent jurisdiction determines that, despite the
adjudication of liability but in view of the circumstances of the case, the
person is fairly and reasonably entitled to indemnity for the expenses that such
court deems proper.

Our bylaws provide that no indemnification shall be provided by us to
any person, unless it is determined that indemnification is proper because the
person has met the applicable standard of conduct. Such determination shall be
made:

- a majority vote of a quorum of the Board of Directors
consisting of directors who are not parties to the action or
proceeding, or

II-1

- if such quorum is not obtainable, or if obtainable and a
majority vote of a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or

- by the shareholders, or

- in such other manner, if any, as shall be permitted under
Nevada law.

Our bylaws provide that expenses incurred in defending any action or
proceeding to which indemnification may be available may be advanced by us upon
receipt of any undertaking by or on behalf of the person claiming
indemnification to repay these amounts if it should be determined ultimately
that he is not entitled to be indemnified by us.

In addition, our articles of incorporation eliminate the personal
liability of our directors to the fullest extent permitted by Nevada law, as the
same may be amended and supplemented.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted for our directors, officers and controlling persons, we
have been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy and is, therefore, unenforceable.
We intend to enter into indemnity agreements with each of our directors and
executive officers to give them additional contractual assurances regarding the
scope of the indemnification described above and to provide additional
procedural protections. In addition, we have obtained directors' and officers'
insurance providing indemnification for our directors, officers and certain
employees for certain liabilities. We believe that these indemnification
provisions and agreements are necessary to attract and retain qualified
directors and officers. The limitation of liability and indemnification
provisions in our articles of incorporation and bylaws may discourage
shareholders from bringing a lawsuit against directors for breach of their
fiduciary duty. They may also reduce the likelihood of derivative litigation
against directors and officers, even though such an action, if successful, might
otherwise benefit our shareholders and us. Furthermore, a stockholder's
investment may be adversely affected to the extent we pay the costs of
settlement and damage awards against directors and officers under these
indemnification provisions.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

In a private sale completed August 2003, we issued 500,000 shares of
our common stock to three funds affiliated with our directors for a purchase
price of $0.60 per share. The proceeds from the sale were used to help pay off
our then existing credit facility with Fleet Capital Corporation and provide
working capital to be used in executing our business plans, including the
expansion of our digital product line.

The foregoing transaction did not involve a public offering. All sales
were made in reliance on Section 4(2) of the Securities Act and/or Regulation D
promulgated under the Securities Act. These sales were made without general
solicitation or advertising. The recipients in such transaction represented
their intention to acquire the securities for investment only and not with a
view to sell or for sale in connection with any distribution thereof. All
recipients had adequate access, through their relationship with us, to
information about us.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

Exhibit
Number Description
------ -----------

3.1 Articles of Incorporation (2)
3.2 Certificate of Amendment to Articles of Incorporation (8)
3.3 Bylaws (2)
4.1 8% Convertible Subordinate Promissory Note(4)
4.2 Warrant Agreement between Relm Wireless Corporation and Janney Montgomery Scott LLC dated May 12,
2000 (10)
4.3 Warrant Certificate No. W-100 issued to Janney Montgomery Scott LLC dated May 12, 2000 (10)

II-2

4.4 Warrant Agreement between Relm Wireless Corporation and Simmonds Capital Limited day
May 12, 2000 (10)
4.5 Warrant Certificate No. W-100 issued to Simmonds Capital Limited dated May 12, 2000 (10)
4.6 Warrant Agreement between Relm Wireless Corporation and American
Stock Transfer and Trust Company, dated February ___, 2002 (**)
4.7 Form of Warrant Certificate **
5.1 Opinion of Greenberg Traurig, P.A.*
10.1 1996 Stock Option Plan for Non-Employee Directors (1)
10.2 1997 Stock Option Plan (2)
10.3 1997 Stock Option Plan, as amended (3)
10.4 Security and Loan Agreement (12)
10.5 Loan Modification Agreement(13)
10.6 Simmonds Agreement(4)
10.7 Contract for Sale of West Melbourne Fl. Real Estate(5)
10.8 Sub Lease Agreement(4)
10.9 Uniden Asset Purchase Agreement(5)
10.10 OEM Uniden Manufacturing Agreement(5)
10.11 Uniden ESAS Technology Agreement(5)
10.12 Manufacturing Agreement(8)
10.13 Transaction Agreement for Real Estate Sale and Contract Manufacturing(5)
14.1 Code of Ethics (11)
16.1 Letter to the Commission regarding change in certifying accountants(9)
21.1 Subsidiaries of Registrant(9)
23.1 Consent of Ernst & Young LLP*
23.2 Consent of BDO Seidman LLP*
23.3 Consent of Greenberg Traurig, P.A. (contained in legal opinion filed as Exhibit 5.1)*
24.1 Power of Attorney (included on signature page)*
------------------

(1) Incorporated by reference from the Adage, Inc. (predecessor to Relm
Wireless Corporation) report on form 10-K for the year ended December
31, 1996.

(2) Incorporated by reference from the Company's report on form 10-K for
the year ended December 31, 1997.

(3) Incorporated by reference from the Company's report on form 10-K for
the year ended December 31, 1998.

(4) Incorporated by reference from the Company's report on form 10-K for
the year ended December 31, 1999.

(5) Incorporated by reference from the Company's report on form 10-K/A-1
for the year ended December 31, 1999, filed April 12, 2000.

(6) Incorporated by reference from the Company's report on form 8-K dated
December 22, 2000.

(7) Incorporated by reference from the Company's report on form 10-K for
the year ended December 31, 2000.

(8) Incorporated by reference from the Company's report on form 10-Q for
the quarter ended September 30, 2001 dated November 1, 2001.

(9) Incorporated by reference from the Company's report on form 8-K dated
December 6, 2002, filed on December 6, 2002.

(10) Incorporated by reference from the Company's Form S-1, June 7, 2000
(File No. 333-38718).

(11) Incorporated by reference from the Company's Annual Report on Form 10-K
for the year ended December 31, 2002.

(12) Incorporated by reference from the Company's Report on Form 8-K filed
on September 3, 2003.

(13) Incorporated by reference from the Company's report on Form 8-K filed
on February 27, 2004.

* Filed herewith.

II-3

** Previously filed.

(b) Financial Statement Schedules:

No financial statement schedules are filed because the required
information is not applicable or is included in the consolidated financial
statements or related notes.

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:

(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement.

(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 14 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, Relm
Wireless Corporation has duly caused this Post-Effective Amendment No. 2 to this
Registration Statement to be signed on its behalf by the undersigned, hereunto
duly authorized, in the City of West Melbourne, State of Florida, on April 12,
2004.

RELM WIRELESS CORPORATION

By: /s/ David P. Storey
------------------------------------
David P. Storey
President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints David P. Storey and William P.
Kelly, and each of them, his true and lawful attorney(s)-in-fact, each acting
alone, with full powers of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any or all further
amendments, including any post-effective amendments, to this Registration
Statement, and to file the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that said attorneys-in-fact or their substitutes,
each acting alone, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE
--------- ----- ----

/s/ George N. Benjamin, III Chairman of the Board April 12, 2004
-----------------------------------------------
George N. Benjamin, III
/s/ David P. Storey President and Chief Executive Officer April 12, 2004
-----------------------------------------------
David P. Storey (Principal Executive Officer) and
Director

/s/ William P. Kelly Executive Vice President - Chief April 12, 2004
-----------------------------------------------
William P. Kelly Financial Officer (Principal Financial
and Accounting Officer)

/s/ Ralph Whitney, Jr. Director April 12, 2004
-----------------------------------------------
Ralph Whitney, Jr.

/s/ James C. Gale Director April 12, 2004
-----------------------------------------------
James C. Gale

/s/ Donald F.U. Goebert Director April 12, 2004
-----------------------------------------------
Donald F.U. Goebert

/s/ Randolph K. Piechocki Director April 12, 2004
-----------------------------------------------
Randolph K. Piechocki

II-5

INDEX TO EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
------ -----------
5.1 Opinion of Greenberg Traurig, P.A.
23.1 Consent of Ernst & Young LLP
23.2 Consent of BDO Seidman, LLP
23.3 Consent of Greenberg Traurig, P.A. (contained in Exhibit 5.1)