8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (date of earliest event reported):  May 9, 2007

TERABEAM, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-29053	04-2751645
(State or other jurisdiction of incorporation)	(Commission file number)	(IRS employer identification no.)

2115 O’Nel Drive, San Jose, CA	95131
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (408) 731-2700

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Condition.

On May 9, 2007, Terabeam, Inc. issued a press release announcing financial results for its first quarter ended March 31, 2007.  A copy of that press release is attached hereto as Exhibit 99.1.

Item 9.01  Financial Statements and Exhibits.

(c) Exhibits

See Exhibit Index.

SIGNATURE

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

	TERABEAM, INC.
Dated: May 9, 2007	By:	/s/ David L. Renauld
		David L. Renauld
		Vice President

EXHIBIT INDEX

Number	Title
99.1	Press release dated May 9, 2007.

2

EX-99.1

For Further Information Contact:

David Renauld

Vice President, Corporate Affairs

(413) 584-1425

FOR IMMEDIATE RELEASE

TERABEAM ANNOUNCES FIRST QUARTER 2007 FINANCIAL RESULTS

San Jose, CA, May 9, 2007– Terabeam, Inc. (NASDAQ:TRBM), a global pioneer and leading developer and supplier of Mesh, WiMAX, Wi-Fi and Millimeter Wave wireless products and solutions, today announced its financial results for the first quarter ended March 31, 2007.

Revenue for the quarter ended March 31, 2007 was $17.7 million, a decrease of approximately 3% from the revenue of $18.2 million for the quarter ended December 31, 2006 and a decrease of approximately 4% from the revenue of $18.5 million for the quarter ended March 31, 2006.

The net loss for the quarter ended March 31, 2007 was $3.0 million ($0.14 per share-diluted) compared to net loss of $2.0 million ($0.09 per share-diluted) for the quarter ended December 31, 2006 and net loss of $4.5 million ($0.21 per share-diluted) for the quarter ended March 31, 2006.

Robert Fitzgerald, Terabeam’s Chief Executive Officer, stated “We are pleased with the continued stabilization we experienced in the first quarter of 2007.  We believe our results for the first quarter, which is typically our weakest quarter, together with our new products and momentum we are seeing in the marketplace, position us well for the rest of 2007.”

Conference Call Information

Terabeam will host a conference call to discuss this release, financial results, developments at the company, and other matters of interest to investors and others today, May 9, 2007 starting at 5:00 p.m. Eastern Time.  The discussion may include forward-looking information.

To participate in this conference call, please dial 800-231-9012 (or 719-457-2617 for international callers), confirmation code 4359680 for all callers, atleast ten minutes before start time.  The conference call will also be broadcast live over the Internet.  Investors and others are invited to visit Terabeam’s website at http://www.terabeam.com to access this broadcast.  Replays will be available telephonically for approximately one week by dialing 888-203-1112 for domestic callers and 719-457-0820 for international callers, confirmation code 4359680 for all callers, and over the Internet for approximately 90 days at Terabeam’s website at http://www.terabeam.com.

Terabeam Announces First Quarter 2007 Financial Results

May 9, 2007

Page 2

About Terabeam

Terabeam, Inc. has two primary subsidiaries Proxim Wireless Corporation and Ricochet Networks, Inc.  Proxim Wireless Corporation is a global leader in providing WiMAX, Wi-Fi, and other broadband wireless solutions to meet the performance, scalability, and security requirements of enterprises, government, and service providers.  Ricochet Networks, Inc. is a leading portable Wireless Internet Service Provider (WISP) with operational markets in Denver, Colorado and San Diego, California.  Additional information about the company can be found at the company's website located at http://www.terabeam.com or by contacting the company by telephone at 413-584-1425 or by email at IR@terabeam.com.

Safe Harbor Statement

Statements in this press release that are not statements of historical facts are forward-looking statements that involve risks, uncertainties, and assumptions.  Terabeam’s actual results may differ materially from the results anticipated in these forward-looking statements.  The forward-looking statements involve risks and uncertainties that could contribute to such differences including those relating to and arising from the ongoing uncertainty in the telecommunications industry and larger economy; the intense competition in our industries and resulting impacts on our pricing, gross margins, and general financial performance; time and costs associated with developing and launching new products; uncertainty about market acceptance of products we introduce; potential long sales cycles for new products such that there may be extended periods of time before new products contribute positively to our financial results; decisions we may make to delay or discontinue efforts to develop and introduce certain new products; time, costs, political considerations, typical multitude of constituencies, and other factors involved in evaluating, equipping, installing, and operating municipal networks; difficulties or delays in developing and supplying new products with the contemplated or desired features, performance, compliances, certifications, cost, price, and other characteristics and at the times and in the quantities contemplated or desired; the difficulties in predicting Terabeam’s future financial performance; and the impacts and effects of any other strategic transactions Terabeam may evaluate or consummate.  Further information on these and other factors that could affect Terabeam’s actual results is and will be included in filings made by Terabeam from time to time with the Securities and Exchange Commission and in its other public statements.

- Financial Tables Follow -

Terabeam Announces First Quarter 2007 Financial Results

May 9, 2007

Page 3

TERABEAM, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
	March 31,			December 31,
	2007			2006
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	7,912		$	10,290
Investment securities – available-for-sale		201			168
Accounts receivable, net		6,814			5,539
Inventory		9,301			10,142
Prepaid expenses		1,602			1,246
Total current assets		25,830			27,385
Property and equipment, net		2,563			2,660
Other Assets:
Restricted cash		76			76
Goodwill		7,922			7,922
Intangible assets, net		11,012			11,545
Deposits and prepaid expenses		297			287
Total other assets		19,307			19,830
Total assets	$	47,700		$	49,875
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	13,830		$	13,887
Deferred revenue		2,767			2,198
License agreement payable - current maturities		879			868
Total current liabilities		17,476			16,953
License agreement payable, net of current maturities		1,864			2,088
Total liabilities		19,340			19,041
Commitments and contingencies
Stockholders’ Equity		-			-
Preferred stock, $0.01 par value; authorized 4,500,000, none issued at March 31, 2006 and December 31, 2005		-			-
Common stock, $0.01 par value, 100,000,000 shares authorized, 21,540,865 issued and outstanding at March 31, 2006 and 21,446,217 issued and outstanding at December 31, 2005		216			216
Additional paid-in capital		58,454			57,976
Retained earnings  (accumulated deficit)		(30,271	)		(27,285	)
Treasury stock		-			-
Accumulated other comprehensive income:
Net unrealized gain (loss) on available-for-sale securities		(39	)		(73	)
Total stockholders’ equity		28,360			30,834
Total liabilities and stockholders’ equity	$	47,700		$	49,875

Terabeam Announces First Quarter 2007 Financial Results

May 9, 2007

Page 4

TERABEAM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
	Three Months Ended March 31,
	2007			2006
Revenues	$	17,658		$	18,536
Cost of goods sold		9,732			10,895
Gross profit		7,926			7,641
Operating expenses:
Selling costs		4,745			4,269
General and administrative		3,409			3,334
Research and development		2,810			4,886
Total operating expenses		10,964			12,489
Operating loss		(3,038	)		(4,848	)
Other income (expenses):
Interest income		44			88
Interest expense		(34	)		(33	)
Other income (loss)		66			331
Total other income (expenses)		76			386
Loss before income taxes		(2,962	)		(4,462	)
Benefit (provision) for income taxes		(24	)		(21	)
Net loss	$	(2,986	)	$	(4,483	)
Weighted average shares - basic  and diluted		21,553			21,462
Loss per share, basic and diluted	$	(0.14	)	$	(0.21	)