|   | · | Tata      Communications selected Proxim Wireless as supplier of mesh and point to      multipoint unlicensed broadband wireless  equipment |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A      Megafon subsidiary selected Proxim Wireless for one of the largest      WiMax-capable networks in Russia |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | The      Port de La Rochelle in France selected Proxim’s broadband wireless      equipment to ensure enhanced security of the 470 acre port      facilities |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Deployment      of a wireless system using Proxim's equipment for social inclusion for      3,000 users across 15,000 square kilometers in Germany by net.art      Communications |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Sanibel      Moorings installs Proxim Wi-Fi mesh network for guest internet      access |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | Malmaison      and Hotel du Vin hotel chains install Proxim Wi-Fi and Wi-Fi mesh systems      for guest internet access |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                                                                                                       |   | March      31, |    |   | December      31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                                                                                                                                       |   | 2008           |    |   | 2007              |   |
| Assets                                                                                                                                                     |   | (unaudited)    |    |   |              |   |
| Current      assets:                                                                                                                                       |   |           |    |   |              |   |
| Cash      and cash equivalents                                                                                                                             |   | $              | 7,838   |   |              | $      | 6,329 |   |
| Accounts      receivable, net                                                                                                                              |   |           | 8,077   |   |              |   | 10,010 |   |
| Inventory                                                                                                                                                  |   |           | 7,817   |   |              |   | 7,154 |   |
| Prepaid      expenses                                                                                                                                      |   |           | 1,020   |   |              |   | 1,029 |   |
| Total      current assets                                                                                                                                  |   |           | 24,752  |   |              |   | 24,522 |   |
| Property      and equipment, net                                                                                                                           |   |           | 2,418   |   |              |   | 2,542 |   |
| Other      Assets:                                                                                                                                         |   |           |    |   |              |   |   |   |
| Restricted      cash                                                                                                                                       |   |           | 76      |   |              |   | 76 |   |
| Intangible      assets, net                                                                                                                                |   |           | 8,487   |   |              |   | 9,015 |   |
| Deposits      and prepaid expenses                                                                                                                         |   |           | 255     |   |              |   | 255 |   |
| Total      other assets                                                                                                                                    |   |           | 8,818   |   |              |   | 9,346 |   |
| Total      assets                                                                                                                                          |   | $              | 35,988  |   |              | $      | 36,410 |   |
| Liabilities      and Stockholders’ Equity                                                                                                            |   |           |    |   |              |   |   |   |
| Current      liabilities:                                                                                                                                  |   |           |    |   |              |   |   |   |
| Accounts      payable and accrued expenses                                                                                                                 |   | $              | 12,161  |   |              | $      | 12,984 |   |
| Line      of credit payable                                                                                                                           |   |           | 3,000   |   |              |   | - |   |
| Deferred      revenue                                                                                                                                      |   |           | 6,562   |   |              |   | 4,001 |   |
| License      agreement payable - current maturities                                                                                                        |   |           | 1,128   |   |              |   | 1,065 |   |
| Total      current liabilities                                                                                                                             |   |           | 22,851  |   |              |   | 18,050 |   |
| License      agreement payable, net of current maturities                                                                                                  |   |           | 752     |   |              |   | 1,023 |   |
| Total      liabilities                                                                                                                                     |   |           | 23,603  |   |              |   | 19,073 |   |
| Commitments      and contingencies                                                                                                                         |   |           |    |   |              |   |   |   |
| Stockholders’      Equity                                                                                                                            |   |           |    |   |              |   |   |   |
| Preferred      stock, $0.01 par value; 4,500,000 shares authorized, none issued at March      31, 2008 and December 31, 2007                               |   |           | -       |   |              |   | - |   |
| Common      stock, $0.01 par value, 100,0000,000 shares authorized, 23,519,069 issued      and outstanding at March 31, 2008 and December 31,    2007 |   |           | 235     |   |              |   | 235 |   |
| Additional      paid-in capital                                                                                                                            |   |           | 63,771  |   |              |   | 63,451 |   |
| Retained      earnings  (accumulated deficit)                                                                                                    |   |           | (51,621 | )      |              |   | (46,349 | ) |
| Total      stockholders’ equity                                                                                                                      |   |           | 12,385  |   |              |   | 17,337 |   |
| Total      liabilities and stockholders’ equity                                                                                                      |   | $              | 35,988  |   |              | $      | 36,410 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Three      Months EndedMarch      31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 2008                                  |   |   | 2007 |   |
| Revenues                                                                                                       |   | $                                     | 11,247 |   |   | $ | 16,674 |   |
| Cost      of goods      sold                                                                                   |   |                                  | 6,152  |   |   |   | 9,040 |   |
| Gross      profit                                                                                                        |   |                                  | 5,095  |   |   |   | 7,634 |   |
| Operating      expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                  |   |   |   |   |   |   |
| Selling      costs                                                                                                       |   |                                  | 5,027  |   |   |   | 4,654 |   |
| General      and      administrative                                                                                     |   |                                  | 3,411  |   |   |   | 3,008 |   |
| Research      and      development                                                                                       |   |                                  | 1,641  |   |   |   | 2,730 |   |
| Total      operating      expenses                                                                                                           |   |                                  | 10,079 |   |   |   | 10,392 |   |
| Operating      loss                                                                                            |   |                                  | (4,984 | ) |   |   | (2,758 | ) |
| Other      income (expenses):                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                  |   |   |   |   |   |   |
| Interest      income                                                                                                     |   |                                  | 13     |   |   |   | 44 |   |
| Interest      expense                                                                                                    |   |                                  | (39    | ) |   |   | (35 | ) |
| Other      income      (loss)                                                                                            |   |                                  | (139   | ) |   |   | 24 |   |
| Gain      (loss) on sale of      assets                                                                                  |   |                                  | -      |   |   |   | 23 |   |
| Total      other income      (expenses)                                                                                                      |   |                                  | (165   | ) |   |   | 56 |   |
| Loss      before income      taxes                                                                             |   |                                  | (5,149 | ) |   |   | (2,702 | ) |
| Provision      for (benefit from) income      taxes                                                                      |   |                                  | 72     |   |   |   | 24 |   |
| Loss      from continuing      operations                                                                      |   | $                                     | (5,221 | ) |   | $ | (2,726 | ) |
| Loss      from discontinued      operations                                                                    |   | $                                     | (51    | ) |   | $ | (260 | ) |
| Net      income      (loss)                                                                                    |   | $                                     | (5,272 | ) |   | $ | (2,986 | ) |
| Weighted      average number of shares - basic and diluted used in computing net      earnings (loss) per share                                                                                                                                                                                                                                                                                                                                               |   |                                  | 23,519 |   |   |   | 21,553 |   |
| Basic      and diluted net earnings (loss) per share:                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                  |   |   |   |   |   |   |
| Continuing      operations                                                                                               |   | $                                     | (0.22  | ) |   | $ | (0.13 | ) |
| Discontinued      operations                                                                                             |   | $                                     | (0.00  | ) |   | $ | (0.01 | ) |
| Total                                                                                                                                        |   | $                                     | (0.22  | ) |   | $ | (0.14 | ) |

----

|                                                                                                                                                                                                                                                                                     |   | Three      Months Ended |   |   | Three      Months Ended |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|-------------------------|--------|
|                                                                                                                                                                                                                                                                                     |   | March      31, 2008     |   |   | March      31, 2007     |   |
|                                                                                                                                                                                                                                                                                     |   | GAAP                    |   |   | Adjustments             |   | Non-GAAP |   |   | GAAP |   |   | Adjustments |   | Non-GAAP |   |
| Revenues                                                                    |   | $                       | 11,247 |   |                    | $      |   |   | $ | 11,247 |   |   | $ | 16,674 |   |   |   |   |   | $ | 16,674 |   |
| Cost      of goods      sold                                                |   |                    | 6,152  |   |                    |   | (145)(a) (129)(c) |   |   | 5,878 |   |   |   | 9,040 |   |   |   | (143)(a) (163)(c) |   |   | 8,734 |   |
| Gross      profit                                                                     |   |                    | 5,095  |   |                    |   | 274 |   |   |   | 5,369 |   |   |   | 7,634 |   |   |   | 306 |   |   |   | 7,940 |   |
| Operating      expenses:                                                                                                                                                                                                                                                                 |   |                    |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      costs                                                                    |   |                    | 5,027  |   |                    |   | (10)(a) (78)(c) |   |   | 4,939 |   |   |   | 4,654 |   |   |   | (8)(a) (80)(c) |   |   | 4,566 |   |
| General      and      administrative                                                  |   |                    | 3,411  |   |                    |   | (100)(a)      (528)(b) (83)(c) |   |   | 2,700 |   |   |   | 3,008 |   |   |   | (114)(a)      (533)(b)      (185)(c) |   |   | 2,176 |   |
| Research      and      development                                                    |   |                    | 1,641  |   |                    |   | (119)(a) (30)(c) |   |   | 1,492 |   |   |   | 2,730 |   |   |   | (113)(a)      (49)(c) |   |   | 2,568 |   |
| Total      operating      expenses                                                                        |   |                    | 10,079 |   |                    |   | (948 | )  |   |   | 9,131 |   |   |   | 10,392 |   |   |   | (1,082 | ) |   |   | 9,310 |   |
| Operating      profit      (loss)                                           |   |                    | (4,984 | )      |                    |   | 1,222 |   |   |   | (3,762 | ) |   |   | (2,758 | ) |   |   | 1,388 |   |   |   | (1,370 | ) |
| Other      income (expenses):                                                                                                                                                                                                                                                            |   |                    |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      income                                                                  |   |                    | 13     |   |                    |   |   |   |   |   | 13 |   |   |   | 44 |   |   |   |   |   |   |   | 44 |   |
| Interest      expense                                                                 |   |                    | (39    | )      |                    |   |   |   |   |   | (39 | ) |   |   | (35 | ) |   |   |   |   |   |   | (35 | ) |
| Other      income      (loss)                                                         |   |                    | (139   | )      |                    |   |   |   |   |   | (139 | ) |   |   | 24 |   |   |   |   |   |   |   | 24 |   |
| Gain      (loss) on sale of      assets                                               |   |                    | -      |   |                    |   |   |   |   |    |   |   |   | 23 |   |   |   |     |   |   | 23 |   |
| Total      other income (expenses)                                                                                                                                                                                                                                                       |   |                    | (165   | )      |                    |   |   |   |   |   | (165 | ) |   |   | 56 |   |   |   |   |   |   |   | 56 |   |
| Loss      before income      taxes                                          |   |                    | (5,149 | )      |                    |   | 1,222 |   |   |   | (3,927 | ) |   |   | (2,702 | ) |   |   | 1,388 |   |   |   | (1,314 | ) |
| Provision      for (benefit from) income taxes                                                                                                                                                                                                                                           |   |                    | 72     |   |                    |   |   |   |   |   | 72 |   |   |   | 24 |   |   |   |   |   |   |   | 24 |   |
| Loss      from continuing operations                                                                                                                                                                                                                                                     |   | $                       | (5,221 | )      |                    |   | 1,222 |   |   | $ | (3,999 | ) |   | $ | (2,726 | ) |   |   | 1,388 |   |   | $ | (1,338 | ) |
| Loss  from      discontinued operations                                                                                                                                                                                                                                        |   | $                       | (51    | )      |                    |   |   |   |   | $ | (51 | ) |   | $ | (260 | ) |   |   |   |   |   | $ | (260 | ) |
| Net      income      (loss)                                                 |   | $                       | (5,272 | )      |                    |   | 1,222 |   |   | $ | (4,050 | ) |   | $ | (2,986 | ) |   |   | 1,388 |   |   | $ | (1,598 | ) |
| Weighted      average number of shares - basic and diluted used in computing net      earnings (loss) per share                                                                                                                                                                          |   |                    | 23,519 |   |                    |   |   |   |   |   | 23,519 |   |   |   | 21,553 |   |   |   |   |   |   |   | 21,553 |   |
| Basic      net earnings (loss) per share:                                                                                                                                                                                                                                                |   |                    |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing      operations                                                            |   | $                       | (0.22  | )      |                    | $      |   |   |   | $ | (0.17 | ) |   | $ | (0.13 | ) |   |   |   |   |   | $ | (0.06 | ) |
| Discontinued      operations                                                          |   | $                       | (0.0   | )      |                    | $      |   |   |   | $ | (0.0 | ) |   | $ | (0.01 | ) |   |   |   |   |   | $ | (0.01 | ) |
| Total                                                                                                     |   | $                       | (0.22  | )      |                    | $      |   |   |   | $ | (0.17 | ) |   | $ | (0.14 | ) |   |   |   |   |   | $ | (0.07 | ) |

|   | (a) | The      effect of depreciation of fixedassets |
|--------|-----|------------------------------------------------|

|   | (b) | The      effect of amortization of intangibleassets |
|--------|-----|-----------------------------------------------------|

|   | (c) | The      effect of stock based compensation. The company adopted the provisions of      Statement of Financial Accounting Standards No. 123R, “Share-Based      Payment” on January 1, 2006 using the modified-prospective transition      method. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|