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):
            June 30, 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
      7.01.  Regulation FD Disclosure.





As
      previously reported, on April 24, 2007, Terabeam, Inc. entered into an
      Assignment Agreement (the “First Assignment”) with SPH America, LLC, a Virginia
      limited liability company.  In the First Assignment, Terabeam agreed
      to transfer all of its right, title, and interest in and to United States patent
      numbers 5,400,338 and 6,480,497 and any inventions disclosed and claimed therein
      (and any corresponding foreign patents, applications, and rights) to SPH America
      pursuant to assignment documents to be delivered by Terabeam to an escrow agent
      before June 10, 2007.  In return, SPH America (a) agreed to pay
      Terabeam $1.0 million on or before June 10, 2007, (b) agreed to pay Terabeam
      $1.5 million on or before June 30, 2007, and (c) granted Terabeam and its
      subsidiaries perpetual, irrevocable, transferable (subject to specified
      limitations), fully paid, worldwide rights to make, have made, use, sell, offer
      for sale, and import their products generally in the ordinary course of business
      subject to certain limitations, including limitations on the products covered
      by
      these granted rights.  These granted rights include rights for direct
      and indirect customers of Terabeam and its subsidiaries to use, sell, offer
      for
      sale, or import Terabeam’s products for their intended purpose.  The
      First Assignment contemplated that the escrow agent would deliver the patent
      assignment documents to SPH after SPH had made the two contemplated payments
      to
      Terabeam.  SPH did make the two contemplated payments to Terabeam so
      Terabeam did authorize the escrow agent to release the patent assignment
      documents to SPH.





Also
      as
      previously reported, on April 24, 2007, Terabeam, Inc. and its subsidiary Proxim
      Wireless Corporation entered into an Assignment Agreement (the “Second
      Assignment”) with SPH America, LLC relating to the possible transfer of United
      States patent numbers 5,231,634 and 7,085,284 and United States patent
      application 11/441,617 and any inventions disclosed and claimed therein (and
      any
      corresponding foreign patents, applications, and rights).  The Second
      Assignment contained a due diligence contingency which permitted SPH to not
      purchase the patents and patent application if its due diligence revealed a
      reasonable basis for SPH to no longer desire to complete the
      purchase.  SPH did decide not to complete the purchase, and therefore
      the parties’ obligations under the Second Assignment are void.





The
      foregoing description of the two assignment agreements does not purport to
      be
      complete and is qualified in its entirety by the terms and conditions of those
      documents, copies of which were filed as Exhibit 10.1 and Exhibit 10.2 to the
      Form 8-K filed by Terabeam with the Securities and Exchange Commission on April
      30, 2007 and are incorporated by reference.





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:
                July 5, 2007
            By:
            /s/
                David L. RenauldDavid
                L. RenauldVice
                President


2


EXHIBIT
      INDEX








Number
            Title10.1
            Assignment
                Agreement dated as of April 24, 2007 between Terabeam, Inc. and SPH
                America, LLC (incorporated by reference to the exhibits to Form 8-K
                filed
                by Terabeam with the SEC on April 30, 2007)10.2
            Assignment
                Agreement dated as of April 24, 2007 among Terabeam, Inc., Proxim
                Wireless
                Corporation, and SPH America, LLC (incorporated by reference to the
                exhibits to Form 8-K filed by Terabeam with the SEC on April 30,
                2007)99.1
            Press
                Release dated July 5, 2007 relating to the patent
                sale







3