**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
      10-Q**




o
            
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934**For
                the quarterly period ended March 30, 2008**ORo
            
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934For
                the transition period from ________________ to
                ________________





Commission
      file number: **000-31031**





**AIRSPAN
      NETWORKS INC.**


(Exact
      name of registrant as specified in its charter)





**Washington**
            **75-2743995**(State
                or other jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                Employer
              Identification
                No.)




**777
                Yamato Road, Suite 310**
              **Boca
                Raton, FL**
            **33431**(Address
                of principal executive offices)
            (Zip
                Code)





**561-893-8670**


(Registrant’s
      telephone number, including area code)





**None**


(Former
      name, former address and former fiscal year, if changed since last
      report)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.


Yes
xNo
o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer or a smaller reporting company.
      See
      definitions of “large accelerated filer”, “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act.




Large
      accelerated filer o  A ccelerated
      filer x Non-a ccelerated
      filer o  Smaller
      reporting company o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes
o No
x





Indicate
      the number of shares outstanding of each of the issuer's classes of common
      stock, as of the latest practicable date.





Class
            
            Outstanding
                at May 5, 2008Common
                Stock, $.0003 par value per share
            
            58,683,992
                shares









**TABLE
      OF CONTENTS**




**Page**
              **Number****PART
                I. FINANCIAL INFORMATION**Item
                1.
            Financial
                StatementsCondensed
                Consolidated Balance Sheets
            3Condensed
                Consolidated Statements of Operations
            4Condensed
                Consolidated Statement of Cash Flows
            5Notes
                to Condensed Consolidated Financial Statements
            6Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            15Item
                3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            21Item
                4.
            Controls
                and Procedures
            22**PART
                II. OTHER INFORMATION**Item
                1.
            Legal
                Proceedings
            22Item
                6.
            Exhibits
            26Signatures
            
            26




2


**PART
      1. FINANCIAL INFORMATION**





**Item
      1. Financial Statements**





**AIRSPAN
      NETWORKS INC.**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**(in
      thousands, except for share data)**





**March
                30,**
              **2008**
            
            **December
                31,**
              **2007****(unaudited)**
            
            **(audited)****ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            30,789
            
            $
            30,815Restricted
                cash
            
            
            525
            
            
            393Short-term
                investments
            
            
            2,663
            
            
            5,504Accounts
                receivable, less allowance for doubtful accounts of   $3,003 at March
                30, 2008 and $2,878 at December 31, 2007
            
            
            23,654
            
            
            33,853Inventory
            
            
            16,055
            
            
            16,720Prepaid
                expenses and other current assets
            
            
            4,607
            
            
            5,338Total
                current assets
            
            
            78,293
            
            
            92,623Property,
                plant and equipment, net
            
            
            5,722
            
            
            5,895Goodwill
            
            
            10,231
            
            
            10,231Intangible
                assets, net
            
            
            1,636
            
            
            1,870Other
                non-current assets
            
            
            3,309
            
            
            3,402**Total
                assets**
            
            $
            99,191
            
            $
            114,021**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                liabilities:Accounts
                payable
            
            $
            9,008
            
            $
            11,938Deferred
                revenue
            
            
            3,072
            
            
            5,125Customer
                advances
            
            
            1,504
            
            
            892Other
                accrued expenses
            
            
            11,796
            
            
            13,063Short-term
                debt
            
            
            7,500
            
            
            7,500Total
                current liabilities
            
            
            32,880
            
            
            38,518Long-term
                debt
            
            
            1,787
            
            
            1,787Accrued
                interest on long-term debt
            
            
            229
            
            
            191**Total
                liabilities**
            
            
            34,896
            
            
            40,496**Commitments
                and contingencies****Stockholders'
                equity**Preferred
                stock, $0.0001 par value; 250,000 shares authorized at   March 30,
                2008 and December 31, 2007; 200,690 shares issued at   March 30, 2008
                and December 31, 2007Common
                stock, $0.0003 par value; 100,000,000 shares authorized   at March
                30, 2008 and December 31, 2007; 58,657,798 and 58,542,517 issued
                at  
                March 30, 2008 and December 31, 2007, respectively
            
            
            17
            
            
            17Note
                receivable – stockholder
            
            
            (87
            )
            
            (87
            )Additional
                paid-in capital
            
            
            350,540
            
            
            349,718Accumulated
                deficit
            
            
            (286,175
            )
            
            (276,123
            )**Total
                stockholders' equity**
            
            
            64,295
            
            
            73,525**Total
                liabilities and stockholders' equity**
            
            $
            99,191
            
            $
            114,021





*The
      accompanying notes are an integral part of these financial
      statements.*




3




**AIRSPAN
      NETWORKS INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


**(in
      thousands, except for share and per share data)**





**Quarter ended**
              **March 30, 2008**
            
            **Quarter ended**
              **April 1, 2007****(unaudited)**
            
            **(unaudited)**Revenue
            
            $
            17,159
            
            $
            26,660Cost
                of revenue
            
            
            (11,923
            )
            
            (18,409
            )Gross
                profit
            
            
            5,236
            
            
            8,251Operating
                expenses:Research
                and development
            
            
            6,936
            
            
            5,606Sales
                and marketing
            
            
            4,239
            
            
            3,362Bad
                debts
            
            
            47
            
            
            232General
                and administrative
            
            
            4,140
            
            
            4,178Amortization
                of intangibles
            
            
            234
            
            
            234Restructuring
            
            
            -
            
            
            40Total
                operating expenses
            
            
            15,596
            
            
            13,652Loss
                from operations
            
            
            (10,360
            )
            
            (5,401
            )Interest
                income, net
            
            
            116
            
            
            280Other
                income, net
            
            
            242
            
            
            32Loss
                before income taxes
            
            
            (10,002
            )
            
            (5,089
            )Income
                tax provision
            
            
            (50
            )
            
            (39
            )Net
                loss
            
            $
            (10,052
            )
            $
            (5,128
            )Net
                loss per share - basic and diluted
            
            $
            (0.17
            )
            $
            (0.13
            )Weighted
                average shares outstanding - basic and diluted
            
            
            58,599,702
            
            
            40,528,097





*The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.*




4





**AIRSPAN
      NETWORKS INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(in
      thousands)**





**Year to date**
              **March 30, 2008**
            
            **Year to date**
              **April 1, 2007****(unaudited)**
            
            **(unaudited)****Cash
                flows from operating activities**Net
                loss
            
            $
            (10,052
            )
            $
            (5,128
            )Adjustments
                to reconcile net loss to net cash used in operating activities:Depreciation
                and amortization
            
            
            996
            
            
            915Accrued
                interest on long-term debt
            
            
            38
            
            
            51Non-cash
                stock compensation
            
            
            736
            
            
            605Bad
                debts
            
            
            47
            
            
            232Changes
                in operating assets and liabilities:Decrease
                in receivables
            
            
            10,151
            
            
            6,373Decrease
                in inventories
            
            
            665
            
            
            580Decrease
                in other current assets
            
            
            732
            
            
            683Decrease
                in accounts payables
            
            
            (2,931
            )
            
            (3,994
            )Decrease
                in deferred revenue
            
            
            (2,053
            )
            
            (4,792
            )Increase
                in customer advances
            
            
            613
            
            
            2,571(Decrease)/increase
                in other accrued expenses
            
            
            (1,244
            )
            
            47(Increase)/decrease
                in other operating assets
            
            
            (39
            )
            
            738Net
                cash used in operating activities
            
            
            (2,341
            )
            
            (1,119
            )**Cash
                flows from investing activities**Purchase
                of property, plant and equipment
            
            
            (590
            )
            
            (602
            )Purchase
                of investment securities
            
            
            (1,657
            )
            
            (4,399
            )Sale
                of investment securities
            
            
            4,500
            
            
            5,274Net
                cash provided by investing activities
            
            
            2,253
            
            
            273**Cash
                flows from financing activities**Borrowings
                under line of credit
            
            
            -
            
            
            3,000Proceeds
                from the exercise of stock options
            
            
            62
            
            
            988Net
                cash provided by financing activities
            
            
            62
            
            
            3,988(Decrease)/increase
                in cash and cash equivalents
            
            
            (26
            )
            
            3,142**Cash
                and cash equivalents, beginning of period**
            
            
            30,815
            
            
            15,890**Cash
                and cash equivalents, end of period**
            
            $
            30,789
            
            $
            19,032





*The
      accompanying notes are an integral part of these condensed consolidated
      financial statements*




5


**Airspan
      Networks Inc.**


**Notes
      to Condensed Consolidated Financial Statements**


**(Unaudited)**





**NOTE
      1 – BUSINESS AND BASIS OF PRESENTATION**





Airspan
      Networks Inc. (“Airspan” or “the Company”) is a global supplier of broadband
      wireless equipment supporting the Worldwide Interoperability for Microwave
      Access (“WiMAX”) protocol standard, which provides a wide area telecommunication
      access network to connect end-users to telecom backbone networks. The WiMAX
      standard is established by the WiMAX Forum®, a self-regulatory, industry
      standards-setting organization. While our main product focus is WiMAX, we
      utilize other supplemental technologies, including Wireless
      Fidelity (“Wi-Fi”) and Voice-over-Internet Protocol (“VoIP”), which allow communications
      network operators and service providers to deliver high-speed data and voice
      services cost-effectively using wireless communications rather than wired
      infrastructure.




Historically,
      the primary market for our wireless systems has been fixed point to multi-point
      applications. Our development of new technology has expanded the market to
      include portable and mobile applications. Today, we produce radio base station
      equipment to transmit radio signals from a central location to the end-user
      who
      is equipped with a subscriber receiving unit. Our WiMAX products now enable
      major network migrations to Internet Protocol (“IP”), which makes higher
      transmission speeds possible due to more efficient transmission techniques.
      After the expected certification of mobile WiMAX standards, we expect our mobile
      applications will be made available directly to end-user devices such as laptops
      and PDAs to deliver wireless connectivity - at home, in the office and on the
      move. Leveraging our experience with WiMAX technology and our experience gained
      from 15 years of developing and deploying broadband wireless systems, we are
      focused on developing products for these mobile WiMAX applications in addition
      to our fixed wireless products.




Our
      primary target customers are communications service providers and other network
      operators that deploy WiMAX networks in licensed and unlicensed (license-exempt)
      spectrums worldwide. These customers include incumbent local exchange carriers
      (often referred to as “local exchange carriers”, “ILECs”, or simply telephone
      companies), Internet service providers (often referred to as “ISPs”), Wireless
      Internet Service providers (often referred to as “WISPs”), Mobile Virtual
      Network Operators (often referred to as “MVNOs”), Competitive Local Exchange
      Carriers (“CLECs”), and other telecommunications users, such as utilities and
      other enterprises. As mobile WiMAX products are deployed, we are also targeting
      mobile and cellular carriers, which represent a significant expansion of our
      traditional addressable market. Our broadband wireless systems have been
      installed by more than 500 network operators in more than 100
      countries.




Each
      of
      our wireless systems uses digital radio technologies, which provide wide-area
      or
      local-area coverage, robust security and resistance to fading. Our systems
      synchronize available bandwidth with the specific services being provided,
      thereby facilitating the most efficient use of radio equipment resources and
      spectrum. Our systems are designed as modular solutions enabling the expansion
      of existing deployments as technologies and customer needs evolve. We provide
      a
      wide range of subscriber devices that deliver voice and data connection, or
      a
      combination of both, eliminating the need for multiple access devices in
      customer premises. In 2007, we announced the introduction of a portable
      miniature device that can be plugged into a standard laptop and can provide
      VoIP
      capability, thereby optimizing the use of WiMAX for voice services.




Our
      network management systems provide diagnostic and management tools that allow
      our customers to monitor and optimize their installations. To facilitate the
      deployment and operation of our systems, we also offer network installation
      (generally through subcontractors), training, radio planning and support
      services.




Our
      corporate headquarters are located in Boca Raton, Florida. Our main operations,
      manufacturing and product development centers are located in Uxbridge, United
      Kingdom and Airport City, Israel. Our telephone number in Boca Raton is (561)
      893-8670. Further contact details and the location of all our worldwide offices
      may be found at *www.airspan.com* .




6





*Basis
      of Presentation*





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America for interim financial information and with the
      instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
      do
      not include all of the information and footnotes required by accounting
      principles generally accepted in the United States of America for complete
      financial statements. In the opinion of management, all adjustments considered
      necessary for a fair presentation have been included and are of a normal
      recurring nature. The interim operating results are not necessarily indicative
      of operating results expected in subsequent periods or for the year as a
      whole.  Certain reclassifications have been made to prior period amounts to
      conform to the current period presentation.





The
      condensed consolidated balance sheet at December 31, 2007 has been derived
      from
      the audited financial statements at that date included in our Form 10-K for
      the
      year ended December 31, 2007 but does not include all of the information and
      footnotes required by accounting principles generally accepted in the United
      States of America for complete financial statements. For further information,
      refer to the consolidated financial statements and footnotes thereto included
      in
      our Annual Report on Form 10-K for the year ended December 31, 2007.





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





All
      notes
      to the condensed consolidated financial statements are shown in thousands,
      except for share and per share data.




**NOTE
      2 - INVENTORY**





Inventory
      consists of the following:




**March
                30,**
              **2008**
            
            **December
                31,**
              **2007****(unaudited)**
            
            **(audited)**Purchased
                parts and materials
            
            $
            6,515
            
            $
            6,941Work
                in progress
            
            
            1,138
            
            
            1,283Finished
                goods and consumables
            
            
            18,305
            
            
            20,585Inventory
                provision
            
            
            (9,903
            )
            
            (12,089
            )$
            16,055
            
            $
            16,720





Inventories
      are stated at the lower of cost or market value. Cost includes all costs
      incurred in bringing each product to its present location and condition, as
      follows:


·
              Raw
                  materials, consumables and finished goods — average cost
 ·
              Work
                  in progress— cost of direct materials and labor.




**NOTE
      3 - ACCRUED RESTRUCTURING CHARGES**





In
      the
      fourth quarter of 2002, the decision was made to completely outsource all of
      our
      manufacturing. As a result, a $1.0 million restructuring charge was recorded
      for
      the closure of our Riverside, Uxbridge facility in 2003. All of this cost
      relates to the excess facility. A further $0.4 million was recognized as
      restructuring in the income statement in the fourth quarter of 2003 as we
      reassessed the ability to sublease the Riverside facility. The lessor completed
      renovations and incurred actual costs for approximately $0.8 million, which
      the
      Company paid in February 2008 in final settlement. All cash outflows in
      connection with this restructuring were paid in February 2008.




7





In
      the
      third quarter of 2006, the Company commenced a company-wide restructuring
      program to reduce operating expenses. The operating expense reduction was
      accomplished primarily through reductions in worldwide headcount. In 2006,
      the
      Company recorded restructuring charges of $2.2 million. The Company made
      approximately $0.4 million of cash outlays in 2007 related to amounts accrued
      in
      2006. All cash outlays related to this program were completed in the second
      quarter of 2007.




The
      restructuring charges and their utilization are summarized as
      follows:





**Total expected**
              **to
                be**
              **incurred**
            
            **Incurred during**
              **the
                quarter**
              **ended March 30,**
              **2008**
            
            **Cumulative**
              **incurred
                at**
              **March 30, 2008****(unaudited)**
            
            **(unaudited)**
            
            **(unaudited)**One
                time termination benefits
            
            $
            2,124
            
            $
            -
            
            $
            2,124Contract
                termination costs
            
            
            1,437
            
            
            -
            
            
            1,437Other
                associated costs
            
            
            50
            
            
            -
            
            
            50$
            3,611
            
            $
            -
            
            $
            3,611





**Balance
                at**
              **Beginning**
              **of
                Period**
            
            **Restructuring****Charge**
            
            **Utilized**
            
            **Balance
                at**
              **End**
              **of
                Period****Three
                months ended March 30, 2008 (unaudited)**One
                time termination benefits
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Contract
                termination costs
            
            
            796
            
            
            -
            
            
            796
            
            
            -Other
                associated costs
            
            
            -
            
            
            -
            
            
            -
            
            
            -$
            796
            
            $
            -
            
            $
            796
            
            $
            -**Year
                ended December 31, 2007 (audited)**One
                time termination benefits
            
            $
            375
            
            $
            -
            
            $
            (375
            )
            $
            -Contract
                termination costs
            
            
            1,437
            
            
            (639
            )
            
            (2
            )
            
            796Other
                associated costs
            
            
            50
            
            
            (50
            )
            
            -
            
            
            -$
            1,862
            
            $
            (689
            )
            $
            (377
            )
            $
            796





**NOTE
      4 – COMMITMENTS AND CONTINGENCIES**





*Commitments*





As
      of
      March 30, 2008, our material commitments consisted of obligations on operating
      leases, repayment of principal and interest owed on the Tekes loans and purchase
      commitments to our manufacturing subcontractors. These purchase commitments
      totaled $11.9 million at March 30, 2008. We have no material capital
      commitments.




*Warranty*





The
      Company provides limited warranties, usually for periods ranging from twelve
      to
      twenty-four months, to all purchasers of its new equipment. Warranty expense
      is
      accrued at the date revenue is recognized on the sale of equipment and is
      recognized as a cost of revenue. The expense is estimated based on analysis
      of
      historic costs and other relevant factors. Management believes that the amounts
      provided are sufficient for all future warranty costs on equipment sold through
      March 30, 2008 but if actual product failure rates, material usage or service
      delivery costs differ from estimates, revisions to the estimated warranty
      liability would be required.




8




Information
      regarding the changes in our product warranty liabilities was as follows for
      the
      three months ended March 30, 2008.





**Balance
                at beginning**
              **of
                period**
            
            **Accrual for
                warranties**
              **issued**
              **during****the**
              **period**
            
            **Changes in
                accruals**
              **related
                to**
              **pre-existing
                warranties (including**
              **changes
                in**
              **estimates)**
            
            **Settlements**
              **made
                (in**
              **cash
                or in**
              **kind)**
              **during
                the**
              **period**
            
            **Balance
                at end of period**Three
                months ended March 30, 2008Product
                warranty liability
            
            $
            1,010
            
            $
            49
            
            $
            (97
            )
            $
            1
            
            $
            963





*Other
      guarantees*





The
      Company had bank guarantees with its landlords and customers aggregating $1.3
      million at March 30, 2008 and at December 31, 2007. The guarantees secure
      payment or performance obligations of the Company under contracts. The Company
      has pledged cash to the banks as collateral for guarantees aggregating $1.3
      million, of which $0.1 million is recorded as restricted cash in current assets
      and $1.2 million is recorded as other non-current assets. The Company has also
      issued guarantees to customers under the line of credit provided by Silicon
      Valley Bank for a total of $2.3 million, which does not require any related
      pledge of cash collateral. The Company has not recognized any liability for
      these guarantees as in management’s opinion the likelihood of having to make
      payments under the guarantees is remote. These guarantees will all expire before
      the end of 2011 with the majority expiring in 2009.





In
      addition to the guarantees mentioned above, the Company has issued a guarantee
      to Tekes, the main public funding organization for research and development
      in
      Finland, for the repayment of loans taken out by its fully consolidated
      subsidiary, Airspan Networks (Finland) OY (“Radionet”). These loans total $2.0
      million at March 30, 2008, which includes $0.2 million of accrued interest,
      and
      are recorded in long-term debt. This guarantee expires only when Radionet has
      fulfilled all its obligations to Tekes.





*Legal
      claims*




On
      and
      after July 23, 2001, three Class Action Complaints were filed in the United
      States District Court for the Southern District of New York naming as defendants
      Airspan, and certain current or former officers and directors (referred to
      herein as the “Individual Defendants”) together with certain underwriters of our
      July 2000 initial public offering. A Consolidated Amended Complaint, which
      is
      now the operative complaint, was filed on April 19, 2002. The complaint alleges
      violations of Sections 11 and 15 of the Securities Act of 1933 and Sections
      10(b) and 20(a) of the Securities Exchange Act of 1934 for issuing a
      Registration Statement and Prospectus that contained materially false and
      misleading information and failed to disclose material information. In
      particular, the plaintiffs allege that the underwriter-defendants agreed to
      allocate stock in our initial public offering to certain investors in exchange
      for excessive and undisclosed commissions and agreements by those investors
      to
      make additional purchases of stock in the aftermarket at pre-determined prices.
      The action seeks damages in an unspecified amount.




This
      action is being coordinated with approximately three hundred nearly identical
      actions filed against other companies. On October 9, 2002, the Court dismissed
      the Individual Defendants from the case without prejudice. This dismissal
      disposed of the Section 15 and 20(a) control person claims without prejudice.
      On
      February 19, 2003, the Court dismissed the Section 10(b) claim against us,
      but
      allowed the Section 11 claim to proceed. On December 5, 2006, the Second Circuit
      vacated a decision by the district court granting class certification in six
      of
      the coordinated cases, which are intended to serve as test, or “focus,” cases.
 The plaintiffs selected these six cases, which do not include Airspan. The
      district court’s decisions in the six focus cases are intended to provide strong
      guidance for the parties in the remaining cases. On April 6, 2007, the Second
      Circuit denied a petition for rehearing filed by the plaintiffs, but noted
      that
      the plaintiffs could ask the district court to certify more narrow classes
      than
      those that were rejected.




9




On
      August
      14, 2007, the plaintiffs filed amended complaints in the six focus cases. The
      amended complaints include a number of changes, such as changes to the
      definition of the purported class of investors. On September 27, 2007, the
      plaintiffs moved to certify classes in the six focus cases. The six focus case
      issuers and the underwriters named as defendants in the focus cases filed
      motions to dismiss the amended complaints against them. On March 26, 2008,
      the
      District Court dismissed the Section 11 claims of those members of the putative
      classes in the focus cases who sold their securities for a price in excess
      of
      the initial offering price and those who purchased outside the previously
      certified class period. With respect to all other claims, the motions to dismiss
      were denied. We are awaiting a decision from the Court on the class
      certification motion. Due to the inherent uncertainties of litigation, we cannot
      accurately predict the ultimate outcome of the matter.  We cannot predict
      whether we will be able to renegotiate a settlement that complies with the
      Second Circuit’s mandate, nor can we predict the amount of any such settlement
      and whether that amount would be greater than Airspan’s insurance
      coverage.  If Airspan is found liable, we are unable to estimate or predict
      the potential damages that might be awarded, whether such damages would be
      greater than Airspan’s insurance coverage and whether such damages would have a
      material impact on our results of operations or financial condition in any
      future period.




On
      October 9, 2007, a purported  Airspan  shareholder
      filed a complaint for violation of Section 16(b) of the Securities Exchange
      Act of 1934, which prohibits short-swing trading, against the Company's IPO
      underwriters. The complaint, Vanessa Simmonds v.  Credit
      Suisse Group, et al., Case No. C07-01638, filed in District Court for the
      Western District of Washington, seeks the recovery of short-swing
      profits. The Company is named as a nominal defendant. No recovery is
      sought from the Company.




We
      and
      other WiMAX manufacturers have received letters from Wi-LAN raising various
      patent infringement claims and offering licenses of various Wi-LAN patents.
      We
      received a letter, dated November 9, 2006, offering us licenses of various
      Wi-LAN patents. After reviewing Wi-LAN’s claims, on February 1, 2007, we sent a
      letter to Wi-LAN notifying them that we did not believe that we require a
      license from Wi-LAN. On May 29, 2007, we received a follow up letter and
      materials from Wi-LAN which continued to assert those
      claims.   Once again the Company has carefully reviewed this
      matter, and in consultation with its patent counsel sent a further letter on
      January 30, 2008 declining Wi-LAN’s offer to license their patents. However,
      Wi-LAN continues to assert its claims and there can be no assurance as to the
      ultimate outcome of this matter.




Except
      as
      set forth above, we are not currently subject to any other material legal
      proceedings. We may from time to time become a party to various other legal
      proceedings arising in the ordinary course of our business.





**NOTE
      5 - STOCK COMPENSATION**




At
      March
      30, 2008, we had three stock option plans as well as the 2004 Omnibus Equity
      Compensation plan and the 2000 Employee Stock Purchase Plan (“ESPP”). Awards
      under the 2004 Omnibus Equity Compensation Plan may be made to participants
      in
      the form of Incentive Stock Options, Nonqualified Stock Options, Stock
      Appreciation Rights, Restricted Stock, Deferred Stock, Stock Awards, Performance
      Shares, Other Stock-Based Awards and others forms of equity based compensation
      as may be provided and are permissible under this Plan and the law. Employee
      stock options granted under all of the plans generally vest over a four-year
      period and expire on the tenth anniversary of their issuance. All options
      granted under the stock option plans had an exercise price equal to the market
      value of the underlying common stock on the date of grant. Restricted stock
      is
      common stock that is subject to a risk of forfeiture or other restrictions
      that
      will lapse upon satisfaction of specified performance conditions and/or the
      passage of time. Awards of restricted stock that vest only by the passage of
      time will generally fully vest after four years from the date of grant. At
      March
      30, 2008, the Company had reserved a total of 8,124,979 shares of its common
      stock for issuance under the above plans.




10





The
      following table summarizes share-based compensation expense under SFAS 123(R)
      for the three months ended March 30, 2008 and April 1, 2007, which was allocated
      as follows (in thousands):





Three months endedMarch
                30,
            
            April
                1,2008
            
            2007Research
                and development
            
            $
            280
            
            $
            165Sales
                and marketing
            
            
            147
            
            
            178General
                and administrative
            
            
            276
            
            
            254Stock-based
                compensation expense included in operating expense
            
            
            703
            
            
            597Cost
                of sales
            
            
            33
            
            
            7Total
                stock-based compensation
            
            $
            736
            
            $
            604




SFAS
      123(R) requires companies to estimate the fair value of share-based awards
      on
      the date of grant using an option-pricing model. The value of the portion of
      the
      award that is ultimately expected to vest is recognized as an expense in our
      consolidated statement of operations over the requisite service periods.
      Compensation expense for all share-based awards is recognized using the
      straight-line single-option method. Because share-based compensation expense
      is
      based on awards that are ultimately expected to vest, share-based compensation
      expense has been reduced to account for estimated forfeitures. SFAS 123(R)
      requires forfeitures to be estimated at the time of grant and revised, if
      necessary, in subsequent periods if actual forfeitures differ from those
      estimates.




To
      calculate option-based compensation under SFAS 123(R), we used the Black-Scholes
      option-pricing model. Our determination of fair value of option-based awards
      on
      the date of grant using the Black-Scholes model is affected by our stock price
      as well as assumptions regarding a number of subjective variables. These
      variables include, but are not limited to our expected stock price volatility
      over the term of the awards, and actual and projected employee stock option
      exercise behaviors.





*Fair
      Value and Assumptions Used to Calculate Fair Value under SFAS
      123(R)*





There
      were no restricted stock shares granted during the first three months of 2008.
      The weighted average fair value of each restricted stock share granted under
      our
      equity compensation plans for the first three months of fiscal 2007 was $4.69.
      The fair value of each restricted stock award is estimated on the date of grant
      using the intrinsic value method.





The
      weighted average fair value of each option granted during the first three months
      of 2008 and the first three months of 2007 was $0.78 and $2.91, respectively.
      The fair value of each option award is estimated on the date of grant using
      the
      Black-Scholes Option Pricing Model, using the following weighted average
      assumptions:





Three
                Months EndedMarch
                30,
              2008
            
            April
                1,
              2007Expected
                volatility
            
            
            80
            %
            
            82
            %Risk-free
                interest rate
            
            
            2.77
            %
            
            4.74
            %Expected
                life (years)
            
            
            5
            
            
            5Expected
                dividend yield
            
            
            0
            %
            
            0
            %





11




*Assumptions
      for Option-Based Awards under SFAS 123(R)*





The
      expected volatility is determined based on historical price changes of our
      common stock over a period of time which approximates the expected option
      term.





The
      risk-free interest rate assumption is based upon observed interest rates
      appropriate for the term of our stock options.




The
      expected term of options is estimated based on our historical data regarding
      exercise behavior.





The
      dividend yield assumption is based on our history and expectation of no dividend
      payouts.





As
      share-based compensation expense recognized in the consolidated statement of
      operations is based on awards ultimately expected to vest, it has been reduced
      for estimated forfeitures. Forfeitures were estimated based on our historical
      experience.





**NOTE
      6 - NET LOSS PER SHARE**





Net
      loss
      attributable to common stockholders per share is computed using the weighted
      average number of shares of common stock outstanding. Shares associated with
      stock options and common stock to be issued on the conversion of Series B
      Preferred stock are not included in the calculation of diluted net loss
      attributable to common stockholders per share as they are
      anti-dilutive.




The
      following table sets forth the computation of basic and diluted net loss per
      share for the periods indicated.




**Quarter
                Ended****March
                30,**
              **2008**
            
            **April
                1,**
              **2007****(unaudited)**Numerator:Net
                loss
            
            $
            (10,052
            )
            $
            (5,128
            )Denominator:Weighted
                average common shares outstanding basic and diluted
            
            
            58,599,702
            
            
            40,528,097Net
                loss per share- basic and diluted
            
            $
            (0.17
            )
            $
            (0.13
            )





There
      were 6,907,538 stock options outstanding at March 30, 2008 and 5,476,114 stock
      options outstanding at April 1, 2007 that were excluded from the computation
      of
      diluted net loss per share as their effect was anti-dilutive. If the Company
      had
      reported net income, the calculation of these per share amounts would have
      included the dilutive effect of these common stock equivalents using the
      treasury stock method for stock options. There were 200,690 shares of
      convertible preferred stock at March 30, 2008 and April 1, 2007, respectively,
      that were also excluded from the computation of diluted net loss per share
      as
      their effect was anti-dilutive. The 200,690 shares of convertible preferred
      stock would be convertible into 21,630,856 and 20,069,000 common shares as
      of
      March 30, 2008 and April 1, 2007, respectively.  There
      were 107,940 and 136,434 nonvested shares of restricted stock at March 30,
      2008
      and April 1, 2007, respectively, that were excluded from the computation of
      diluted net loss per share as their effect was anti-dilutive.





**NOTE
      7 - GEOGRAPHIC INFORMATION**





As
      a
      developer and supplier of broadband wireless equipment and other technologies,
      the Company has one reportable segment. The revenue of this single segment
      is
      comprised primarily of revenue from products and, to a lesser extent, services.
      In 2008, the majority of the Company’s revenue was generated from products
      manufactured in the United Kingdom, Mexico and Israel, with additional revenue
      generated from sales of original equipment manufacturers’ ("OEM") products.




12





An
      analysis of revenue by location of the customer is given below:





**Quarter
                Ended****March 30, 2008**
            
            **April 1, 2007****(unaudited)**USA
                and Canada
            
            $
            2,508
            
            $
            2,698Asia
            
            
            2,027
            
            
            8,949Europe
            
            
            3,361
            
            
            6,870Africa
                and the Middle East
            
            
            5,210
            
            
            1,033Latin
                America and Caribbean
            
            
            4,053
            
            
            7,110$
            17,159
            
            $
            26,660





**NOTE
      8 - RECENT ACCOUNTING PRONOUNCEMENTS**





*Adopted
      Accounting Standards*




Effective
      January 1, 2008, the Company adopted SFAS No. 157, “Fair Value
      Measurements”, or SFAS 157, which defines fair value as the exchange price that
      would be received for an asset or paid to transfer a liability (an exit price)
      in the principal or most advantageous market for the asset or liability in
      an
      orderly transaction between market participants at the measurement date.
      SFAS 157 establishes a three-level fair value hierarchy that prioritizes
      the inputs used to measure fair value. This hierarchy requires entities to
      maximize the use of observable inputs and minimize the use of unobservable
      inputs. The three levels of inputs used to measure fair value are as
      follows:




Level
      1 – quoted prices in active markets for identical assets or
      liabilities




Level
      2 –
inputs other than Level 1 quoted prices that are directly or indirectly
      observable




Level
      3 –
significant unobservable inputs that are supported by little or no market
      activity




The
      Company’s adoption of SFAS 157 did not have a material impact on its
      consolidated financial statements. The Company has segregated all financial
      assets and liabilities at fair value on a recurring basis into the most
      appropriate level within the fair value hierarchy based on the inputs used
      to
      determine the fair value at the measurement date in the table below. FASB Staff
      Position (FSP FAS 157-2—Effective Date of FASB Statement No. 157), or FSP
      FAS 157-2, delayed the effective date for all nonfinancial assets and
      liabilities until January 1, 2009, except those that are recognized or
      disclosed at fair value in the financial statements on a recurring
      basis.




As
      of
      March 30, 2008, financial assets and liabilities subject to fair value
      measurements were as follows (in thousands):




As of March 30, 2008Level 1
            
            Level 2
            
            Level 3
            
            BalanceAssetsCash
                and cash equivalents (1)
            
            $
            16,168
            
            $
            6,371
            
            $
            -
            
            $
            22,539Available
                for sale investments (2)
            
            $
            -
            
            $
            2,663
            
            $
            -
            
            $
            2,663




(1)
            These
                consist of money market funds that are priced at the expected market
                price




13




(2)
            These
                consist of commercial paper with short maturities and infrequent
                secondary
                market trades and are priced via mathematical calculations; in the
                event
                that a transaction is observed on the same security, the accretion
                schedule is revised




In
      February 2007, the FASB issued Statement No. 159, “The Fair Value
      Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159
      allows entities the option to measure eligible financial instruments at fair
      value as of specified dates. Such election, which may be applied on an
      instrument-by-instrument basis, is typically irrevocable once elected. Upon
      adoption, we did not elect the fair value option for any items within the scope
      of SFAS 159 and, therefore, the adoption of SFAS 159 did not have an impact
      on
      our consolidated financial statements.




In
      June
      2007, the FASB ratified Emerging Issues Task Force 07-3, “Accounting for
      Nonrefundable Advance Payments for Goods or Services Received for Use in Future
      Research and Development Activities” (EITF 07-3). EITF 07-3 requires
      nonrefundable advance payments for research and development goods or services
      to
      be deferred and capitalized. The adoption of EITF 07-3 did not have a material
      effect on our consolidated financial statements.




***Future
      Adoption of Accounting Standards***




In
      December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
      Combinations, (“SFAS 141R”). SFAS 141R requires the acquiring entity in a
      business combination to recognize the full fair value of assets acquired and
      liabilities assumed in the transaction whether full or partial acquisition,
      establishes the acquisition-date fair value as the measurement objective for
      all
      assets acquired and liabilities assumed, requires expensing of most transaction
      and restructuring costs, and requires the acquirer to disclose all information
      needed to evaluate and understand the nature and financial effect of the
      business combination. SFAS 141R applies to all transactions or other events
      in
      which an entity obtains control of one or more businesses, including
      combinations achieved without transfer of consideration, for example, by
      contract alone or through the lapse of minority veto rights. SFAS 141R applies
      prospectively to business combinations for which the acquisition date is on
      or
      after the beginning of the first fiscal year beginning after December 15, 2008.
      We are currently evaluating the impact SFAS 141R may have on our consolidated
      financial statements.




In
      December 2007, EITF 07-01, Accounting for Collaborative Arrangements
      Related to the Development and Commercialization of Intellectual Property
      (“ EITF 07-01)
      was issued. EITF 07-01
      prescribes the accounting for collaborations. It requires certain transactions
      between collaborators to be recorded in the income statement on either a gross
      or net basis within expenses when certain characteristics exist in the
      collaboration relationship. Based
      on
      the nature of the arrangement, payments to or from collaborators would be
      evaluated and the terms of the arrangement the nature of the entity's business
      and whether those payments are within the scope of other accounting literature
      would be presented. Companies are also required to disclose the nature and
      purpose of collaborative arrangements along with the accounting policies and
      the
      classification and amounts of significant financial-statement amounts related
      to
      the arrangements. EITF 07-1 is effective for financial statements issued
      for fiscal years beginning after December 15, 2008, and interim periods
      within those fiscal years, and is to be applied retrospectively to all periods
      presented for all collaborative arrangements existing as of the effective date.We
      are
      evaluating the impact this standard will have on our consolidated financial
      statements.




In
      December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
      Consolidated Financial Statements, an Amendment
      of ARB No. 51 (“SFAS
      160”) .
      SFAS
      160 will change the accounting and reporting for minority interests, which
      will
      be recharacterized as noncontrolling interests and classified as a separate
      component of equity rather than as a liability.  SFAS 160 is effective for
      fiscal years beginning on or after December 15, 2008. We are currently
      evaluating the impact of adopting SFAS 160 on our consolidated financial
      statements.




In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities - an amendment of FASB Statement No. 133” (“SFAS
      161”).  SFAS 161 amends and expands the disclosure requirements of
      Statement 133 to provide a better understanding of how and why an entity uses
      derivative instruments, how derivative instruments and related hedged items
      are
      accounted for, and their effect on an entity’s financial position, financial
      performance, and cash flows.  SFAS 161 is effective for fiscal years
      beginning after November 15, 2008. We are currently evaluating the impact that
      the adoption of SFAS 161 will have on our consolidated financial
      statements.




14





**Item
                2.**
            **MANAGEMENT’S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.**




**The
      following discussion should be read in conjunction with the Company’s Annual
      Report on Form 10-K for** **the
      year ended December 31, 2007, as well as the financial statements and notes
      thereto. Except for historical matters contained herein, statements made in
      this
      quarterly report on Form 10-Q are forward-looking and are made pursuant to
      the
      safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
      Without limiting the generality of the foregoing, words such as “may”, “will”,
“to”, “plan”, “expect”, “believe”, “anticipate”, “intend”, “could”, “would”,
“estimate”, or “continue” or the negative other variations thereof or comparable
      terminology are intended to identify forward-looking statements. Investors
      and
      others are cautioned that a variety of factors, including certain risks, may
      affect our business and cause actual results to differ materially from those
      set
      forth in the forward-looking statements. These risk factors include, without
      limitation, (i) risks to our ability to develop and sell WiMAX certified
      mobile products in a timely fashion; (ii) a slowdown of expenditures by
      communication service providers and failure of the WiMAX market to develop
      as
      anticipated; (iii) increased competition from alternative communication
      systems; (iv) a higher than anticipated rate of decline in our legacy
      business and/or a slower than anticipated rate of growth in the WiMAX business;
      (v) encroachment of large telecommunications carriers and equipment
      suppliers on the WiMAX market; (vi) the failure of our existing or
      prospective customers to purchase products as projected; (vii) our
      inability to successfully implement cost reduction or containment programs;
      (viii) our inability to retain our key customers; (ix) possible
      infringement of third party technologies which may result in lawsuits that
      could
      be costly to defend and prohibit us from selling our products; (x) risks to
      our ability to compensate for declining sales of obsolescent products with
      increased sales of new products; and (xi) disruptions to our operations in
      Israel, including the absence of employees, due to required military service,
      caused by political and military tensions in the Middle East. The Company is
      also subject to the risks and uncertainties described in its filings with the
      Securities and Exchange Commission, including those set forth under “Part II —
Item 1A. Risk Factors” in this quarterly report on Form 10-Q for the quarter
      ended March 30, 2008.**





**Overview**





We
      are a
      global supplier of broadband wireless equipment supporting the WiMAX protocol
      standard, which provides a wide area telecommunication access network to connect
      end users to telecom backbone networks. Our primary target customers are
      communications service providers and other network operators that deploy WiMAX
      networks in licensed and unlicensed (license exempt) spectrums
      worldwide.




Historically,
      our business addressed communications service providers that used fixed,
      non-WiMAX wireless infrastructure to deliver services in those parts of their
      service areas that are difficult or not cost effective to reach using copper
      or
      fiber. We now offer a comprehensive range of WiMAX solutions to support these
      traditional fixed wireless applications as well as the broader market for the
      mobile applications that WiMAX is expected to enable. We are leveraging many
      years of experience in complex radio systems design to provide innovative and
      cost effective products for all types of WiMAX users.




We
      have
      transitioned our company over the last three years to focus on WiMAX product
      development and sales and marketing. As a result, a majority of our resources
      are now dedicated to WiMAX-based products.




15





Since
      1998 we have evolved from being the supplier of one line of broadband wireless
      access (“BWA”) equipment that utilized our proprietary technology to a supplier
      of a highly diversified suite of BWA equipment, including certain equipment
      that
      has been developed to conform with WiMAX and the WiFi standards. The
      diversification of our product portfolio has been the product of both internal
      research and development and targeted acquisitions.





As
      a
      result of the migration of telecommunications to platforms that operate using
      the Internet protocol, we expect that our BWA equipment which is designed to
      handle communications over the Internet will become increasingly important
      to
      us. Due to the projected popularity of technologies such as WiMAX and WiFi,
      we
      also anticipate that our WiMAX and WiFi products will become increasingly
      important to us. Our WiMAX and WiFi products are designed to be inter-operable
      with any other equipment that is WiMAX or WiFi Certified,
      respectively. ****** Accordingly,
      we believe these relatively new products will face certain opportunities and
      risks that our proprietary products did not encounter.





The
      market for BWA equipment has been characterized by rapid technological
      developments and evolving industry standards. Our future success will therefore
      depend on our ability to adapt to these new standards and to successfully
      introduce new technologies that meet customer preferences. We anticipate that
      we
      will need to continue to devote considerable resources to research and
      development to maintain and/or improve upon our competitive position.





Since
      July 1, 2003, we have acquired three suppliers of BWA equipment. We intend
      to
      continue our strategy of expanding our business through, among other things,
      acquisitions of other businesses and technologies and joint ventures.
      Accordingly, we anticipate our future results of operation and financial
      condition may be directly or indirectly materially affected by our acquisition
      and joint venture effort. Acquisitions are inherently risky and our future
      growth may depend on our ability to successfully acquire, operate and integrate
      new businesses into our company.





Our
      revenue from the last three years and the first three months of 2008, shown
      below, details the transition from our legacy products to our WiMAX businesses,
      which has caused significant shifts in our revenue stream and fluctuations
      in
      revenues as the relative contribution of our WiMAX business increases. In
      addition, the sales cycle for new WiMAX customers is somewhat longer than for
      our legacy business, resulting in longer periods before revenues can be
      recognized from new WiMAX customers.





*Consolidated statement of operations data:*
            
            **Year ended December 31,**
            
            **Three**
              **months to**
              **March 30,**($ in thousands except per share data)
            
            **2005**
            
            **2006**
            
            **2007**
            
            **2008****(unaudited)**Revenue
                – WiMAX
            
            $
            4,489
            
            $
            45,753
            
            $
            64,277
            
            $
            13,356Revenue
                - Non-WiMAX
            
            
            106,477
            
            
            82,059
            
            
            30,693
            
            
            3,803Total
                Revenue
            
            
            110,966
            
            
            127,812
            
            
            94,970
            
            
            17,159Cost
                of revenue
            
            
            (79,467
            )
            
            (94,948
            )
            
            (70,134
            )
            
            (11,923
            )Gross
                profit
            
            
            31,499
            
            
            32,864
            
            
            24,836
            
            
            5,236Margin
            
            
            28
            %
            
            26
            %
            
            26
            %
            
            31
            %Total
                operating expenses
            
            
            48,510
            
            
            63,539
            
            
            55,865
            
            
            15,596Loss
                from operations
            
            
            (17,011
            )
            
            (30,675
            )
            
            (31,029
            )
            
            (10,360
            )Net
                interest and other income
            
            
            1,388
            
            
            1,227
            
            
            661
            
            
            358Loss
                before income taxes
            
            
            (15,623
            )
            
            (29,448
            )
            
            (30,368
            )
            
            (10,002
            )Income
                tax benefit/(provision)
            
            
            546
            
            
            246
            
            
            (94
            )
            
            (50
            )Net
                loss before deemed dividend
            
            
            (15,077
            )
            
            (29,202
            )
            
            (30,462
            )
            
            (10,052
            )Deemed
                dividend associated withpreferred
                stock
            
            
            -
            
            
            (9,179
            )
            
            (4,670
            )
            
            -Net
                loss attributable to common stockholders
            
            $
            (15,077
            )
            $
            (38,381
            )
            $
            (35,132
            )
            $
            (10,052
            )Net
                loss attributable to commonstockholders
                per share - basic and diluted
            
            $
            (0.39
            )
            $
            (0.96
            )
            $
            (0.77
            )
            $
            (0.17
            )Weighted
                average shares outstanding - basic and diluted
            
            
            38,736,939
            
            
            40,026,411
            
            
            45,387,386
            
            
            58,599,702




16




Cost
      of
      revenue consists of component and material costs, direct labor costs, warranty
      costs, royalties, overhead related to manufacture of our products and customer
      support costs. Our gross margin is affected by changes in our product mix both
      because our gross margin on base stations and related equipment is higher than
      the gross margin on subscriber terminals, and because our different product
      lines generate different margins. In addition, our gross margin is affected
      by
      changes in the average selling price of our systems and volume discounts granted
      to significant customers. We expect to derive an increasing proportion of our
      revenue in the future from the sale of our products through distribution
      channels.




**Critical
      Accounting Policies and Estimates**




Our
      Condensed Consolidated Financial Statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America.
      We review the accounting policies used in reporting our financial results on
      a
      regular basis. The preparation of these financial statements requires us to
      make
      estimates and judgments that affect the reported amounts of assets, liabilities,
      revenues and expenses and related disclosure of contingent assets and
      liabilities. On an ongoing basis, we evaluate our process used to develop
      estimates. We base our estimates on historical experience and on various other
      assumptions that are believed to be reasonable for making judgments about the
      carrying value of assets and liabilities that are not readily apparent from
      other sources. Actual results may differ from these estimates due to actual
      outcomes being different from those on which we based our assumptions.




Our
      significant accounting policies were described in Note 1 to our audited
      Consolidated Financial Statements included in our Annual Report on Form 10-K
      for
      the year ended December 31, 2007. With the exception of the items discussed
      in Note 8 in the accompanying Condensed Consolidated Financial Statements,
      there
      have been no significant changes to these policies and no recent accounting
      pronouncements or changes in accounting pronouncements during the three months
      ended March 30, 2008.





**Comparison
      of the quarter ended March 30, 2008 to the quarter ended April 1,
      2007**





Revenue




Revenue
      totaled $17.2 million for the quarter ended March 30, 2008, representing a
      36%
      decrease from the $26.7 million reported for the quarter ended April 1, 2007
      and
      a 28% decrease from the fourth quarter of 2007. The decline compared to the
      first quarter in 2007 was attributable mainly to a decline in non-WiMAX
      products. Non-WiMAX revenues decreased to $3.9 million in the quarter
      ending March 30, 2008 from $12.0 million in the quarter ending April 1, 2007.
      The decrease in the first quarter of 2008 compared to the fourth quarter of
      2007
      was attributable primarily to decreased sales of the WiMAX product line,
      recorded at $13.4 million of revenue in the quarter ended March 30, 2008,
      compared to $19.2 million in the quarter ended December 31, 2007. The first
      quarter historically has seasonally lower revenue than other
      quarters.





Geographically,
      in the first three months of 2008, approximately 30% of our revenue was derived
      from customers in Africa and the Middle East, 24% from customers in Mexico,
      Latin America and the Caribbean, 20% from customers in Europe, 14% from
      customers in the United States and Canada and 12% from customers in
      Asia.




17




During
      the first quarter 2008, more than 90 customers purchased WiMAX equipment from us
      compared with more than 80 customers during the first three months of
      2007.





Cost
      of
      Revenue




Cost
      of
      revenue decreased 35% to $11.9 million in the quarter ended March 30, 2008
      from
      $18.4 million in the quarter ended April 1, 2007 primarily due to decreased
      sales. The gross profit for the first quarter of 2008 was $5.2 million (31%
      of
      revenue) compared to a gross profit of $8.3 million (31% of revenue) for the
      first quarter of 2007 and decreased as compared to a gross profit for the fourth
      quarter of 2007 of $6.9 million (29% of revenue). The increase in gross margin
      percentage in the first quarter of 2008 as compared to the fourth quarter of
      2007 is primarily attributable to the impact of more revenue coming from
      products with higher product margins.





Research
      and Development Expenses




Research
      and development expenses increased 25% to $6.9 million in the quarter ended
      March 30, 2008 from $5.6 million in the quarter ended April 1, 2007, and
      remained flat from the fourth quarter of 2007. The increase year over year
      is
      primarily due to increased personnel costs as we continue to invest in
      development of WiMAX products.




Sales
      and
      Marketing Expenses




Sales
      and
      marketing expenses increased 26% to $4.2 million in the quarter ended March
      30,
      2008 from $3.4 million in the quarter ended April 1, 2007. Sales and marketing
      expenses for the first quarter of 2008 increased 10% relative to the $3.8
      million of sales and marketing expenses incurred in the fourth quarter of 2007.
      The increase as compared to the first quarter of 2007 is primarily attributable
      to additional headcount in 2008 and a higher level of agent commissions. The
      increase as compared to the fourth quarter of 2007 also reflects primarily
      increased headcount, trade show expenses and higher agent commissions in
      2008.





Bad
      Debt
      Provision




In
      the
      first quarter of 2008, we recorded bad debt provisions of $47 thousand relating
      to customer accounts for which management has determined that full recovery
      was
      unlikely. We recorded bad debt provisions of $0.2 million in the first quarter
      of 2007 and $0.2 million in the fourth quarter of 2007.





General
      and Administrative Expenses




General
      and administrative expenses decreased 2% to $4.1 million in the quarter ended
      March 30, 2008 from $4.2 million in the quarter ended April 1, 2007 and
      increased 11% from $3.7 million in the fourth quarter of 2007. The
      decrease from the first quarter of 2007 was primarily attributable to severance
      costs included in 2007. The increase in these expenses over the last quarter
      of
      2007 was primarily due to audit and other professional fees which were incurred
      in the first quarter of 2008.




Amortization
      of Intangibles




We
      recorded amortization of intangibles expense of $0.2 million in the first
      quarter of 2008 compared with amortization of intangibles expense of $0.2
      million for the first quarter of 2007. The amortization expense arises primarily
      as a result of our acquisition of intangible assets in connection with the
      ArelNet and Radionet acquisitions in June and November 2005,
      respectively.




18




Interest
      Income, Net




At
      March
      30, 2008, the outstanding principal and accrued interest payable on loans made
      to us by the Finnish Funding Agency for Technology and Innovation, (the “Tekes
      Loans”) was $2.0 million. We also had outstanding borrowings under the bank line
      of credit for $7.5 million. In the first quarter of 2008, we incurred interest
      expense of $0.1 million on these loans compared to interest expense of $23
      thousand in the first quarter of 2007.  Interest
      income did not change materially in the first quarter of 2008 compared to
      2007.





Other
      Income, Net





Other
      income, net increased primarily due to foreign exchange gains in 2008 on assets
      in currencies other than the US dollar.





Net
      Loss




For
      the
      reasons described above, we incurred a net loss of $10.1 million, or $(0.17)
      per
      share, in the quarter ended March 30, 2008, compared to a net loss of $5.1
      million, or $(0.13) per share, for the quarter ended April 1, 2007.




**Liquidity
      and Capital Resources**





As
      of
      March 30, 2008 we had cash, cash equivalents, short-term investments and current
      restricted cash of $34.0 million, as compared to $36.7 million at December
      31,
      2007. As of March 30, 2008, this consisted of cash and cash equivalents totaling
      $30.8 million, short-term investments totaling $2.7 million and $0.5 million
      of
      restricted cash in current assets. In addition, we had restricted cash of $1.2
      million in other non-current assets. We have no material capital
      commitments.




Since
      inception, we have financed our operations through private sales of convertible
      preferred stock, public offerings of common stock and a secured bank line of
      credit.





On
      August
      7, 2007, we and our wholly-owned subsidiary, Airspan Communications Limited,
      entered into an amendment to our August 1, 2006 Loan and Security Agreement
      (the
“Loan and Security Agreement”) with Silicon Valley Bank (“SVB”), with respect to
      a revolving credit line. For the term of the credit line, which expires on
      December 31, 2008, we may, subject to certain adjustments, borrow up to the
      lesser of (i) $20 million and (ii) 80% of eligible accounts receivable. As
      of
      March 30, 2008, $4.0 million of available credit was unused. We are currently
      using the credit line and we expect to continue to use it for the remainder
      of
      2008. Although we believe the credit facility will increase our financial
      resources and financial flexibility, our use of the credit facility does present
      certain risks. Our ability to borrow under the credit facility is a function
      of,
      among other things, our base of eligible accounts receivable and the rate at
      which advances are made against eligible receivables (the “Advance Rate”). If
      the amount or quality of our accounts receivable deteriorates or the Advance
      Rate or eligibility criteria are adjusted adversely by SVB, our ability to
      borrow under the credit facility will be directly, negatively affected. If
      there
      is an adverse adjustment in the borrowing base at a time when we are unable
      to,
      within three business days, repay SVB the amount by which the borrowing base
      has
      been decreased, we will likely be in default under the Loan and Security
      Agreement. In addition, the credit facility requires us to satisfy certain
      financial covenants, including the maintenance of tangible net worth. As of
      March 30, 2008, the tangible net worth requirement was $44.0 million. The
      Company was in compliance with all of the financial covenants at March 30,
      2008.
      There is no assurance the Company will be able to meet this covenant in future
      quarters as required by the Loan and Security Agreement. In the event the
      Company is unable to meet this test in the future, we would plan to seek an
      amendment or waiver of this covenant. There can be no assurance that any such
      waiver or amendment would be granted. As a result, we cannot provide any
      assurance that we will be able to borrow under the Loan and Security Agreement
      at a time when we most need money to fund working capital or other needs and
      prohibit us from paying dividends on our capital stock. The credit facility
      also
      contains various provisions that restrict our use of cash and operating
      flexibility. These provisions could have important consequences for us,
      including (i) causing us to use a portion of our cash flow from operations
      for
      debt repayment and/or service rather than other perceived needs, (ii) precluding
      us from incurring additional debt financing for future working capital or
      capital expenditures and (iii) impacting our ability to take advantage of
      significant, perceived business opportunities, such as acquisition opportunities
      or to react to market conditions. Our failure to meet financial and other
      covenants could give rise to a default under the Loan and Security Agreement.
      In
      the event of an uncured default, the Loan and Security Agreement provides that
      all amounts owed to SVB are immediately due and payable and that SVB has the
      right to enforce its security interest in our assets. The Loan and Security
      Agreement is secured by collateral, including all of our rights and interests
      in
      substantially all of our personal property, including accounts receivable,
      inventory, equipment, general intangibles, intellectual property, books and
      records, contract rights and proceeds of the above items. At March 30, 2008,
      $7.5 million of indebtedness was outstanding under the Loan and Security
      Agreement. Advances under the Loan and Security Agreement bear interest at
      SVB's
      prime rate plus a percentage ranging from 0.0% to 1.75%, depending on certain
      financial and collateral tests. The monthly interest is calculated based on
      the
      higher amount of outstanding borrowings or $7.5 million. We have issued $2.3
      million of letters of credit under the facility, which were still outstanding
      at
      March 30, 2008.




19




For
      the
      three months ended March 30, 2008, we used $2.3 million of cash for operating
      activities, compared with an operating cash outflow of $1.1 million for the
      three months ended April 1, 2007. The operating cash outflow for the first
      three
      months of 2008 was primarily a result of the:




·
                net
                    loss of $10.1 million;


·
            decrease
                of $2.1 million in deferred revenue;
                and


·
            decrease
                of $2.9 million in accounts
                payable.





The
      cash
      outflow was offset by:


·
            decrease
                of $10.2 million in receivables.





Days
      sales outstanding were at 108 days at the end of the first quarter 2008, down
      from 111 days at the end of 2007. The change from the end of 2007 to the end
      of
      the first quarter of 2008 reflects the lower revenue level in the most recent
      period and the collection of larger amounts of receivables in the first quarter.
      Inventory turns were 3.6 for the first quarter of 2008, compared with 5.3 for
      the fourth quarter of 2007. The change in inventory turns is primarily
      attributable to the lower cost of sales in the first quarter.





The
      net
      cash provided by investing activities for the three months ended March 30,
      2008
      was $2.3 million. The investing cash inflow for the first three months of 2008
      resulted from $2.9 million of net sales of investment securities less $0.6
      million of fixed asset purchases.





Our
      net
      cash provided by financing activities for the three months ended March 30,
      2008
      was $0.1 million from the exercise of stock options.





As
      of
      March 30, 2008, our material commitments consisted of obligations on operating
      leases, repayment of principal and interest owed on the Tekes loans and purchase
      commitments to our manufacturing subcontractors. These purchase commitments
      totaled $11.9 million at March 30, 2008 and $39.6 million at April 1,
      2007.





We
      have
      explored and may in the future explore and pursue other perceived opportunities
      to acquire wireless access and related businesses. We may seek to acquire such
      businesses through a variety of different legal structures and may utilize
      cash,
      common stock, preferred stock, other securities or some combination thereof
      to
      finance the acquisition. In connection with such activities, we are subject
      to a
      variety of risks, a number of which are described further in the Company’s Form
      10-K for the fiscal year ended December 31, 2007 and this Form 10-Q for the
      quarter ended March 30, 2008. There can be no assurances that our efforts to
      acquire other businesses will be successful.





We
      have
      raised equity in the past and may in the future seek to raise additional equity
      or debt capital to assist us in financing an acquisition and/or our on-going
      business operations or those of any business that we may in the future acquire.
      Among other securities, we may seek to sell additional shares of common stock,
      or shares of an existing or newly designated class of preferred stock or debt
      securities. We have not, as of the date of this report, entered into any
      definitive financing arrangements other than those described above. There can
      be
      no assurances that we will be able to secure equity or debt capital in amounts
      and on terms acceptable to us. Although we will seek to secure financing on
      terms and conditions favorable to the Company and its existing shareholders,
      we
      may seek to raise capital by issuing securities, which, under certain
      circumstances, enjoy certain preferences and/or priorities relative to the
      common stock.




20




On
      April 25, 2008, the Company received a letter from the Nasdaq Stock Market
      (the “Notice”) notifying the Company that for the 30 consecutive trading days
      preceding the date of the Notice, the bid price of the Company’s common stock
      had closed below the $1.00 per share minimum required for continued listing
      on
      The Nasdaq Global Market pursuant to Nasdaq Marketplace Rule 4450(a)(5) (the
      "Rule"). The Notice also stated that pursuant to Nasdaq Marketplace
      Rule 4450(e)(2), the Company has been provided 180 calendar days, or until
      October 22, 2008, to regain compliance. To do so, the bid price of the
      Company’s common stock must close at or above $1.00 per share for a minimum of
      ten consecutive trading days prior to that date. The Company intends to monitor
      the bid price for its common stock and consider options available to the Company
      to achieve compliance with the continued listing standards of
      Nasdaq.




Until
      we
      are able to generate positive cash flow from operations, if ever, we intend
      to
      use our existing cash resources and the Loan and Security Agreement, if
      available, together with, depending on market conditions and opportunities,
      the
      net proceeds of equity financings to finance our operations. We currently
      believe we will have sufficient cash resources to finance our operations for
      at
      least the next twelve months.




**Item
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK**




Interest
      Rate Risk




The
      Company’s earnings are affected by changes in interest rates. As of March 30,
      2008 and December 31, 2007, we had cash, cash equivalents, short term
      investments and restricted cash of $34.0 million and $36.7 million,
      respectively. These amounts consisted of highly liquid investments, with more
      than 89% having purchase to maturity terms of 90 days or less. The balance
      has
      maturity terms of between 94 to 230 days. These investments are exposed to
      interest rate risk, but a hypothetical increase or decrease in market interest
      rates by two percentage points from March 30, 2008 rates would cause the fair
      market value of these short-term investments to change by an insignificant
      amount. Due to the short duration of these investments, a short-term increase
      in
      interest rates would not have a material effect on our financial condition
      or
      results of operations. Declines in interest rates over time would, however,
      reduce our interest income. Due to the uncertainty of the specific actions
      that
      would be taken to mitigate this, and their possible effects, the sensitivity
      analysis does not take into account any such action.




Foreign
      Currency Exchange Rate Risk




For
      the
      three months ended March 30, 2008, 91% of our sales were denominated in U.S.
      dollars, 4% were denominated in pounds sterling, 3% were denominated in
      Australian dollars and 2% were denominated in euros. Comparatively, for the
      three months ended April 1, 2007, 82% of our sales were denominated in U.S.
      dollars, 13% were denominated in euro and 5% were denominated in Australian
      dollars. Our total pounds sterling denominated sales for the three months ended
      March 30, 2008 were $0.6 million, which were recorded at an average exchange
      rate of $1US = GBP £0.50437. Our total Australian dollar denominated sales for
      the three months ended March 30, 2008 were $0.5 million, which were recorded
      at
      an average exchange rate of $1US = AUS$1.1059. Our total euro denominated sales
      for the three months ended March 30, 2008 were $0.3 million, which were recorded
      at an average exchange rate of $1US = €0.6725. If the average exchange rates
      used had been higher or lower during the three month period ended March 30,
      2008
      by 10%, they would have decreased or increased the total pounds sterling,
      Australian dollar and euro-denominated sales value by a total of $0.1 million.
      We expect the proportions of sales in euro and Australian dollars to fluctuate
      over time. The Company’s sensitivity analysis for changes in foreign currency
      exchange rates does not take into account changes in sales volumes.




For
      the
      three months ended March 30, 2008, we incurred the majority of our cost of
      revenue in US dollars.




The
      Company’s operating results are affected by movements in foreign currency
      exchange rates against the US dollar, particularly the UK pound sterling and
      New
      Israeli Shekel. This is because most of our operating expenses, which may
      fluctuate over time, are incurred in pounds sterling and New Israeli Shekels.




21




During
      the three months ended March 30, 2008, we paid expenses in local currency of
      approximately 5.0 million pounds sterling, at an average rate of $1US = 0.50437
      pounds sterling. During the three months ended March 30, 2008, we paid expenses
      in local currency of approximately 15.7 million Israeli Shekels, at an average
      rate of $1US = 3.6969 Shekels. If the average exchange rates for pounds sterling
      and Israeli Shekels had been higher or lower for the three month period ended
      March 30, 2008 by 10%, the total pounds sterling and Israeli Shekel denominated
      operating expenses would have decreased or increased by $0.9 million and $0.4
      million, respectively.





We
      expect
      the proportions of operating expenses paid in pounds sterling and Israeli
      Shekels to fluctuate over time.




We
      do not
      enter into any currency hedging activities for speculative purposes.




Equity
      Price Risk




We
      do not
      own any equity investments, other than the shares of our subsidiaries. As a
      result, we do not currently have any direct equity price risk.





Commodity
      Price




We
      do not
      enter into contracts for the purchase or sale of commodities. As a result,
      we do
      not currently have any direct commodity price risk.




**Item
      4. CONTROLS AND PROCEDURES**





As
      of the
      end of the period covered by this quarterly report, an evaluation was performed
      under the supervision and with the participation of our management, including
      our Chief Executive Officer and Chief Financial Officer, of the effectiveness
      of
      the design and operation of our disclosure controls and procedures (as defined
      in Section 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934,
      as
      amended). Based on that evaluation, and the similar evaluation undertaken at
      the
      end of 2007, the Chief Executive Officer and Chief Financial Officer concluded
      that as of March 30, 2008, our disclosure controls and procedures were
      effective.





There
      have been no changes in the Company’s internal controls over financial reporting
      that occurred during the Company’s first quarter of 2008 that have materially
      affected or are reasonably likely to materially affect, the Company’s internal
      control over financial reporting.




**Part
      II OTHER INFORMATION**





**Item
      1. LEGAL PROCEEDINGS**




On
      and
      after July 23, 2001, three Class Action Complaints were filed in the United
      States District Court for the Southern District of New York naming as defendants
      Airspan, and certain current or former officers and directors (referred to
      herein as the “Individual Defendants”) together with certain underwriters of our
      July 2000 initial public offering. A Consolidated Amended Complaint, which
      is
      now the operative complaint, was filed on April 19, 2002. The complaint alleges
      violations of Sections 11 and 15 of the Securities Act of 1933 and Sections
      10(b) and 20(a) of the Securities Exchange Act of 1934 for issuing a
      Registration Statement and Prospectus that contained materially false and
      misleading information and failed to disclose material information. In
      particular, the plaintiffs allege that the underwriter-defendants agreed to
      allocate stock in our initial public offering to certain investors in exchange
      for excessive and undisclosed commissions and agreements by those investors
      to
      make additional purchases of stock in the aftermarket at pre-determined prices.
      The action seeks damages in an unspecified amount.




22




This
      action is being coordinated with approximately three hundred nearly identical
      actions filed against other companies. On October 9, 2002, the Court dismissed
      the Individual Defendants from the case without prejudice. This dismissal
      disposed of the Section 15 and 20(a) control person claims without prejudice.
      On
      February 19, 2003, the Court dismissed the Section 10(b) claim against us,
      but
      allowed the Section 11 claim to proceed. On December 5, 2006, the Second Circuit
      vacated a decision by the district court granting class certification in six
      of
      the coordinated cases, which are intended to serve as test, or “focus,” cases.
 The plaintiffs selected these six cases, which do not include Airspan. The
      district court’s decisions in the six focus cases are intended to provide strong
      guidance for the parties in the remaining cases. On April 6, 2007, the Second
      Circuit denied a petition for rehearing filed by the plaintiffs, but noted
      that
      the plaintiffs could ask the district court to certify more narrow classes
      than
      those that were rejected.




On
      August
      14, 2007, the plaintiffs filed amended complaints in the six focus cases. The
      amended complaints include a number of changes, such as changes to the
      definition of the purported class of investors. On September 27, 2007, the
      plaintiffs moved to certify classes in the six focus cases. The six focus case
      issuers and the underwriters named as defendants in the focus cases filed
      motions to dismiss the amended complaints against them. On March 26, 2008,
      the
      District Court dismissed the Section 11 claims of those members of the putative
      classes in the focus cases who sold their securities for a price in excess
      of
      the initial offering price and those who purchased outside the previously
      certified class period. With respect to all other claims, the motions to dismiss
      were denied. We are awaiting a decision from the Court on the class
      certification motion. Due to the inherent uncertainties of litigation, we cannot
      accurately predict the ultimate outcome of the matter.  We cannot predict
      whether we will be able to renegotiate a settlement that complies with the
      Second Circuit’s mandate, nor can we predict the amount of any such settlement
      and whether that amount would be greater than Airspan’s insurance
      coverage.  If Airspan is found liable, we are unable to estimate or predict
      the potential damages that might be awarded, whether such damages would be
      greater than Airspan’s insurance coverage and whether such damages would have a
      material impact on our results of operations or financial condition in any
      future period.




On
      October 9, 2007, a purported  Airspan  shareholder
      filed a complaint for violation of Section 16(b) of the Securities Exchange
      Act of 1934, which prohibits short-swing trading, against the Company's IPO
      underwriters. The complaint, Vanessa Simmonds v.  Credit
      Suisse Group, et al., Case No. C07-01638, filed in District Court for the
      Western District of Washington, seeks the recovery of short-swing
      profits. The Company is named as a nominal defendant. No recovery is
      sought from the Company.




We
      and
      other WiMAX manufacturers have received letters from Wi-LAN raising various
      patent infringement claims and offering licenses of various Wi-LAN patents.
      We
      received a letter, dated November 9, 2006, offering us licenses of various
      Wi-LAN patents. After reviewing Wi-LAN’s claims, on February 1, 2007, we sent a
      letter to Wi-LAN notifying them that we did not believe that we require a
      license from Wi-LAN. On May 29, 2007, we received a follow up letter and
      materials from Wi-LAN which continued to assert those claims.  Once
      again the Company has carefully reviewed this matter, and in consultation with
      its patent counsel sent a further letter on January 30, 2008 declining Wi-LAN’s
      offer to license their patents. However, Wi-LAN continues to assert its claims
      and there can be no assurance as to the ultimate outcome of this
      matter.




Except
      as
      set forth above, we are not currently subject to any other material legal
      proceedings. We may from time to time become a party to various other legal
      proceedings arising in the ordinary course of our business.




**Item
      1A.****RISK
      FACTORS**




Except
      for the risk factors set forth below, there have been no material changes to
      the
      risk factors disclosed in Item 1A of Part 1 of the Company’s Annual Report on
      Form 10-K for the fiscal year ended December 31, 2007.




23




***The
      holders of our Series B preferred stock are entitled to a liquidation preference
      $290.00 per share of Series B preferred stock on any liquidation or sale of
      the
      Company before holders of our common stock receive any cash or other
      distribution (in such a liquidation or sale).***




There
      are
      currently outstanding 200,690 shares of Series B preferred stock. The holders
      of
      our Series B preferred stock are entitled to a liquidation preference of $290.00
      per share of Series B preferred stock on voluntary or involuntary liquidation
      of
      our Company before any payment of cash or distribution of other property may
      be
      made to the holders of our common stock, or any other class or series of stock
      subordinate in liquidation preference to the Series B preferred stock. However,
      if the holders of the Series B preferred stock would receive a greater return
      in
      a liquidation by converting their shares of Series B preferred stock into common
      stock, then the Series B preferred stock will be deemed to be automatically
      converted into common stock immediately before the effectiveness of the
      liquidation. For this purpose a “liquidation” is deemed to include the following
      transactions unless our shareholders approve a proposal that such transaction
      shall not be treated as a liquidation: (i) any liquidation, dissolution, or
      winding-up of the affairs of the Company, or (ii) unless, at the request of
      the
      Company, the holders of at least a majority of the Series B preferred stock
      then
      outstanding determine otherwise, (a) the merger, reorganization or consolidation
      of the Company into or with another entity, unless, as a result of such
      transaction the holders of our outstanding securities immediately preceding
      such
      merger, reorganization or consolidation own (in approximately the same
      proportions, relative to each other, as immediately before such transaction)
      at
      least a majority of the voting securities of the surviving or resulting entity
      or the direct or indirect parent of such entity, (b) the sale, transfer or
      lease
      of all or substantially all the assets of the Company, (c) the sale, transfer
      or
      lease (but not including a transfer or lease by pledge or mortgage to a bona
      fide lender), of all or substantially all the assets of any of the Company’s
      subsidiaries the assets of which constitute all or substantially all of the
      assets of the Company and such subsidiaries taken, as a whole, or the
      liquidation, dissolution or winding-up of such of the Company’s subsidiaries the
      assets of which constitute all or substantially all of the assets of the Company
      and such subsidiaries taken as a whole, or (d) any transaction or series of
      related transactions in which securities of the Company representing 50% or
      more
      of the combined voting power of the Company’s then outstanding voting securities
      are acquired by any person, entity or group.




Therefore,
      upon any liquidation of the Company, certain mergers, reorganizations and/or
      consolidations of the Company into or with another corporation, the sale by
      us
      of all or substantially all of our assets or any transaction or series of
      related transactions in which a person, entity or group acquires 50% or more
      of
      the combined voting power of our then-outstanding securities, the holders of
      the
      Series B preferred stock will have a claim against our assets senior to the
      claim of the holders of common stock in an amount equal to $290.00 per share
      of
      Series B preferred stock (as appropriately adjusted for any combinations,
      divisions, or similar recapitalizations affecting the Series B preferred stock
      after issuance).




For
      example, if the Company were to be acquired in a merger, acquisition,
      consolidation or sale of assets, the holders of the Series B preferred
      stock would be entitled to receive $290.00 per share of Series B preferred
      stock
      in the acquisition transaction unless they (i) determined to convert their
      shares into common stock or (ii) the Series B shareholders approve a
      proposal that the acquisition transaction not be treated as a liquidation.
      There
      are currently 200,690 shares of Series B preferred stock outstanding. As a
      result, the holders of the Series B preferred stock would be entitled to
      receive $58.2 million before the holders of common stock receive any amounts
      in
      such a transaction (assuming no conversion of Series B preferred stock
      prior to the transaction). This could result in the holders of the Series B
      preferred stock receiving substantially more, on a common share equivalent
      basis, than holders of our common stock in such a transaction.




***If
      our stock price falls below $1.00 per share, our common stock may be de-listed
      from the NASDAQ Global Market.***





On
      April 25, 2008, Airspan Networks Inc. (the “Company”) received a letter
      from the Nasdaq Stock Market (the “Notice”) notifying the Company that for the
      30 consecutive trading days preceding the date of the Notice, the bid price
      of
      the Company’s common stock had closed below the $1.00 per share minimum required
      for continued listing on The Nasdaq Global Market pursuant to Nasdaq Marketplace
      Rule 4450(a)(5) (the "Rule"). The Notice also stated that pursuant to Nasdaq
      Marketplace Rule 4450(e)(2), the Company has been provided 180 calendar
      days, or until October 22, 2008, to regain compliance. To do so, the bid
      price of the Company’s common stock must close at or above $1.00 per share for a
      minimum of ten consecutive trading days prior to that date.




If
      compliance with the minimum bid requirement cannot be demonstrated by
      October 22, 2008, the Company may apply to transfer its securities to the
      Nasdaq Capital Market provided the Company meets the initial listing criteria
      as
      set forth in Marketplace Rule 4310(c). If the Company meets the other
      initial listing criteria and the Company’s application is approved, it will be
      notified that it has been granted an additional 180 calendar day compliance
      period. If the Company is not eligible for an additional compliance period,
      the
      Nasdaq Capital Market will provide written notification that the Company’s
      securities will be delisted.




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The
      Company intends to monitor the bid price for its common stock and consider
      options available
      to the Company to achieve compliance with the continued listing standards of
      Nasdaq.




If
      our
      common stock is to be de-listed from the NASDAQ Global Market, we may apply
      to
      have our common stock listed on the NASDAQ Capital Market. In the event that
      such application is accepted, of which there can be no assurance, we anticipate
      the change in listings may result in a reduction in some or all of the
      following, each of which could have a material adverse effect on our investors:




·
            the
                liquidity of our common stock;


·
            the
                market price of our common stock;


·
            the
                number of institutional investors that will consider investing in
                our
                common stock;


·
            the
                number of investors in general that will consider investing in our
                common
                stock;


·
            the
                number of market makers in our common
                stock;


·
            the
                availability of information concerning the trading prices and volume
                of
                our common stock;


·
            the
                number of broker-dealers willing to execute trades in shares of our
                common
                stock; and


·
            our
                ability to obtain financing for the continuation of our
                operations.




Should
      our application to the NASDAQ Capital Market be rejected when made or if we
      fail
      to continue to satisfy the NASDAQ Capital Market’s continued listing
      requirements, our common stock could be delisted entirely or relegated to
      trading on the over-the-counter-market.




***An
      inability to overcome competition from alternative communication systems could
      adversely affect our results of operations.***




We
      already face, and may increasingly encounter, competition from competing
      wireless technologies, such as cellular technology, that are constantly
      improving. Cellular networks are now capable of delivering both voice and
      broadband data connectivity to fixed, mobile, nomadic and portable applications.
      These technologies, such as 1XRTT and EVDO, have the ability to provide for
      multiple voice channels and rate data services at transmission rates of 512Kbps
      on the uplink and 2.4 Mbps on the down link. Their data rates speeds continue
      to
      improve as they are modified. In addition, our technology competes with other
      high-speed solutions, such as wired DSL, cable networks, fiber optic cable
      and
      occasionally satellite technologies. Our products compete with alternative
      communications systems on the basis of reliability, price and functionality.
      For
      example, the performance and coverage area of our wireless systems are dependent
      on certain factors that are outside of our control, including features of the
      environment in which the systems are deployed, such as the amount of clutter
      (natural terrain features and man-made obstructions) and the radio frequency
      available. Depending on specific customer needs, these obstacles may make our
      technology less competitive in comparison with other technologies and make
      other
      technologies less expensive or more suitable. Our business may also compete
      in
      the future with products and services based on other wireless technologies,
      including LTE (Third Generation Partnership Project: Long Term Evolution) an
      OFDM cellular technology, and other technologies that have yet to be
      developed.




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**Item
      6. EXHIBITS**




**31.1**
            **Certification
                of the Chief Executive Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002*****31.2**
            **Certification
                of the Chief Financial Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002*****32.1**
            **Certification
                of the Chief Executive Officer pursuant to section 906 of the
                Sarbanes-Oxley Act of 2002******32.2**
            **Certification
                of the Chief Financial Officer pursuant to section 906 of the
                Sarbanes-Oxley Act of 2002****





*****
            **Filed
                herewith********
            **Furnished
                herewith**




**SIGNATURES**




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




**AIRSPAN
                NETWORKS, INC.**Date: May
                7, 2008
            By:
            /s/ DAVID
                BRANTName:  
                David BrantTitle:    
                Chief Financial Officer




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