**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**Form
      10-KSB/A**


(Amendment
      No. 1)




(Mark
      One)





x
                ANNUAL
                    REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                    OF1934


For
      the
      fiscal year ended December 31, 2007





OR





o
                TRANSITION
                    REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF
                    1934


For
      the
      transition period from_______to_______





Commission
      file number 001-33449





TOWERSTREAM
      CORPORATION


(Name
      of
      small business issuer in its charter)




**Delaware**
              (State
                or Other Jurisdiction of Incorporation or Organization)
            
            **20-8259086**
              (I.R.S.
                Employer Identification No.)**55
                Hammarlund Way**
              **Middletown,
                Rhode Island**
              (Address
                of principal executive offices)
            
            **02842**
              (Zip
                Code)





Issuer’s
      telephone number **(401)
      848-5848**





Securities
      registered under Section 12(b) of the Exchange Act:





Title
                of each class
            
            Name
                of each exchange on which registeredCommon
                Stock, par value $0.001 per share
            
            The
                NASDAQ Stock Market LLC





Securities
      registered under Section 12(g) of the Exchange Act: None





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act o





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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 x No
o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. 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





The
      revenues for the year ended December 31, 2007, the most recent fiscal year,
      were
      $6,883,343.





As
      of
      March 12, 2008, the aggregate market value of the voting and non-voting common
      equity held by non-affiliates was $46,297,945 (based on the last sales price
      of
      the issuer’s common stock on March 12, 2008).





34,537,718
      shares of Common Stock, par value $0.001 per share, were outstanding as of
      March
      12, 2008.




Transitional
      Small Business Disclosure Format (Check one): Yes o No
x







**EXPLANATORY
        NOTE**
 
 We
        are
        filing this Amendment No. 1 on Form 10-KSB/A to our Annual Report on Form
        10-KSB
        for the fiscal year ended December 31, 2007, as originally filed with the
        Securities and Exchange Commission (the “Commission”) on March 19, 2008 (the
“Original Filing”), for the sole purpose of including the information required
        by Part III. This information was permitted to have been incorporated by
        reference from our definitive proxy statement for our 2008 annual meeting
        of
        stockholders, if such proxy statement had been filed with the Commission
        within
        120 days of our 2007 fiscal year-end.
 
 As
        a
        result of this Amendment No. 1, we are also filing as exhibits the
        certifications required under Section 302 and Section 906 of the Sarbanes-Oxley
        Act of 2002.
 
 This
        Amendment No. 1 does not change any of the information contained in the Original
        Filing. This Amendment No. 1 continues to speak as of the date of the Original
        Filing and we have not updated or amended the disclosures contained therein
        to
        reflect events that have occurred since the date of the Original Filing.
        Accordingly, this Amendment No. 1 should be read in conjunction with our
        filings
        made with the Commission subsequent to the date of the Original
        Filing.


**PART
      III**





**Item
      9. Directors, Executive Officers, Promoters, Control Persons and Corporate
      Governance; Compliance With Section 16(a) of the Exchange
      Act.**


**Directors
        and Executive Officers**
  The
        following table sets forth the names, ages, and positions of our current
        directors and executive officers. Our directors hold office for one-year
        terms
        until the following annual meeting of stockholders and until his or her
        successor has been elected and qualified or until the director’s earlier
        resignation or removal. Officers are elected annually by the Board of Directors
        and serve at the discretion of the Board.
  Name
              Age
              PositionJeffrey
                  M. Thompson
              43
              President,
                  Chief Executive Officer and DirectorPhilip
                  Urso
              48
              Chairman
                  of the Board of DirectorsMaria
                  Perry
              45
              Interim
                  Chief Financial OfficerArthur
                  G. Giftakis
              42
              Vice
                  President of Engineering and OperationsHoward
                  L. Haronian, M.D.(1)(2)(3)
              46
              DirectorPaul
                  Koehler(1)(3)
              48
              DirectorWilliam
                  Bush(1)(2)
              43
              Director
 (1)
        Member of our Audit Committee.
 (2)
        Member of our Compensation Committee.
 (3)
        Member of our Nominating Committee.
  ***Jeffrey
        M. Thompson*** has
        been
        our president, chief executive officer and director since January
        2007. Mr.
        Thompson co-founded Towerstream in December 1999 with Philip Urso. Mr. Thompson
        has served as a director since inception and as chief operating officer from
        inception until November 2005 when Mr. Thompson became president and chief
        executive officer. In 1995, Mr. Thompson co-founded and was vice president
        of
        operations of EdgeNet Inc., a privately held Internet service provider (which
        was sold to Citadel Broadcasting Corporation in 1997 and became eFortress
        (“eFortress”)) through 1999. Mr. Thompson holds a B.S. from the University of
        Massachusetts.
 
 ***Philip
        Urso*** has been
        our chairman and a director since January 2007. Mr.
        Urso
        co-founded Towerstream in December 1999 with Jeffrey Thompson. Mr. Urso has
        served as a director and chairman since inception and as chief executive
        officer
        from inception until July 2005. In 1995, Mr. Urso co-founded eFortress
        (previously EdgeNet Inc.) and served as its president through 1999. From
        1983
        until 1997, Mr. Urso owned and operated a group of radio stations. In addition,
        Mr. Urso co-founded the regional cell-tower company, MCF Communications,
        Inc.
 
 ***Maria
        Perry*** has been
        our interim chief financial officer since December 2007. Ms. Perry served
        as our
        controller from April 2007 to December 2007. Prior thereto, from August 1998
        to
        January 2007, Ms. Perry ran an independent consulting practice which provided
        accounting, financial and advisory services to private and public companies.
        Prior thereto, from July 1996 to July 1998, Ms. Perry was the director of
        business analysis and controller-worldwide finance for the Stanley-Bostitch
        division of The Stanley Works (NYSE: SWK). Ms. Perry also served as controller
        for The Holson Burnes Group, a former Bain Capital portfolio company, from
        November 1990 to June 1996. Ms. Perry began her career as an auditor for
        Deloitte, Haskins & Sells. **** Ms.
        Perry
        graduated from the University of Delaware with a B.S. in Accounting and received
        her M.B.A in Finance from the University of Chicago. Ms. Perry is a licensed
        Certified Public Accountant.
  ***Arthur
        G. Giftakis*** has been
        our vice president of engineering and operations since January 2007. Mr.
        Giftakis has served as vice president of engineering and operations of
        Towerstream since 2004. From 2003 until 2004, Mr. Giftakis was manager of
        engineering and prior to that, Mr. Giftakis was at Sockeye Networks, Inc.,
        a
        border gateway protocol optimization company that was acquired by Internap
        Network Services Corporation in 2003. Before joining Sockeye Networks, Inc.
        in
        2001, Mr. Giftakis held various solution architect positions at NaviSite,
        Inc.
        and Digital Broadband Communications Inc. after spending ten years with Bell
        Atlantic Corp., now known as Verizon Communications Inc.
  1
  ***Howard
        L. Haronian, M.D.*** has
        been
        a director since January 2007. Dr.
        Haronian has served as a director of Towerstream since inception in December
        1999. Dr. Haronian is an interventional cardiologist and has been president
        of
        Cardiology Specialists, Ltd. of Rhode Island since 1994. Dr. Haronian has
        served
        on the clinical faculty of the Yale School of Medicine since 1994. Dr. Haronian
        has directed the cardiac catheterization program at Westerly Hospital since
        founding such program in 2003.
  ***Paul
        Koehler*** has
        been
        a director since January 2007. Mr. Koehler has served as vice president of
        corporate development of Pacific Ethanol, Inc. (NasdaqGM: PEIX) since June
        2005.
        Mr. Koehler has over twenty years of experience in project development in
        the
        power and renewable fuels industries and in marketing, trading and risk
        management. Prior to working for Pacific Ethanol Inc., from 2001 to 2005,
        Mr.
        Koehler worked initially as a consultant and then as director of business
        development at PPM Energy Inc., a wind power producer and marketer. Mr. Koehler
        was president and co-founder of Kinergy Corporation, a consulting firm focused
        on renewable energy and risk management from 1993 to 2003 and a co-founder
        of
        ReEnergy LLC, which was acquired by Pacific Ethanol, Inc. During the 1990s,
        Mr.
        Koehler worked for Portland General Electric Company and Enron Corp. in
        marketing and origination of long term transactions, risk management, and
        energy
        trading. Mr. Koehler holds a B.A. from the Honors College at the University
        of
        Oregon.
  ***William
        Bush*** has been
        a director since January 2007. From January 2006 through December 2007, Mr.
        Bush
        served as chief financial officer of ZVUE Corporation (formerly known as
        Handheld Entertainment, Inc. (NasdaqCM: ZVUE)), a distributor of user generated
        content. Mr. Bush has over twenty years of experience in accounting, financial
        support and business development. From 2002 to 2005, Mr. Bush was the chief
        financial officer and secretary for International Microcomputer Software,
        Inc.
        (OTCBB: IMSI.OB), a developer and distributor of precision design software,
        content and on-line services. Prior to that he was a director of business
        development and corporate controller for Buzzsaw.com, Inc. Mr. Bush was one
        of
        the founding members of Buzzsaw.com, Inc., a privately held company spun
        off
        from Autodesk, Inc. in 1999, focusing on online collaboration, printing and
        procurement applications. From 1997 to 1999, Mr. Bush worked as corporate
        controller at Autodesk, Inc. (NasdaqGM: ADSK), the fourth largest software
        applications company in the world. Prior to that, Mr. Bush worked for seven
        years in public accounting, first with Ernst & Young, and later with Price
        Waterhouse in Munich, Germany. Mr. Bush holds a B.S. in Business Administration
        from U.C. Berkeley and is a Certified Public Accountant. Mr. Bush currently
        serves on the board of directors of FindEx.com (OTCBB: FIND), a Bible study
        software provider.
 
 Except
        for Howard L. Haronian and Philip Urso, who are cousins, there are no family
        relationships among our directors or executive officers.
  **Board
        Committees**
  Since
        January 2007, the standing committees of our Board of Directors consist of
        an
        Audit Committee, a Compensation Committee and a Nominating Committee. Each
        member of our committees is “independent” as such term is defined under and
        required by the federal securities laws and the rules of The NASDAQ Stock
        Market. The charters of each of the committees is available on our website
        at www.towerstream.com .
  ***Audit
        Committee***
  The
        Audit
        Committee is comprised of three directors: William Bush, Howard L. Haronian,
        M.D., and Paul Koehler. William Bush is the Chairman of the Audit Committee.
        The
        Audit Committee’s duties are to recommend to our Board of Directors the
        engagement of independent auditors to audit our financial statements and
        to
        review our accounting and auditing principles. The Audit Committee reviews
        the
        scope, timing and fees for the annual audit and the results of audit
        examinations performed by the internal auditors and independent public
        accountants, including their recommendations to improve the system of accounting
        and internal controls. The Audit Committee oversees the independent auditors,
        including their independence and objectivity. However, the committee members
        are
        not acting as professional accountants or auditors, and their functions are
        not
        intended to duplicate or substitute for the activities of management and
        the
        independent auditors. The Audit Committee is empowered to retain independent
        legal counsel and other advisors as it deems necessary or appropriate to
        assist
        the Audit Committee in fulfilling its responsibilities, and to approve the
        fees
        and other retention terms of the advisors. Each of our Audit Committee members
        are, in the opinion of our Board of Directors, “Independent” as defined by the
        federal securities laws and The NASDAQ Stock Market and possess an understanding
        of financial statements and generally accepted accounting principles. Mr.
        Bush
        is a qualified financial expert as defined in Item 407(d)(5)(ii) of Regulation
        S-K and serves as chairman of the Audit Committee.
  2
  ***Compensation
        Committee***
  The
        Compensation Committee is comprised of Howard L. Haronian, M.D. and William
        Bush. Dr. Haronian is the Chairman of the Compensation Committee. The
        Compensation Committee periodically reviews and approves our salary and benefits
        policies, including compensation of executive officers. The Compensation
        Committee also administers our stock option plans and recommends and approves
        grants of stock options under such plans.
  ***Nominating
        Committee***
  The
        Nominating Committee is comprised of Paul Koehler and Howard L. Haronian,
        M.D.
        Dr. Haronian is Chairman of the Nominating Committee. The Nominating Committee
        considers and makes recommendations on matters related to the practices,
        policies and procedures of the board and takes a leadership role in shaping
        our
        corporate governance. As part of its duties, the Nominating Committee assesses
        the size, structure and composition of the board and board committees,
        coordinates evaluation of board performance and reviews board compensation.
        The
        Nominating Committee also acts as a screening and nominating committee for
        candidates considered for election to the board.
  **Compensation
        of Directors**
 
 The
        following table summarizes the compensation awarded during the fiscal year
        ended
        December 31, 2007 to our directors who are not named executive officers in
        the
        summary compensation table below:
  **Name**
              
              **Fees
                  Earned or**
                **Paid
                  in Cash**
              
              **Option**
                **Awards
                  (1)(2)**
              
              **Other**
                **Compensation**
              
              **Total**Philip
                  Urso
              
              $
              26,333
              
              $
              15,447
              
              $
              6,027(3)
              
              $
              47,807Howard
                  L. Haronian, M.D.
              
              $
              36,500
              
              $
              18,537
              
              
              -
              
              $
              55,037Paul
                  Koehler
              
              $
              34,000
              
              $
              12,358
              
              
              -
              
              $
              46,358William
                  Bush
              
              $
              36,500
              
              $
              15,447
              
              
              -
              
              $
              51,947
  (1)
              Based
                  upon the aggregate grant date fair value calculated in accordance
                  with the
                  Financial Accounting Standards Board Statement of Financial Accounting
                  Standard No. 123R, Share Based Payment. Our policy and assumptions
                  made in
                  the valuation of share based payments are contained in Note 2 to
                  our
                  December 31, 2007 financial
                  statements.
  (2)
              As
                  of December 31, 2007, there were outstanding options to purchase
                  an
                  aggregate of 362,886 shares, 50,039 shares, 10,000 shares and 12,500
                  shares held by Mr. Urso, Dr. Haronian, Mr. Koehler and Mr. Bush,
                  respectively.
  (3)
              Includes
                  $4,000 paid to Mr. Urso as salary, and $2,027 paid for medical
                  benefits
                  coverage in January and February
                  2007.
  Pursuant
        to the 2007 Equity Compensation Plan, each non-employee director is entitled
        to
        receive ten-year options to purchase 10,000 shares of our common stock at
        an
        exercise price equal to the fair market value of our common stock on the
        date of
        grant upon such non-employee director’s initial election or appointment to the
        Board of Directors and annually thereafter, plus 2,500 additional shares
        of
        common stock for committee or board chairpersons, $25,000 per annum in cash,
        plus $1,000 per meeting attended in person or by telephone, and $500 per
        committee meeting.
  3
  **Section
        16(a) Beneficial Ownership Reporting Compliance**
  Section
        16(a) of the Exchange Act requires our executive officers and directors,
        and
        persons who beneficially own more than 10% of our equity securities, to file
        reports of ownership and changes in ownership with the Securities and Exchange
        Commission. Based solely on our review of copies of such reports and
        representations from our executive officers and directors, we believe that
        our
        executive officers and directors complied with all Section 16(a) filing
        requirements during the year ended December 31, 2007, except that Jeffrey
        Thompson, our President, Chief Executive Officer and a director, failed to
        timely file a Form 4 reporting the grant of an option to purchase shares
        of our
        common stock on December 3, 2007, Maria Perry, our Interim Chief Financial
        Officer, failed to timely file a Form 3 upon appointment to such office,
        and
        George E. Kilguss, III, our former Chief Financial Officer, failed to file
        a
        Form 4 reporting the grant of an option to purchase shares of our common
        stock
        on December 3, 2007.
  **Code
        of Ethics**
  Our
        Board
        of Directors has adopted a code of conduct and ethics that establishes the
        standards of ethical conduct applicable to all directors, officers and employees
        of our company. The code addresses, among other things, conflicts of interest,
        compliance with disclosure controls and procedures and internal control over
        financial reporting, corporate opportunities and confidentiality requirements.
        The Audit Committee is responsible for applying and interpreting our code
        of
        conduct and ethics in situations where questions are presented to
        it.


**Item
      10. Executive Compensation.**


The
        following table summarizes the annual and long-term compensation paid to
        our
        chief executive officer and our two other most highly compensated executive
        officers who were serving at the end of 2007, whom we refer to collectively
        in
        this prospectus as the “named executive officers”:
  Summary
        Compensation Table
  **Name
                  and Principal Position**
              
              **Year**
              
              **Salary**
              
              **Bonus**
              
              **Option
                  Awards(1)**
              
              **Nonqualified
                  Deferred Compensation Earnings**
              
              **Total**Jeffrey
                  M. Thompson
              
              
              2007
              
              $
              225,000
              
              $
              137,800
              (2)
              $
              31,949(3)
              
              
              -
              
              $
              394,749President
                  and Chief Executive Officer
              
              
              2006
              
              $
              171,000
              
              $
              75,000
              (4)
              $
              413,837(5)
              
              $
              10,000
              
              $
              669,837George
                  E. Kilguss, III
                Chief
                  Financial Officer(6)
              
              
              2007
                2006
              
              $
                $
              188,945
                135,000
              
              $
                $
              33,440
                50,000
              
              $
              8,360(7)
                -
              
              $
              -
                45,000
              
              $
                $
              230,745
                230,000Arthur
                  Giftakis
              
              
              2007
              
              $
              120,000
              
              $
              21,500
              
              
              -
              
              
              -
              
              $
              141,500Vice
                  President of Engineering
              
              
              2006
              
              $
              120,000
              
              
              -
              
              
              -
              
              
              -
              
              $
              120,000and
                  Operations
  (1)
        Based
        upon the aggregate grant date fair value calculated in accordance with the
        Financial Accounting Standards Board Statement of Financial Accounting Standard
        No. 123R, Share Based Payment. Our policy and assumptions made in the valuation
        of share based payments are contained in Note 2 to our December 31, 2007
        financial statements.
  (2)  Of
        this
        $137,800 cash bonus, $69,400 was awarded to Mr. Thompson in 2007 in recognition
        of services performed during 2007, $34,200 was awarded to Mr. Thompson on
        January 28, 2008 in recognition of services performed during 2007 and $34,200
        was awarded to Mr. Thompson on February 7, 2008 in recognition of services
        performed during 2007.
  (3)  Represents
        (i) a ten-year option to purchase 12,010 shares of our common stock at an
        exercise price of $2.00 per share granted on December 3, 2007 in recognition
        of
        services performed during 2007, which option is fully vested and exercisable
        on
        the date of grant, and (ii) a ten-year option to purchase 11,032 shares of
        our
        common stock at an exercise price of $2.00 per share granted on March 3,
        2008 in
        recognition of services performed in 2007, which option vests as to one-third
        of
        the shares subject to the option annually, commencing March 3,
        2009.
  (4)  Of
        this
        $75,000 cash bonus, $30,000 was awarded to Mr. Thompson in 2006 in recognition
        of services performed during 2006, and $45,000 was awarded to Mr. Thompson
        on
        February 14, 2007 in recognition of services performed during 2006.
  (5)
        Represents a five-year option to purchase 75,000 shares of our common stock
        at
        an exercise price of $9.74 per share granted on February 14, 2007 in recognition
        of services performed during 2006. Such option vests quarterly over a two-year
        period commencing April 1, 2007.
  (6)
        Mr.
        Kilguss resigned from our company on December 18, 2007.
  (7)
        Represents a ten-year option to purchase 6,760 shares of our common stock
        at an
        exercise price of $2.00 per share granted on December 3, 2007, which option
        is
        fully vested and exercisable on the date of grant.
  4
  **Outstanding
        Equity Awards at Fiscal Year-End**
  The
        following table summarizes the outstanding equity awards to our named executive
        officers as of December 31, 2007:
  **Option
                  Awards****Name**
              
              **Number
                  of Securities Underlying Unexercised Options
                  Exercisable**
              
              **Number
                  of Securities Underlying Unexercised Options
                  Unexercisable**
              
              **Option
                  Exercise Price**
              
              **Option
                  Expiration Date**Jeffrey
                  M. Thompson
              
              
              280,309
              (2)
              
              −
              
              $
              0.78
              
              
              2/27/13175,193
              (3)
              
              −
              
              $
              1.14
              
              
              12/14/14175,193
              (4)
              
              −
              
              $
              1.43
              
              
              4/28/1528,125
              (5)
              
              46,875
              
              $
              9.74
              
              
              2/13/1212,010
              (6)
              
              −
              
              $
              2.00
              
              
              12/2/17George
                  E. Kilguss, III(1)
              
              
              175,193
              (4)
              
              −
              
              $
              1.43
              
              
              4/28/156,760
              (7)
              
              −
              
              $
              2.00
              
              
              12/2/17Arthur
                  Giftakis
              
              
              59,566
              (8)
              
              −
              
              $
              1.43
              
              
              11/16/1323,359
              (9)
              
              11,680
              
              $
              1.43
              
              
              8/28/15
  (1)
        Mr.
        Kilguss resigned from our company on December 18, 1007.
 (2)
          Such
          option was fully vested and exercisable on February 28, 2003, the date
          of
          grant.
 (3)
          Such
          option was fully vested and exercisable on December 15, 2004, the date
          of
          grant.
 (4)
          Such
          option was fully vested and exercisable on April 29, 2005, the date of
          grant.
 (5)
          Such
          option vests in equal quarterly installments over a two-year period commencing
          April 1, 2007.
 (6)
          Such
          option was fully vested and exercisable on December 3, 2007, the date of
          grant.
 (7)
          Such
          option was fully vested and exercisable on December 3, 2007, the date of
          grant.
 (8)
          Such
          option vests as to one-third of the shares subject to the option annually,
          commencing November 17, 2004.
 (9)
          Such
          option vests as to one-third of the shares subject to the option annually,
          commencing August 29, 2006.
  **Employment
        Agreements and Change-in-Control Agreements**
  On
        December 21, 2007, we entered into an employment agreement with Jeffrey M.
        Thompson, our principal executive officer. Pursuant to the terms of the
        agreement, Mr. Thompson will serve as our chief executive officer and president
        for a period of two years, with automatic one-year renewals, subject to either
        party electing to renew. For such services, Mr. Thompson will receive a base
        salary of $225,000 per annum, which may be increased annually by our Board
        of
        Directors in its discretion, but which increase shall not be less than the
        greater of (i) the annual increase in the consumer price index or (ii) 5%.
        Mr.
        Thompson is also eligible for a bonus of up to 75% of his base salary, as
        determined by our Board of Directors. In addition, we will pay 100% of all
        costs
        associated with Mr. Thompson’s employee benefits, including without limitation
        health insurance.
  If
        Mr.
        Thompson’s employment is terminated (i) by us without “cause,” (ii) by him for
“good reason” or (iii) by us within two years of a “change of control” (as such
        terms are defined in the agreement), then (a) we will be required to pay
        Mr.
        Thompson twenty-four months base salary in monthly installments, (b) any
        unvested options to purchase shares of our common stock would immediately
        vest
        and become exercisable and as to any grants of restricted stock restrictions
        would immediately lapse, and (c) we must continue to provide employee benefits,
        including without limitation health insurance, to Mr. Thompson for a period
        of
        five years following such termination.
  During
        Mr. Thompson’s employment with us, and for a period of twelve months following
        his termination (the “Restricted Period”), except for a termination by Mr.
        Thompson for “good reason,” he is prohibited from engaging in any line of
        business in which we were engaged or had a formal plan to enter during the
        period of his employment with us. We will continue to pay Mr. Thompson his
        base
        salary then in effect, in accordance with our customary payroll practices
        for
        the duration of any such Restricted Period in the event that Mr. Thompson’s
        employment is terminated voluntarily by him, except for “good reason,” or by us
        for “cause.”
  5




**Item
      11. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.**


The
        following table sets forth information with respect to the beneficial ownership
        of our common stock as of April 23, 2008 by:
  ·
              each
                  person known by us to beneficially own more than 5% of our common
                  stock;
 ·
              each
                  of our directors;
 ·
              each
                  of our named executive officers; and
 ·
              all
                  of our directors and executive officers as a group.
  The
        percentages of common stock beneficially owned are reported on the basis
        of
        regulations of the Securities and Exchange Commission governing the
        determination of beneficial ownership of securities. Under the rules of the
        Securities and Exchange Commission, a person is deemed to be a beneficial
        owner
        of a security if that person has or shares voting power, which includes the
        power to vote or to direct the voting of the security, or investment power,
        which includes the power to dispose of or to direct the disposition of, with
        respect to the security. Except as indicated in the footnotes to this table,
        each beneficial owner named in the table below has sole voting and sole
        investment power with respect to all shares beneficially owned and each person’s
        address is c/o Towerstream Corporation, 55 Hammarlund Way, Middletown, Rhode
        Island 02842, unless otherwise indicated.
  **Name
                  and Address of Beneficial Owner**
              
              **Amount
                  and Nature**
                **of
                  Beneficial Ownership(1)**
              
              **Percent
                  of**
                **Class(1)****5%
                  Stockholders:**Orphan
                  Fund L.P.
              
              2,312,292
              
              
              
              6.7
              %One
                  Sansome Street, Suite 2900San
                  Francisco, CA 94104Stephens
                  Investment Management, LLC
              
              3,151,584
              (2)
              
              
              9.1
              %One
                  Sansome Street, Suite 2900San
                  Francisco, CA 94104**Directors
                  and Named Executive Officers:**Jeffrey
                  M. Thompson
              
              2,590,585
              (3)
              
              
              7.5
              %Philip
                  Urso
              
              4,170,195
              (4)
              
              
              12.1
              %Arthur
                  G. Giftakis
              
              82,925
              (5)
              
              
              *Howard
                  L. Haronian
              
              1,915,341
              (6)
              
              
              5.5
              %Paul
                  Koehler
              
              3,333
              (7)
              
              
              *William
                  Bush
              
              9,167
              (8)
              
              
              *George
                  E. Kilguss, III(9)
              
              25,375
              (10)
              
              
              *All
                  directors and executive officers as a group (7 persons)
              
              8,796,921
              (3)(4)(5)(6)(7)(8)(10)
              
              
              25.5
              %
 *
        Less
        than 1%.
 
 (1)
              Shares
                  of common stock beneficially owned and the respective percentages
                  of
                  beneficial ownership of common stock assumes the exercise of all
                  options,
                  warrants and other securities convertible into common stock beneficially
                  owned by such person or entity currently exercisable or exercisable
                  within
                  60 days of April 23, 2008. Shares issuable pursuant to the exercise
                  of
                  stock options and warrants exercisable within 60 days are deemed
                  outstanding and held by the holder of such options or warrants
                  for
                  computing the percentage of outstanding common stock beneficially
                  owned by
                  such person, but are not deemed outstanding for computing the percentage
                  of outstanding common stock beneficially owned by any other person.
                  As of
                  April 23, 2008, there were 34,556,332 shares of our common stock
                  outstanding.
 
 (2)
              These
                  shares of common stock are beneficially owned by certain investment
                  limited partnerships, including Orphan Fund, L.P., for which Stephens
                  Investment Management, LLC (“SIM”) serves as general partner and
                  investment manager. SIM, as those investment limited partnerships’ general
                  partner and investment manager, and Paul Stephens, W. Bradford
                  Stephens
                  and P. Bartlett Stephens, as managing members and owners of SIM,
                  may
                  therefore be deemed to beneficially own the shares owned by such
                  investment limited partnerships, insofar as they may be deemed
                  to have the
                  power to direct the voting or disposition of those shares. Each
                  of SIM,
                  Paul Stephens, Bradford Stephens and P. Bartlett Stephens disclaims
                  beneficial ownership as to these shares, except to the extent of
                  his or
                  its pecuniary interests therein.
  6
  (3)
              Includes
                  689,580 shares of common stock issuable upon the exercise of options
                  that
                  are currently exercisable or exercisable within 60
                  days.
 
 (4)
              Includes
                  350,386 shares of common stock held by Mr. Urso’s minor children and
                  354,553 shares of common stock issuable upon the exercise of options
                  that
                  are currently exercisable or exercisable within 60 days. Mr. Urso
                  disclaims beneficial ownership of all shares held by his minor
                  children.
 
 (5)
              Represents
                  82,925 shares of common stock issuable upon the exercise of options
                  that
                  are currently exercisable or exercisable within 60 days.
 
 (6)
              Includes
                  1,723,336 shares of common stock held as joint tenants with Dr.
                  Haronian’s
                  spouse and 16,680 shares of common stock issuable upon the exercise
                  of
                  options that are currently exercisable or exercisable within 60
                  days.
 
 (7)
              Represents
                  3,333 shares of common stock issuable upon the exercise of options
                  that
                  are currently exercisable or exercisable within 60
                  days.
 
 (8)
              Includes
                  4,167 shares of common stock issuable upon the exercise of options
                  that
                  are currently exercisable or exercisable within 60
                  days.
 
 (9)
              Mr.
                  Kilguss resigned from our company on December 18, 2007.
 
 (10)
              Includes
                  6,761 shares of common stock issuable upon the exercise of options
                  that
                  are currently exercisable or exercisable within 60
                  days.




**Item
      12. Certain Relationships and Related Transactions, and Director Independence.**


On
        August
        2, 2002, we borrowed $250,000 from Natale and Elizabeth Urso, Philip Urso’s
        parents, and issued a promissory note in the original principal amount of
        $250,000. This note provided for interest at the rate of 10% per annum and
        was
        due and payable within 60 days of demand.
 
 On
        April
        1, 2003, we borrowed $253,000 from Philip Urso and issued Mr. Urso a promissory
        note, dated April 1, 2003, in the original principal amount of $253,000.
        On
        November 30, 2004, we borrowed an additional $100,000 from Mr. Urso and issued
        Mr. Urso a promissory note, dated November 30, 2004, in the original principal
        amount of $100,000. On August 1, 2005, we consolidated all of our outstanding
        obligations to Mr. Urso under one instrument, by cancelling each of the
        foregoing promissory notes and issuing Mr. Urso a single consolidated note
        for
        the principal sum of $360,564.04 to account for the $65,251.34 outstanding
        under
        the April 1, 2003 note, the $106,694.31 outstanding under the November 30,
        2004
        note, $111,959.24 of deferred compensation in 2004 and $76,659.15 of deferred
        compensation in 2005. This consolidated note provided for interest at the
        rate
        of 5% per annum and was due and payable on August 1, 2008. Mr. Urso, however,
        had the right to convert up to 50% of the note’s unpaid balance into shares of
        common stock at a conversion price of $1.00 per share.
 
 On
        December 7, 2005, we borrowed $250,000 from Mr. Urso and issued Mr. Urso
        a
        promissory note, dated December 7, 2005, in the original principal amount
        of
        $250,000. This note provided for interest at the rate of 10% per annum and
        was
        due and payable on December 7, 2006. Mr. Urso, however, had the right to
        convert
        all of the note’s unpaid balance into shares of common stock at a conversion
        price of $1.00 per share.
 
 On
        January 13, 2006, we borrowed $250,000 from Mr. Urso and issued Mr. Urso
        a
        promissory note, dated January 13, 2006, in the original principal amount
        of
        $250,000. This note provided for interest at the rate of 10% per annum and
        was
        due and payable within 60 days of demand.
 
 On
        July
        12, 2006, we borrowed $50,000 from Mr. Urso and issued Mr. Urso a promissory
        note, dated July 12, 2006, in the original principal amount of $50,000. This
        note provided for interest at the rate of 10% per annum and was due and payable
        within 60 days of demand.
 
 On
        October 1, 2006, we borrowed $125,000 from Mr. Urso and issued Mr. Urso a
        promissory note, dated October 1, 2006, in the original principal amount
        of
        $125,000. This note provided for interest at the rate of 10% per annum and
        was
        due and payable within 60 days of demand.
 
 On
        September 7, 2004, we borrowed $150,000 from George E. Kilguss, III and issued
        Mr. Kilguss a promissory note, dated September 7, 2004, in the original
        principal amount of $150,000. This note provided for interest at the rate
        of 10%
        per annum and was due and payable on September 7, 2007. Mr. Kilguss, however,
        had the right to convert all of the note’s unpaid balance into shares of common
        stock at a purchase price of $0.80 per share.
 
 On
        January 1, 2005, Mr. Kilguss agreed to defer $125,000 of his 2005 compensation.
        The deferred compensation accrued interest at a rate of 10% per annum. The
        deferred compensation and accrued interest was due on December 31, 2006.
        Mr.
        Kilguss, however, had the right to convert any amount of the balance not
        paid
        into shares of common stock at a conversion price of $1.00 per
        share.
 
 On
        January 1, 2006, Mr. Kilguss agreed to defer an additional $45,000 of his
        2006
        compensation. The deferred compensation accrued interest at a rate of 10%
        per
        annum. The deferred compensation and accrued interest was due on December
        31,
        2006. Mr. Kilguss, however, had the right to convert any amount of the balance
        not paid into shares of common stock at a conversion price of $1.00 per
        share.
 
 On
        October 1, 2006, we borrowed $150,000 from Howard L. Haronian and issued
        Dr.
        Haronian a promissory note, dated October 1, 2006, in the original principal
        amount of $150,000. This note provided for interest at the rate of 10% per
        annum
        and was due and payable within 60 days of demand.
  7
  On
        January 4, 2007, the aggregate outstanding principal and interest on the
        above
        promissory notes was $1,691,636. On such date, each of the noteholders sold
        their notes to a group of unaffiliated third parties pursuant to our issuing
        each of the note purchasers new notes that:
 
 ·
              were
                  due and payable on January 4, 2008;
 ·
              accrued
                  interest at the rate of 10% per annum; and
 ·
              became
                  automatically convertible into shares of common stock at a conversion
                  price of $1.50 per share upon a merger.
 
 When
        Towerstream Corporation, a private company, merged with the Company on January
        12, 2007, these new January 4, 2007 notes converted into 1,127,575 shares
        of our
        common stock.
 
 On
        November 10, 2005, we borrowed $250,000 from Howard L. Haronian and issued
        Dr.
        Haronian a promissory note, dated November 10, 2005, in the original principal
        amount of $250,000. The note provided for interest at the rate of 10% per
        annum
        and was due and payable on November 10, 2006. Dr. Haronian, however, had
        the
        right to convert all of the note’s unpaid balance into shares of common stock at
        a conversion price of $1.00 per share. On January 12, 2007, Dr. Haronian
        converted this note into 174,825 shares of our common stock at an adjusted
        conversion price of $1.43 per share.
 
 **Director
        Independence**
  Each
        of
        Howard L. Haronian, Paul Koehler and William Bush are independent directors,
        as
        provided in Nasdaq Marketplace Rule 4200(a)(15).





**Item
      13. Exhibits.**


**Exhibit
                    No.**
                
                **Description**31.1
                
                Section
                    302 Certification of Principal Executive Officer31.2
                
                Section
                    302 Certification of Principal Financial Officer32.1
                
                Section
                    906 Certification of Principal Executive Officer32.2
                
                Section
                    906 Certification of Principal Financial
                    Officer
 **Item
          14. Principal Accountant Fees and Services**
 
 **Audit
          Fees**
  The
          aggregate fees billed for professional services rendered by Marcum &
Kliegman LLP for the audit of our annual financial statements, review of
          financial statements included in our quarterly reports and other fees that
          are
          normally provided by the accountant in connection with statutory and regulatory
          filings or engagements for the fiscal year ended December 31, 2007 were
          $316,088.
 
 **Audit
          Related Fees**
  There
          were no fees billed for other audit related services, registration statement
          consents and due diligence by Marcum & Kliegman LLP that are reasonably
          related to the performance of the audit or review of our financial statements
          for the fiscal year ended December 31, 2007.
  **Tax
          Fees**
  There
          were no fees billed for professional services rendered by Marcum & Kliegman
          LLP, for tax compliance, tax advice and tax planning during the fiscal
          year
          ended December 31, 2007.
 
 **All
          Other Fees**
  There
          were no fees billed for professional services rendered by Marcum & Kliegman
          LLP, for services other than those described above, during the fiscal year
          ended
          December 31, 2007.
 
 **Audit
          Committee**
  Our
          Audit
          Committee approved, in advance, all work performed by Marcum & Kliegman
          .
  8


**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.


**TOWERSTREAM
              CORPORATION**Date: April
              25, 2008
            By:
            /s/ Jeffrey M. ThompsonJeffrey
                M. Thompson
                President
                  and Chief Executive Officer(President
              and
              Principal Executive Officer)




In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.





**Name**
            
            **Capacity**
            
            **Date**/s/
                Jeffrey M. ThompsonJeffrey
                M. Thompson
            
            Director
                  and Chief Executive Officer
                  (President
                    and Principal Executive Officer)
            
            April
                25, 2008/s/
              Maria PerryMaria Perry
            
            Interim
                Chief Financial Officer
              (Principal
                Financial Officer and
            
            April
                    25, 2008Principal
                Accounting Officer)/s/
              Philip UrsoPhilip Urso
            
            Director
                - Chairman of the Board of Directors
            
            April
                    25, 2008/s/
              Howard L. Haronian, M.D.Howard L. Haronian, M.D.
            
            Director
            
            April
                    25, 2008/s/
              William J. BushWilliam
              J. Bush
            
            Director
            
            April
                    25, 2008/s/
              Paul KoehlerPaul
              Koehler
            
            Director
            
            April
                    25, 2008




9




**EXHIBIT
      INDEX**





**Exhibit
                No.**
            
            **Description**


31.1
            
            Section
                302 Certification of Principal Executive Officer31.2
            
            Section
                302 Certification of Principal Financial Officer32.1
            
            Section
                906 Certification of Principal Executive Officer32.2
            
            Section
                906 Certification of Principal Financial
                Officer