**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

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**Form      10-QSB**

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| **x** | **QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934** |
|-------|---------------------------------------------------------------------------------------------------------------------|

**For      the quarterly period ended September 30, 2007**

**OR**

| **o** | **TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE                ACT** |
|-------|---------------------------------------------------------------------------------------------------|

**Commission      file number: 000-50985**

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**GigaBeam      Corporation**

**(Exact      name of small business issuer as specified in its charter)**

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| **Delaware**                                                                                        |   |   |   | **20-0607757**                                                            |
|-----------------------------------------------------------------------------------------------------|--------|--------|--------|---------------------------------------------------------------------------|
| **(State                or other jurisdiction of****incorporation                or organization)** |   |   |   | **(I.R.S.                Employer****Identification                No.)** |

**4021      Stirrup Creek Drive, Suite 400**

**Durham,      NC 27703**

**(Address      of principal executive offices)**

**(919)      206-4426**

**(Issuer’s      telephone number)**

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**GigaBeam      Corporation**

**Form      10-QSB**

**For      the Three and Nine Months Ended September 30, 2007**

**Index**

|                                                                                                                                                                                                             |   | Page   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|                                                                                                                                                                                                             |   |   |   |
| **Part                I. Financial Information**                                                                                                                                                                 |   |   |   |   |
|                                                                                                                                                                                                             |   |   |   |   |
| Item                1. Financial Statements                                                                                                                                                                      |   |   |   |   |
|                                                                                                                                                                                                             |   |   |   |   |
| Condensed                Consolidated Balance Sheets as of September 30, 2007 and December                31,                2006                                                                                |   |   | 3      |   |
| Condensed                Consolidated Statements of Operations for the three and nine months                ended                September 30, 2007 and 2006                                                     |   |   | 4      |   |
| Condensed                Consolidated Statements of Cash Flows for the nine months ended September                30, 2007 and 2006                                                                              |   |   | 5      |   |
| Consolidated                Statements of Shareholders’ Equity for the nine months ended September 30,                2007 and for the years ended December 31, 2006, and December 31,                2005 |   |   | 7      |   |
| Notes                to Condensed Consolidated Financial Statement                                                                                                                                               |   |   | 8      |   |
|                                                                                                                                                                                                             |   |   |   |   |
| Item                2 - Management’s Discussion and Analysis of Financial Condition and                Results of Operations                                                                               |   |   | 19     |   |
|                                                                                                                                                                                                             |   |   |   |   |
| Item                3 - Controls and Procedures                                                                                                                                                                  |   |   | 24     |   |
|                                                                                                                                                                                                             |   |   |        |   |
| **Part                II. Other Information**                                                                                                                                                                    |   |   | 26     |   |
|                                                                                                                                                                                                             |   |   |   |   |
| Item                1 - Legal Proceedings                                                                                                                                                                        |   |   | 26     |   |
|                                                                                                                                                                                                             |   |   |   |   |
| Item                2 - Issuance of Unregistered Securities                                                                                                                                                      |   |   | 26     |   |
|                                                                                                                                                                                                             |   |   |   |   |
| Item                3 - Defaults Upon Senior Securities                                                                                                                                                          |   |   | 26     |   |
|                                                                                                                                                                                                             |   |   |   |   |
| Item                4 - Submission of Matters to a Vote of Security Holders                                                                                                                                      |   |   | 26     |   |
|                                                                                                                                                                                                             |   |   |   |   |
| Item                5 - Other Information                                                                                                                                                                        |   |   | 26     |   |
|                                                                                                                                                                                                             |   |   |   |   |
| Item                6 - Exhibits                                                                                                                                                                                 |   |   | 27     |   |

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**Part      I - Financial Information**

**Item      1. Financial Statements**

| **GigaBeam                  Corporation**                  |
|------------------------------------------------------------|
| **Condensed                  Consolidated Balance Sheets** |
| **(Unaudited)**                                            |

|                                                                                                                                                     |   | **September                  30,** |          | **December                  31,** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|---------------|-----------------------------------|--------|
|                                                                                                                                                     |   | **2007**                           |          | **2006(a)**                       |   |
| **ASSETS**                                                                                                                                               |   |                               |          |                              |   |
| Current                  assets:                                                                                                                         |   |                               |          |                              |   |
| Cash                  and equivalents                                                                                                               |   | $                                  | 6,180         |                              | $      | 653,734 |   |
| Accounts                  receivable, net of allowance of $804,063                                                                                  |   |                               |          |                              |   |   |   |
|  and                  $533,766 respectively                                                                                                         |   |                               | 988,751       |                              |   | 807,500 |   |
| Inventory,                  net of allowance of $1,654,833                                                                                          |   |                               |          |                              |   |   |   |
|  and                  $933,554 respectively                                                                                                         |   |                               | 4,332,757     |                              |   | 7,621,574 |   |
| Prepaid                  expenses and other current assets                                                                                          |   |                               | 257,507       |                              |   | 568,711 |   |
| Total                  current assets                                                                                                                    |   |                               | 5,585,195     |                              |   | 9,651,519 |   |
|                                                                                                                                                     |   |                               |          |                              |   |   |   |
| Long-term                  assets:                                                                                                                       |   |                               |          |                              |   |   |   |
| Inventory                  - non-current, net                                                                                                       |   |                               | 1,892,125     |                              |   | - |   |
| Property                  and equipment, net                                                                                                        |   |                               | 1,480,898     |                              |   | 1,986,735 |   |
| Patent                  and license rights, net                                                                                                     |   |                               | 355,624       |                              |   | 352,502 |   |
| Deposits                                                                                                                                            |   |                               | 68,338        |                              |   | 93,128 |   |
| Debt                  issuance costs                                                                                                                |   |                               | 30,032        |                              |   | 181,976 |   |
| Total                  long-term assets:                                                                                                                 |   |                               | 3,827,017     |                              |   | 2,614,341 |   |
| Total                  assets                                                                                                                            |   | $                                  | 9,412,212     |                              | $      | 12,265,860 |   |
|                                                                                                                                                     |   |                               |          |                              |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                                                                |   |                               |          |                              |   |   |   |
| Current                  liabilities:                                                                                                                    |   |                               |          |                              |   |   |   |
| Accounts                  payable                                                                                                                   |   | $                                  | 3,043,944     |                              | $      | 1,891,077 |   |
| Accrued                  expenses                                                                                                                   |   |                               | 2,045,067     |                              |   | 1,416,716 |   |
| Current                  portion of capital lease obligations                                                                                       |   |                               | 22,393        |                              |   | 29,125 |   |
| Convertible                  notes payable, net of discount                                                                                         |   |                               | 346,679       |                              |   | - |   |
| Note                  payable, related party                                                                                                        |   |                               | 65,000        |                              |   | - |   |
| Notes                  payable, other                                                                                                               |   |                               | 1,474,019     |                              |   | - |   |
| Total                  current liabilities                                                                                                               |   |                               | 6,997,102     |                              |   | 3,336,918 |   |
|                                                                                                                                                     |   |                               |          |                              |   |   |   |
| Capital                  lease obligations, non-current                                                                                                  |   |                               | 24,747        |                              |   | 41,159 |   |
| Convertible                  notes payable, net of discount                                                                                              |   |                               | -             |                              |   | 1,051,036 |   |
| Total                  liabilities                                                                                                                       |   |                               | 7,021,849     |                              |   | 4,429,113 |   |
|                                                                                                                                                     |   |                               |          |                              |   |   |   |
| Stockholders’                  equity:                                                                                                             |   |                               |          |                              |   |   |   |
| Series                  A redeemable preferred stock, $0.001 par value,                                                                             |   |                               |          |                              |   |   |   |
|  20,000                  shares authorized; 11,277 shares issued and                                                                                |   |                               |          |                              |   |   |   |
|  outstanding                  at September 30, 2007 and December 31, 2006                                                                           |   |                               | 11            |                              |   | 11 |   |
| Series                  B convertible preferred stock, $0.001 par value,                                                                            |   |                               |          |                              |   |   |   |
|  20,000                  shares authorized; 14,100 shares issued and                                                                                |   |                               |          |                              |   |   |   |
|  outstanding                  at September 30, 2007 and December 31, 2006                                                                           |   |                               | 14            |                              |   | 15 |   |
| Series                  C convertible preferred stock, $0.001 par value,                                                                            |   |                               |          |                              |   |   |   |
|  10,000                  shares authorized; 9,750 shares issued and                                                                                 |   |                               |          |                              |   |   |   |
|  outstanding                  at September 30, 2007 and December 31, 2006                                                                           |   |                               | 10            |                              |   | 10 |   |
| Common                  stock, $0.001 par value, 40,000,000 shares                  authorized;                                                     |   |                               |          |                              |   |   |   |
|  7,134,738                  and 6,099,279 shares issued and outstanding                                                                             |   |                               |          |                              |   |   |   |
|  at                  September 30, 2007 and December 31, 2006, respectively                                                                         |   |                               | 7,135         |                              |   | 6,099 |   |
| Additional                  paid-in capital                                                                                                         |   |                               | 54,975,920    |                              |   | 50,876,530 |   |
| Accumulated                  deficit                                                                                                                |   |                               | (52,592,727   | )                                 |   | (43,045,918 | ) |
| Total                  stockholders’ equity                                                                                                        |   |                               | **2,390,363** |                              |   | **7,836,747** |   |
| Total                  liabilities and stockholders’ equity                                                                                        |   | **$**                              | **9,412,212** |                              | **$**  | **12,265,860** |   |
|                                                                                                                                                     |   |                               |          |                              |   |   |   |
| (a)                  Condensed consolidated balance sheet as of December 31, 2006, has                  been                  derived from audited  |   |                               |
|  consolidated                  financial statements.                                                                                                |   |                               |          |
|                                                                                                                                                     |   |                               |          |                              |   |   |   |
|  *See                  notes to condensed consolidated financial                  statements*                                                       |

----

| **GigaBeam                  Corporation**                            |
|----------------------------------------------------------------------|
| **Condensed                  Consolidated Statements of Operations** |
| **(Unaudited)**                                                      |

|                                                                                               |   | **Three                  Months Ended** |       | **Nine                  Months Ended** |   |
|----------------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------|----------------------------------------|--------|
|                                                                                               |   | **September                  30,**      |       | **September                  30,**     |   |
|                                                                                               |   | **2007**                                |       | **2006**                               |   | **2007** |   | **2006** |   |
|                                                                                               |   |                                    |       |                                   |   |   |   |   |   |
| Net                  Sales                                                                         |   | $                                       | 445,863    |                                   | $      | 2,045,941 |   | $ | 2,798,568 |   | $ | 4,401,140 |   |
| Cost                  of sales                                                                     |   |                                    | 211,937    |                                   |   | 1,400,538 |   |   | 2,083,726 |   |   | 3,153,729 |   |
| Gross                  profit                                                                      |   |                                    | 233,926    |                                   |   | 645,403 |   |   | 714,842 |   |   | 1,247,411 |   |
|                                                                                               |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses:                                                               |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| Research                  and development                                                          |   |                                    | 943,036    |                                   |   | 1,208,201 |   |   | 2,449,474 |   |   | 3,840,557 |   |
| General                  and administrative                                                        |   |                                    | 2,100,386  |                                   |   | 1,209,308 |   |   | 4,210,057 |   |   | 4,752,691 |   |
| Selling                  and marketing                                                             |   |                                    | 663,227    |                                   |   | 1,289,368 |   |   | 1,618,290 |   |   | 3,825,825 |   |
| Service,                  install and link operations                                              |   |                                    | 330,705    |                                   |   | 849,102 |   |   | 1,006,818 |   |   | 2,394,498 |   |
| Total                  operating expenses                                                     |   |                                    | 4,037,354  |                                   |   | 4,555,979 |   |   | 9,284,639 |   |   | 14,813,571 |   |
|                                                                                               |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| Operating                  loss                                                                    |   |                                    | (3,803,428 | )                                      |   | (3,910,576 | ) |   | (8,569,797 | ) |   | (13,566,160 | ) |
|                                                                                               |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| Other                  income (expense):                                                           |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| Interest                  income                                                                   |   |                                    | 36         |                                   |   | 40,579 |   |   | 2,079 |   |   | 190,362 |   |
| Interest                  expense                                                                  |   |                                    | (317,575   | )                                      |   | (248,492 | ) |   | (979,091 | ) |   | (866,493 | ) |
|                                                                                               |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| Loss                  before provision for income taxes                                            |   |                                    | (4,120,967 | )                                      |   | (4,118,489 | ) |   | (9,546,809 | ) |   | (14,242,291 | ) |
|                                                                                               |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| Provision                  for income taxes                                                        |   |                                    | -          |                                   |   | - |   |   | - |   |   | - |   |
|                                                                                               |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                          |   |                                    | (4,120,967 | )                                      |   | (4,118,489 | ) |   | (9,546,809 | ) |   | (14,242,291 | ) |
|                                                                                               |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| Series                  A redeemable preferred stock dividend                                      |   |                                    | -          |                                   |   | - |   |   | (398,045 | ) |   | - |   |
| Series                  B convertible preferred stock dividend                                     |   |                                    | (302,000   | )                                      |   | (319,067 | ) |   | (906,000 | ) |   | (921,412 | ) |
| Series                  C convertible preferred stock dividend                                     |   |                                    | (200,000   | )                                      |   | - |   |   | (600,000 | ) |   | - |   |
| Effect                  of beneficial conversion feature related                                   |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| to                  issuance of Series C preferred stock                                           |   |                                    | -          |                                   |   | (2,252,398 | ) |   | - |   |   | (2,252,398 | ) |
| Increasing                  rate preferred stock non-cash dividend                                 |   |                                    | (264,576   | )                                      |   | - |   |   | (793,728 | ) |   | - |   |
|                                                                                               |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| Net                  loss allocated to common shareholders                                         |   | $                                       | (4,887,543 | )                                      | $      | (6,689,954 | ) | $ | (12,244,582 | ) | $ | (17,416,101 | ) |
|                                                                                               |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| Basic                  and diluted loss per share to common shareholders                           |   | $                                       | (0.72      | )                                      | $      | (1.12 | ) | $ | (1.87 | ) | $ | (3.11 | ) |
|                                                                                               |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
| Basic                  and diluted weighted average shares outstanding                             |   |                                    | 6,772,388  |                                   |   | 5,978,757 |   |   | 6,554,355 |   |   | 5,604,841 |   |
|                                                                                               |   |                                    |       |                                   |   |   |   |   |   |   |   |   |   |
|  *See                  notes to condensed consolidated financial                  statements* |

----

| **GigaBeam                  Corporation**                           |
|---------------------------------------------------------------------|
| **Condensed                  Consolidated Statements of Cash Flow** |
| **(Unaudited)**                                                     |

|                                                                                                          |   | **Nine                  Months Ended** |       |
|---------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|------------|
|                                                                                                          |   | **September                  30,**     |       |
|                                                                                                          |   | **2007**                               |       | **2006** |   |
| **Operating                  activities:**                                                                    |   |                                   |       |   |   |
| Net                  Loss                                                                                     |   | $                                      | (9,546,809 | ) | $ | (14,242,291 | ) |
| Adjustments                  to reconcile net loss to net cash used in operating                  activities: |   |                                   |       |   |   |   |   |
| Amortization                  of debt discount and beneficial conversion feature                              |   |                                   | 852,461    |   |   | 753,723 |   |
| Provision                  for doubtful accounts                                                              |   |                                   | 270,297    |   |   | 107,703 |   |
| Increase                  in inventory provision for obsolescence                                             |   |                                   | 721,280    |   |   | 758,554 |   |
| Increase                  (decrease) in reserve for warranty costs                                            |   |                                   | (116,688   | ) |   | 270,000 |   |
| Depreciation                  and amortization                                                                |   |                                   | 469,629    |   |   | 388,606 |   |
| Loss                  on sale of property and equipment                                                       |   |                                   | 44,501     |   |   | - |   |
| Non-cash                  compensation expenses                                                               |   |                                   | 1,944,556  |   |   | 1,962,235 |   |
| Changes                  in operating assets and liabilities:                                                 |   |                                   |       |   |   |   |   |
| Accounts                  receivable                                                                     |   |                                   | (451,548   | ) |   | (1,510,842 | ) |
| Inventory                                                                                                |   |                                   | 675,411    |   |   | (5,574,792 | ) |
| Prepaid                  expenses and other current assets                                               |   |                                   | 466,204    |   |   | 61,830 |   |
| Deposits                                                                                                 |   |                                   | 26,130     |   |   | (13,643 | ) |
| Accounts                  payable                                                                        |   |                                   | 2,349,297  |   |   | 563,669 |   |
| Accrued                  expenses                                                                        |   |                                   | 93,624     |   |   | (506,158 | ) |
| Net                  cash used in operating activities                                                        |   |                                   | (2,201,655 | ) |   | (16,981,406 | ) |
|                                                                                                          |   |                                   |       |   |   |   |   |
| **Investing                  activities:**                                                                    |   |                                   |       |   |   |   |   |
| Restricted                  cash                                                                              |   |                                   | -          |   |   | 160,405 |   |
| Purchases                  of property and equipment                                                          |   |                                   | (3,279     | ) |   | (804,876 | ) |
| Proceeds                  from disposal of fixed assets                                                       |   |                                   | 1,500      |   |   | - |   |
| Acquisition                  of patents and intangibles                                                       |   |                                   | (10,976    | ) |   | (82,669 | ) |
| Net                  cash used in investing activities                                                        |   |                                   | (12,755    | ) |   | (727,140 | ) |
|                                                                                                          |   |                                   |       |   |   |   |   |
| **Financing                  activities:**                                                                    |   |                                   |       |   |   |   |   |
| Repayments                  of capital lease obligations                                                      |   |                                   | (23,144    | ) |   | (215,859 | ) |
| Issuance                  of convertible preferred stock; net of related costs                                |   |                                   | -          |   |   | 9,224,705 |   |
| Proceeds                  from note payable to related party                                                  |   |                                   | 65,000     |   |   | - |   |
| Exercise                  of common stock warrants                                                            |   |                                   | -          |   |   | 2,011,036 |   |
| Exercise                  of common stock options                                                             |   |                                   | -          |   |   | 78,900 |   |
| Series                  B convertible preferred stock dividend paid                                           |   |                                   | -          |   |   | (921,412 | ) |
| Proceeds                  from note payable, other current                                                    |   |                                   | 1,525,000  |   |   | - |   |
| Net                  cash provided by financing activities                                                    |   |                                   | 1,566,856  |   |   | 10,177,370 |   |
|                                                                                                          |   |                                   |       |   |   |   |   |
| Net                  decrease in cash and equivalents                                                         |   |                                   | (647,554   | ) |   | (7,531,176 | ) |
| Cash                  and equivalents at beginning of period                                                  |   |                                   | 653,734    |   |   | 12,726,986 |   |
| Cash                  and equivalents at end of period                                                        |   | $                                      | 6,180      |   | $ | 5,195,810 |   |
|                                                                                                          |   |                                   |       |   |   |   |   |
|  *See                  notes to condensed consolidated financial statements*                             |   |                                   |       |   |   |   |   |

----

| **GigaBeam                  Corporation**                                                                                                               |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **Condensed                  Consolidated Statements of Cash Flow**                                                                                     |   |
| **(Unaudited)**                                                                                                                                         |   |
|                                                                                                                                                    |   |   |   |   |   |
|                                                                                                                                                    |   | **Nine                  Months Ended** |   |
|                                                                                                                                                    |   | **September                  30,** |   |
|                                                                                                                                                    |   | **2007** |   | **2006** |   |
| **Supplemental                  disclosures for cash flow information:**                                                                                |   |   |   |   |   |
|                                                                                                                                                    |   |   |   |   |   |
| Interest                  paid                                                                                                                          |   | $ | 3,831 |   | $ | 119,376 |   |
|                                                                                                                                                    |   |   |   |   |   |   |   |
| Non-cash                  investing and financing activities:                                                                                           |   |   |   |   |   |   |   |
| Conversion                  of convertible notes payable into shares of common stock                                                                    |   | $ | 1,262,800 |   | $ | 373,666 |   |
| Conversion                  of Series B convertible preferred stock into shares of                                                                      |   |   |   |   |   |   |   |
| common                  stock                                                                                                                      |   | $ | 164 |   | $ | 505 |   |
| Conversion                  of Series C convertible preferred stock into shares                  of                                                |   |   |   |   |   |   |   |
| common                  stock                                                                                                                      |   | $ | 41 |   | $ | - |   |
| Fair                  value adjustment of options granted                                                                                               |   | $ | 15,176 |   | $ | 127,380 |   |
| Fair                  value of warrants issued with common stock                                                                                        |   | $ | 368,874 |   | $ | - |   |
| Series                  A, Series B and Series C convertible preferred stock dividend paid                  in                  common stock or accrued |   | $ | 1,906,177 |   | $ | - |   |
| Non-cash                  increasing rate preferred stock dividend                                                                                      |   | $ | 793,728 |   | $ | - |   |
| Common                  stock issued to consultants and vendors                                                                                         |   | $ | 1,004,638 |   | $ | - |   |
| Capital                  lease obligations incurred to finance the purchase of                  equipment                                               |   | $ | - |   | $ | 38,686 |   |
|                                                                                                                                                    |   |   |   |   |   |   |   |
|  *See                  notes to condensed consolidated financial statements*                                                                       |   |   |   |   |   |   |   |

----

**GigaBeam        Corporation**

**Condensed        Consolidated Statements of Stockholders' Equity**

**(Unaudited)**

|                                                                                                                                                |   |                             |   |                          |   |            |   |         |   | Additional        |   |               |   |                  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|-------------------------------|--------|-----------------|--------|--------------|--------|-------------------|--------|--------------------|--------|-----------------------|--------|
|                                                                                                                                                |   | Preferred                  Stock |   | Common                  Stock |   | Paid-in         |   | Accumulated  |   |              |   |
|                                                                                                                                                |   | Shares                           |   | Amount                        |   | Shares          |   | Amount       |   | Capital           |   | Deficit            |   | Total                 |   |
| **Balance                  December 31, 2005**                                                                                                      |   |  30,177                     |   | $30                           |   |  4,999,132 |   | $4,999       |   | $37,810,439       |   | $(22,811,358)      |   | $15,004,110           |   |
|                                                                                                                                                |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
| Amortization                  of deferred                                                                                                      |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  compensation                                                                                                                                  |   |                        |   |                     |   |       |   |    |   |  14,436      |   |          |   |  14,436          |   |
| Issuance                  of Series C convertible                                                                                              |   |  10,000                     |   |  10                      |   |       |   |    |   |  9,224,694   |   |          |   |  9,224,704       |   |
|  preferred                  stock, net of costs                                                                                                |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
| Stock                  option compensation                                                                                                     |   |                        |   |                     |   |       |   |    |   |  2,361,044   |   |          |   |  2,361,044       |   |
| Stock                  options exercised                                                                                                       |   |                        |   |                     |   |  37,750    |   |  37     |   |  128,863     |   |          |   |  128,900         |   |
| Fair                  value adjustment of options                                                                                              |   |                        |   |                     |   |       |   |    |   |  112,164     |   |          |   |  112,164         |   |
|  granted                                                                                                                                       |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
| Conversion                  of notes payable                                                                                                   |   |                        |   |                     |   |  67,631    |   |  68     |   |  540,799     |   |          |   |  540,867         |   |
| Conversion                  of Series B convertible                                                                                            |   |  (3,800)                    |   |  (4)                     |   |  505,228   |   |  505    |   |  (501)       |   |          |   |  -               |   |
|  preferred                  stock                                                                                                              |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
| Stock                  dividend, Series A                                                                                                      |   |                        |   |                     |   |  91,739    |   |  92     |   |  (92)        |   |          |   |  -               |   |
|  redeemable                  preferred stock,                                                                                                  |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  paid                  in shares of common stock                                                                                               |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
| Dividend,                  Series B convertible                                                                                                |   |                        |   |                     |   |       |   |    |   |  (1,236,192) |   |          |   |  (1,236,192)     |   |
|  preferred                  stock paid in cash                                                                                                 |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
| Dividend,                  Series C convertible                                                                                                |   |                        |   |                     |   |       |   |    |   |  (91,111)    |   |          |   |  (91,111)        |   |
|  preferred                  stock paid in cash                                                                                                 |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
| Common                  stock warrants exercised                                                                                               |   |                        |   |                     |   |  397,799   |   |  398    |   |  2,011,987   |   |          |   |  2,012,385       |   |
| Net                  loss                                                                                                                      |   |                        |   |                     |   |       |   |    |   |         |   |  (20,234,560) |   |  (20,234,560)    |   |
|                                                                                                                                                |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
| **Balance                  December 31, 2006 (a)**                                                                                                  |   |  36,377                     |   |  36                      |   |  6,099,279 |   |  6,099  |   |  50,876,530  |   |  (43,045,918) |   |  7,836,747       |   |
| Series                  A redeemable preferred stock                                                                                           |   |  11,277                     |   | $11                           |   |       |   |    |   |         |   |          |   |             |   |
| Series                  B convertible preferred stock                                                                                          |   |  15,100                     |   |  15                      |   |       |   |    |   |         |   |          |   |             |   |
| Series                  C convertible preferred stock                                                                                          |   |  10,000                     |   |  10                      |   |       |   |    |   |         |   |          |   |             |   |
|                                                                                                                                                |   |  36,377                     |   | $36                           |   |       |   |    |   |         |   |          |   |             |   |
|                                                                                                                                                |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
| **Balance                  December 31, 2006 (a)**                                                                                                  |   |  36,377                     |   | $36                           |   |  6,099,279 |   | $6,099       |   | $50,876,530       |   | $(43,045,918)      |   | $7,836,747            |   |
|                                                                                                                                                |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
| Stock                  option compensation                                                                                                     |   |                        |   |                     |   |       |   |    |   | 1,446,561         |   |               |   |   1,446,561 |   |
| Fair                  value adjustment of options                                                                                              |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  granted                                                                                                                                       |   |                        |   |                     |   |       |   |    |   |  15,176      |   |          |   |  15,176          |   |
| Conversion                  of notes payable                                                                                                   |   |                        |   |                     |   |  157,850   |   |  158    |   |  1,262,642   |   |          |   |  1,262,800       |   |
| Conversion                  of Series B convertible                                                                                            |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  preferred                  stock                                                                                                              |   |  (1,000)                    |   |  (1)                     |   |  163,925   |   |  164    |   |  (163)       |   |          |   |  -               |   |
| Conversion                  of Series C convertible                                                                                            |   |  (250)                      |   |  -                       |   |  40,983    |   |  41     |   |  (41)        |   |          |   |  -               |   |
|  preferred                  stock                                                                                                              |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
| Issuance                  of warrants in connection                                                                                            |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  with                  notes payable                                                                                                           |   |                        |   |                     |   |       |   |    |   |  390,431     |   |          |   |  390,431         |   |
| Issuance                  of warrants to vendors                                                                                               |   |                        |   |                     |   |       |   |    |   |  482,819     |   |          |   |  482,819         |   |
| Stock                  dividend, Series A                                                                                                      |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  redeemable                  preferred stock,                                                                                                  |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  paid                  in shares of common stock                                                                                               |   |                        |   |                     |   |  131,492   |   |  132    |   |  (132)       |   |          |   |  -               |   |
| Dividend,                  Series B convertible                                                                                                |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  preferred                  stock paid in shares                                                                                               |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  of                  common stock                                                                                                              |   |                        |   |                     |   |  175,617   |   |  176    |   |  (176)       |   |          |   |  -               |   |
| Dividend,                  Series C convertible                                                                                                |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  preferred                  stock paid in shares                                                                                               |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  of                  common stock                                                                                                              |   |                        |   |                     |   |  116,302   |   |  116    |   |  (116)       |   |          |   |  -               |   |
| Accrued                  dividend, Series B                                                                                                    |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  convertible                  preferred stock                                                                                                  |   |                        |   |                     |   |       |   |    |   |  (302,000)   |   |          |   |  (302,000)       |   |
| Accrued                  dividend, Series C                                                                                                    |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  convertible                  preferred stock                                                                                                  |   |                        |   |                     |   |       |   |    |   |  (200,000)   |   |          |   |  (200,000)       |   |
| Issuance                  of common stock to vendors                                                                                           |   |                        |   |                     |   |  249,290   |   |  249    |   |  1,004,389   |   |          |   |  1,004,638       |   |
| Net                  loss                                                                                                                      |   |                        |   |                     |   |       |   |    |   |         |   |  (9,546,809)  |   |  (9,546,809)     |   |
|                                                                                                                                                |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
| **Balance                  September 30, 2007**                                                                                                     |   |  35,127                     |   | $35                           |   |  7,134,738 |   | $7,135       |   | $54,975,920       |   | $(52,592,727)      |   | $2,390,363            |   |
| Series                  A redeemable preferred stock                                                                                           |   |  11,277                     |   | $11                           |   |       |   |    |   |         |   |          |   |             |   |
| Series                  B convertible preferred stock                                                                                          |   |  14,100                     |   |  14                      |   |       |   |    |   |         |   |          |   |             |   |
| Series                  C convertible preferred stock                                                                                          |   |  9,750                      |   |  10                      |   |       |   |    |   |         |   |          |   |             |   |
|                                                                                                                                                |   |  35,127                     |   | $35                           |   |       |   |    |   |         |   |          |   |             |   |
|                                                                                                                                                |   |                        |   |                     |   |       |   |    |   |         |   |          |   |             |   |
|  (a)                  Consolidated statements of stockholders' equity for the year ended                  December 31, 2006, have been derived |
|  from                  audited consolidated financial statements. See notes to condensed                  financial statements.                |

----

**GigaBeam      Corporation**

**Notes      to Condensed Consolidated Financial Statements**

**September      30, 2007**

**(Unaudited)**

**1.      Description of the Business:**

The      Company and its wholly-owned subsidiary, GigaBeam Service Corporation, designs,      develops, markets, sells, leases, installs and services advanced point-to-point      wireless communication solutions for commercial and government customers. The      Company’s communication links are capable of transmission speeds at or above one      gigabit-per-second under the trade name “WiFiber®.” The Company’s products      operate in the 71-76 GHz and 81-86 GHz spectrum bands. The Company’s management      believes that the unprecedented amounts of bandwidth provided by these spectrum      blocks and the quality of its proprietary product designs will provide for      wireless communications at previously unattainable fiber-equivalent speed and      reliability.

*E*
*E*

*Basis      of Presentation*

**2.      Summary of Significant Accounting Policies:**

*Reclassifications      *

*Inventory*

----

|                                         |   | September                30,2007 |       | December                31,2006 |   |
|----------------------------------------------|--------|----------------------------------|------------|---------------------------------|--------|
| Raw                materials                 |   | $                                | 4,933,455  |                            | $      | 4,765,145 |   |
| Finished                goods                |   |                             | 2,946,260  |                            |   | 3,789,983 |   |
|                                         |   |                             | 7,879,715  |                            |   | 8,555,128 |   |
| Less                reserve for obsolescence |   |                             | (1,654,833 | )                               |   | (933,554 | ) |
|                                         |   | $                                | 6,224,882  |                            | $      | 7,621,574 |   |

*Patent      & license rights*

*Impairment      of Long-Lived Assets*

*Accrued      Expenses*

|                                             |   |   | September                30, |   | December                31, |      |
|--------------------------------------------------|--------|--------|------------------------------|--------|-----------------------------|-----------|
|                                             |   |   | 2007                         |   |                        | 2006      |   |
| Estimated                contract based costs    |   | $      | 322,354                      |   | $                           | 500,000   |   |
| Accrued                interest payable          |   |   | 281,178                      |   |                        | 171,221   |   |
| Accrued                payroll and benefits      |   |   | 496,486                      |   |                        | 466,751   |   |
| Accrued                dividends payable         |   |   | 502,000                      |   |                        | —   |   |
| Accrued                warranty costs            |   |   | 117,035                      |   |                        | 233,723   |   |
| Accrued                contingent liabilities    |   |   | 249,099                      |   |                        | —   |   |
| Deferred                revenue                  |   |   | 21,200                       |   |                        | —   |   |
| Accrued                franchise and other taxes |   |   | 16,300                       |   |                        | —   |   |
| Other                                            |   |   | 39,416                       |   |                        | 45,021    |   |
|                                             |   | $      | 2,045,067                    |   | $                           | 1,416,716 |   |

----

*Net      Loss Per Share*

|                                                                  | Nine                months ended September 30, |
|-----------------------------------------------------------------------|------------------------------------------------|
|                                                                  |                                           | 2007 |   |   | 2006 |
| Notes                convertible into common stock                    |                                           |   | 67,500 |   |   | 400,006 |
| Options                to purchase common stock                       |                                           |   | 2,004,417 |   |   | 2,552,894 |
| Warrants                to purchase common stock                      |                                           |   | 7,289,958 |   |   | 5,352,914 |
| Shares                underlying Series B convertible preferred stock |                                           |   | 1,806,259 |   |   | 2,475,410 |
| Shares                underlying Series C convertible preferred stock |                                           |   | 1,598,361 |   |   | 1,639,344 |

*Share-Based      Compensation*

| Options                                        |   | Shares |      | Weighted-Average                Exercise Price |   | Weighted-Average                Remaining Contractual Terms |   | Aggregate                Intrinsic Value |   |
|------------------------------------------------|--------|--------|-----------|------------------------------------------------|--------|-------------------------------------------------------------|--------|------------------------------------------|--------|
| Balance,                January 1, 2007        |   |   | 1,444,355 |                                           | $      | 8.71                                                        |   |                                     |        |   |   |  |   |
| Granted                during the period       |   |   | 784,500   |                                           |   | —                                                     |   |                                     |        |   |   |  |   |
| Exercised                during the period     |   |   | —   |                                           |   | —                                                     |   |                                     |        |   |   |  |   |
| Expired                during the period       |   |   | (495,800  | )                                              |   | —                                                     |   |                                     |   |   |   |   |   |
| Outstanding,                September 30, 2007 |   |   | 1,733,055 |                                           | $      | 6.39                                                        |   |                                     | 6.35   |   | $ | 11,068,690 |   |
| Exercisable,                September 30, 2007 |   |   | 456,337   |                                           | $      | 6.10                                                        |   |                                     | 7.90   |   | $ | 2,785,508 |   |

|                                       |   | September                30, 2007 |                   |
|--------------------------------------------|--------|-----------------------------------|------------------------|
| Risk-free                rate              |   |                              | 4.76%                  |   |
| Expected                life, in years     |   |                              | 6                years |   |
| Expected                volatility         |   |                              | 79%                    |   |
| Weighted-average                volatility |   |                              | 79%                    |   |
| Expected                dividend yield     |   |                              | 0%                     |   |

*Recent      Accounting Pronouncements*

*SFAS      No. 157 “Fair Value Measurements”*

*SFAS      No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities,      Including an Amendment of FASB Statement No. 115”*

----

**3.      Going Concern Consideration**

| ·   | On                January 5, 2007, the Company reduced its total work force levels                from 53                to 26 persons. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | With                the agreement of the Company’s landlord, and with no further lease payment                obligations, the Company closed its Lewisville, Texas location in                early                January 2007 and combined these operations into the Company’s Durham,                North Carolina facility. In July 2007, the Company relocated its                corporate                offices, including its administrative, finance and accounting functions                to                the Durham facility. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Vigorous                collection of accounts receivable balances, and in certain cases,                the                Company requiring substantial money in advance of shipment of                links. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                January and April 2007, to conserve cash, the Company requested a                waiver                from the Series B and Series C preferred stockholders to pay their                quarterly dividend in shares of the Company’s common stock in lieu of a                cash dividend. Additionally, in consideration for agreeing to the                waiver,                the Company offered to the holders of the Series B and Series C stock                a                number of common stock purchase warrants equal to 50% of the number                of                shares of common stock. All of the Series B and Series C preferred                stockholders agreed to the waiver. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | The                Company also intends to pay the Series B and Series C stockholders                their                July and October quarterly dividend in shares of the Company’s common                stock in lieu of a cash payment. The Company is currently working                with its                investors to finalize these                payments. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                April and May of 2007, the Company received approximately $1 million                in                bridge financing from an existing investor. In August 2007, the Company                announced it had reached an agreement in principal with the same                investor                under which the investor loaned an additional $500,000 in anticipation                of                converting it and the $1 million short-term facility into Series                D                Convertible Preferred Stock. Additionally, the Company expects to                issue                common stock purchase warrants to the                investor. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                September 2007, the Company negotiated the payment of $938,329 of                its                outstanding liabilities through the issuance of 249,290 shares of                common                stock and $200,000 in notes payable. The Company does not expect                gains or                losses from debt forgiveness to be material in future periods. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company's ability to locate sources of debt or equity funding to                meet                current commitments and near-term future                requirements. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company's ability to achieve profitability and ultimately generate                sufficient cash flow from operations to sustain its continuing                operations. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**4.      Debt and other credit arrangements:**

*Convertible      notes payable*

|                                                           |   | As                of               |     |
|----------------------------------------------------------------|--------|------------------------------------|----------|
|                                                           |   |  September                30, |     |  December                31, |   |
| Convertible                notes payable                       |   | $                                  | 540,000  |   | $ | 1,802,800 |   |
| Less:                unamortized discount                      |   |                               | (117,094 | ) |   | (433,170 | ) |
| Less:                unamortized beneficial conversion feature |   |                               | (76,227  | ) |   | (318,594 | ) |
|                                                           |   | $                                  | 346,679  |   | $ | 1,051,036 |   |

----

*Note      payable, related party*

*Notes      payable, other*

|                                                          |   | As                of              |      |
|---------------------------------------------------------------|--------|-----------------------------------|-----------|
|                                                          |   | September                30, 2007 |      | December                31, 2006 |   |
| Midsummer                note                                 |   | $                                 | 1,000,000 |   | $ | - |   |
| Less:                unamortized discount on note to investor |   |                              | (250,981  | ) |   | - |   |
|                                                          |   | $                                 | 749,019   |   | $ | - |   |
| Promissory                Note - August 20, 2007              |   |                              | 500,000   |   |   | - |   |
| Promissory                Note - September 25, 2007           |   |                              | 200,000   |   |   | - |   |
| Promissory                Note - July 19, 2007                |   |                              | 25,000    |   |   | - |   |
|                                                          |   | $                                 | 1,474,019 |   | $ | - |   |

*Midsummer      note*

----

*Promissory      notes*

*Capital      leases*

| Year ended              December              31,      |   |   |    |   |
|--------------------------------------------------------|--------|--------|---------|--------|
| 2007                                                   |   | $      | 22,393  |   |
| 2008                                                   |   |   | 7,227   |   |
| 2009                                                   |   |   | 9,744   |   |
| 2010                                                   |   |   | 9,744   |   |
| 2011                                                   |   |   | 6,498   |   |
| Total                payment obligation                |   |   | 55,606  |   |
| Less                amount representing interest       |   |   | (8,466  | )      |
| Present                value of net minimum obligation |   |   | 47,140  |   |
| Less                current portion                    |   |   | (22,393 | )      |
| Non                current portion                     |   | $      | 24,747  |   |

** **

----

**5.**
**Income      Taxes**

**6.      Equity Issues**

*Series      A*

*Series      B*

----

*Series      C*

----

**7.      Commitments and contingencies**

----

| Remainder                of 2007 |   | $      | 254,725 |   |
|----------------------------------|--------|--------|---------|--------|
| 2008                             |   |   | 285,459 |   |
| 2009                             |   |   | 137,761 |   |
| 2010                             |   |   | 135,663 |   |
| 2011                             |   |   | — |   |
|                             |   | $      | 813,608 |   |

**8.      Subsequent Events**

**9.      Related Party Transactions**

*Note      payable, related parties*

----

**Item      2. Management’s Discussion and Analysis or Plan of      Operation**

**CAUTIONARY      STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS**

**Overview**

*E*

**Industry      Dynamics**

| ·   | Economic                conditions - General economic conditions can have a significant effect                on                our customers’ willingness to invest in wireless technology, and                particularly, last mile implementation and enterprise communication                technology. As economic conditions have globally improved since our                inception, we have seen indications that enterprises may be more                willing                to invest in communication technology. While the world economy is                expected                to grow, variability in corporate profit growth, interest rates,                energy                prices and other factors in specific markets could impact the willingness                of corporate, governmental and other markets to invest in communication                technology in the near term. Additionally, the variability in worldwide                economic growth could also impact our business as growth rates of                developed and more stable economies tend to be lower than that of                emerging                economies, where economic growth could be more                volatile. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Developing                market - The market for high speed point to point wireless products                is in                its infancy. Our sales are dependent upon corporations, governments                and                other enterprises adopting this new technology. While we have seen                increased demand for our products, the market is still in the early                stages                of development and the growth in the market may be volatile for the                foreseeable future. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Competitive                environment - Although we believe that we are one of the first entrants                into the high speed point to point wireless products market, other                companies are currently marketing similar products. Additionally,                as the                carrier, reseller and enterprise communication markets evolve, we                expect                more companies, which may be better capitalized than we are, to develop                competing products. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Customer                trials - Many of our customers require a trial period with our products                before they commit to buying the products. This trial period is                unpredictable and can often last for several                months. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Critical      Accounting Policies **

|  **Description                  of Policy**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |  **Judgments                  and Uncertainties**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **Effect                  If Actual Results Differ****From                  Assumptions and****Adjustments                  Recorded**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Revenue                  Recognition:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| We                  account for revenue in accordance with the revenue recognition                  criteria                  set forth in Staff Accounting Bulletin 104, EITF 00-21. In addition,                  certain of our sales arrangements provide for limited trial periods.                  As a                  result, we do not record revenue at the time of sale.                                                                                                                                                                                                                                                                                                    |   | We                  apply judgment in estimating the collectability and based on our                  estimates, record a reserve allowance. Our estimate of product                  returns and                  the amount of those returns that will be placed back in inventory                  is based                  primarily on historical transactional experience and judgment regarding                  market factors and trends.                                                                                                                                                                                                                                                                                                                 |   | Revenue                  could be more or less than recorded if our estimates are                  incorrect.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Accounting                  for Stock-Based Compensation:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| We                  account for stock-based compensation arrangements in accordance                  with the                  provisions of Statement of Financial Accounting Standards No. 123                  (revised 2004), “Shared-Based Payment,” or SFAS 123R. Under SFAS 123R,                  compensation cost is calculated on the date of the grant using                  the                  Black-Scholes model. The compensation expense is then amortized                  over the                  vesting period.                                                                                                                               |   | We                  use the Black-Scholes model in determining fair value of our options                  at                  the grant date and apply judgment in estimating the key assumptions                  that                  are critical to the model such as the expected term, volatility                  and                  forfeiture rate of an option. Our estimate of these key assumptions                  is                  based on historical information and judgment regarding market factors                  and                  trends.                                                                                                                                                                                         |   | If                  actual results are not consistent with our assumptions and judgments                  used                  in estimating key assumptions, we may be required to adjust compensation                  expense, which could be material to our results of                  operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Accrual                  for Other Liabilities:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| We                  make estimates for the amount of costs that have been incurred                  but not yet                  billed for general services, including legal fees, accounting fees,                  other                  expenses and contingent liabilities.                                                                                                                                                                                                                                                                                                                                                                                                        |   | Our                  liabilities contain uncertainties because we must make assumptions                  and                  apply judgment to estimate the ultimate cost to settle claims and                  claims                  incurred but not reported as of the balance sheet date. When estimating                  our liabilities, we consider a number of factors, including interviewing                  our service providers for bills that have not yet been                  received..                                                                                                                                                                                                                                                      |   | If                  actual costs billed to us are not consistent with our assumptions                  and                  judgments, our expenses could be understated or overstated and                  these                  adjustments could materially affect our net income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Inventories:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| We                  value our inventory at the lower of cost of the inventory or fair                  market                  value by establishing a write-down or an inventory loss                  reserve. We                  base our lower of cost or market write-down on the excess carrying                  value                  of the inventory, which is typically its cost, over the amount                  that we                  expect to realize from the ultimate sale of the inventory based                  upon our                  assumptions regarding the average sales price to be received for                  the                  product. |   | Our                  inventory reserve is based on our analysis of sales levels by product                  and                  projections of future customer demand derived from historical order                  patterns and input received from our customers and our sales team.                  We                  reserve for items that are considered obsolete based on changes                  in                  customer demand, manufacturing process changes or new product                  introductions that may eliminate demand for a product. When inventory                  is                  physically destroyed, we remove the inventory and the associated                  reserve                  from our financial records. |   | If                  our estimates regarding customer demand and physical inventory                  losses are                  inaccurate or changes in technology affect demand for certain products                  in                  an unforeseen manner, we may be exposed to losses or gains in excess                  of                  our established reserves that could be material. As                  of September 30, 2007 the amount of our inventory reserve was $1.65                  million. A                  10% increase or decrease in our actual inventory reserve at September                  30,                  2007 would have affected net income by approximately $165,000 for                  the nine                  months ended September 30, 2007. |

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**Results      of Operations**

|                                                |   |   |  Three                Months Ended September 30, |   |
|-----------------------------------------------------|--------|--------|-------------------------------------------------------|--------|
|                                                |   |   | 2007                                             |   |   | 2006  |   |
|                                                |   |   |                                                  |   |   |   |   |   |   |   |   |   |   |
| Net                sales                            |   |   | 100                                                   | %      | $ | 445,863 |   |   | 100 | % | $ | 2,045,941 |   |
| Gross                profit                         |   |   | 52                                                    | %      |   | 233,926 |   |   | 32 | % |   | 645,403 |   |
| Research                and development             |   |   | 212                                                   | %      |   | 943,036 |   |   | 59 | % |   | 1,208,201 |   |
| General                and administrative           |   |   | 471                                                   | %      |   | 2,100,386 |   |   | 59 | % |   | 1,209,308 |   |
| Selling                and marketing                |   |   | 149                                                   | %      |   | 663,227 |   |   | 63 | % |   | 1,289,368 |   |
| Service,                install and link operations |   |   | 74                                                    | %      |   | 330,705 |   |   | 42 | % |   | 849,102 |   |
| Net                loss                             |   |   | (924                                                  | %)     |   | (4,120,967 | ) |   | (201 | %) |   | (4,118,489 | ) |

|                                                |   | Nine                Months Ended September 30, |   |
|-----------------------------------------------------|--------|------------------------------------------------|--------|
|                                                |   |  2007                                |   |  2006    |   |
| Net                sales                            |   |                                           | 100    | % | $ | 2,798,568 |   |   | 100 | % | $ | 4,401,140 |   |
| Gross                profit                         |   |                                           | 26     | % |   | 714,842 |   |   | 28 | % |   | 1,247,411 |   |
| Research                and development             |   |                                           | 88     | % |   | 2,449,474 |   |   | 87 | % |   | 3,840,557 |   |
| General                and administrative           |   |                                           | 150    | % |   | 4,210,056 |   |   | 108 | % |   | 4,752,691 |   |
| Selling                and marketing                |   |                                           | 58     | % |   | 1,618,290 |   |   | 88 | % |   | 3,852,825 |   |
| Service,                install and link operations |   |                                           | 36     | % |   | 1,006,818 |   |   | 54 | % |   | 2,394,498 |   |
| Net                loss                             |   |                                           | (341   | %) |   | (9,546,809 | ) |   | (324 | %) |   | (14,242,291 | ) |

*Comparison      of Three Months ended September 30, 2007 and 2006*

*Sales*

*Gross      profit.*

*Research      and development.*

*General      and administrative.*

----

*Selling      and marketing.*

*Service,      install and link operations.*

*Comparison      of Nine Months ended September 30, 2007 and 2006*

*Sales*.      Net      sales were 2,798,568 for the nine months ended September 30, 2007 compared      to      $4,401,140 for the nine months ended September 30, 2006, a decrease of $1.6      million or 36%. During 2007, we experienced liquidity issues and became focused      on conserving cash, including terminating approximately 50% of employees. As      a      result, sales decreased. 

*Gross      profit.*

*Research      and development.*

*General      and administrative.*

*Selling      and marketing.*

*Service,      install and link operations.*

**Liquidity      and Capital Resources**

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**MATERIAL      TRENDS AND UNCERTAINITIES**

| ·   | Cost                reduction, including a 50% reduction in staff during the first quarter                of                2007 |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| ·   | Negotiating                stock and warrant issuances in lieu of cash dividends on our Series                B                & C preferred stock |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| ·   | Negotiating                partial satisfaction of accounts payable balances with common stock                issuances |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | accessing                public and private capital markets for additional equity and/or debt                financing, |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| ·   | collection                of accounts receivable balances, |
|--------------------|------------------------------------------------------------|

|   |   |
|--------|--------|

| ·   | common                stock warrant exercise, and |
|--------------------|---------------------------------------------------|

|   |   |
|--------|--------|

| ·   | sales                and related collection of our WiFiber                products. |
|--------------------|-------------------------------------------------------------------------------------|

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**OFF-BALANCE      SHEET ARRANGEMENTS**

**Item      3. Controls and Procedures**

**Evaluation      of Internal Controls and Procedures**

| ·   | Insufficient                resources within the accounting department resulting from significant                turnover related to the relocation of our corporate headquarters                from                Virginia to North Carolina; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Lack                of accounting expertise at our company; |
|--------------------|-------------------------------------------------------------|
| ·   | Human                errors in entering accounting information in our                system; |
|--------------------|----------------------------------------------------------------------------------------------|
| ·   | Lack                of internal or external resources with expertise on the proper accounting                for the complex equity transactions in which we                participate; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Insufficient                communication and documentation of our complex equity transactions;                and |
|--------------------|--------------------------------------------------------------------------------------------------------------------|
| ·   | Lack                of proper review of reconciliations and conclusions reached by the                accounting staff. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|
| ·   | Re-engineering                the accounting staff including: |
|--------------------|---------------------------------------------------------------|
| o   | Initiated                a search for a Corporate Controller |
|---------------|--------------------------------------------------------------|
| o   | Initiated                a search for an Accounting Manager |
|---------------|-------------------------------------------------------------|
| o   | Hired                a permanent staff accountant and accounts payable                clerk |
|---------------|---------------------------------------------------------------------------------------------|
| ·   | Obtaining                training on the use of our accouting system for our new accounting                employees; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|
| ·   | Enhancing                automated procedures within our accounting system to make transaction                process more efficient.; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Identify                and engage a firm with appropriate expertise in accounting for complex                equity transactions. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

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**Changes      in Internal Control over Financing Reporting**

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**Part      II. Other Information**

**Item      1. Legal Proceedings**

**Item      2. Issuance of Unregistered Securities**

**Item      3. Defaults Upon Senior Securities**

**Item      4. Submission of Matters to a Vote of Security Holders**

**Item      5. Other Information**

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**Item      6. Exhibits**

**EXHIBIT      INDEX**

| **Exhibit****Number** |   | **Exhibit                Title**                                                                                                                                                                                                                                                                  |
|-----------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                   |   | Amended                and Restated Certificate of Incorporation (included as Exhibit 3.1                to the                Form S-1 filed May 28, 2004, and incorporated herein by                reference).                                                                                 |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 3.2                   |   | Amended                and Restated Bylaws (included as Exhibit 3.2 to the Form S-1 filed                May 28,                2004, and incorporated herein by reference).                                                                                                                      |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 3.3                   |   | Certificate                of Designation of the 10% Series A Redeemable Preferred Stock, dated                May                6, 2005 (included as Exhibit 3.1 to the Form 8-K filed May 12, 2005,                and                incorporated herein by reference).                       |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 3.4                   |   | Certificate                of Designation of the Series B Convertible Preferred Stock, dated                November                4, 2005 (included as Exhibit 3.1 to the Form 8-K filed November 8,                2005,                and incorporated herein by reference).                 |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 3.5                   |   | Certificate                of Designation of the Series C Convertible Preferred Stock, dated                August                21, 2006 (included as Exhibit 3.1 to the Form 8-K filed August 22,                2006,                and incorporated herein by reference).                   |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 4.1                   |   | Purchase                Option between the Company and HCFP/Brenner Securities LLC, dated                October                13, 2004 (included as Exhibit 4.1 to the Form 10-KSB filed April                15, 2005,                and incorporated herein by reference).                   |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 4.2                   |   | Purchase                Option between the Company and HCFP/Brenner Securities LLC, dated                January                28, 2005 (included as Exhibit 4.8 to the Form SB-2/A filed July 14,                2005,                and incorporated herein by reference).                    |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 4.3                   |   | Form                of Common Stock Purchase Warrants (included as Exhibit 4.1 to the                Form 8-K                filed May 12, 2005, and incorporated herein by                reference).                                                                                            |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 4.4                   |   | Purchase                Option between the Company and HCFP/Brenner Securities LLC, dated                November                7, 2005 (included as Exhibit 4.7 to the Form SB-2 filed December                7, 2005,                and incorporated herein by reference).                   |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 4.5                   |   | Purchase                Option between the Company and HCFP/Brenner Securities LLC, dated                November                7, 2005 (included as Exhibit 4.8 to the Form SB-2 filed December                7, 2005,                and incorporated herein by reference).                   |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 4.6                   |   | Registration                Rights Agreement between the Company and the Purchasers signatory                thereto,                dated November 7, 2005 (included as Exhibit 4.1 to the Form 8-K filed                November 8, 2005, and incorporated herein by                reference). |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 4.7                   |   | Registration                Rights Agreement between the Company and the Purchasers signatory                thereto,                dated August 21, 2006 (included as Exhibit 4.1 to the Form 8-K/A                filed                August 22, 2006, and incorporated herein by reference). |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 31.1                  |   | Certification                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002.                                                                                                                                                                 |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 31.2                  |   | Certification                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002.                                                                                                                                                                 |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 32.1                  |   | Certification                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of                2002.                                                                                    |
|                  |   |                                                                                                                                                                                                                                                                                              |
| 32.2                  |   | Certification                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                .                                                                                   |

----

**Signatures**

|                                      |                                 |                                                        |
|-------------------------------------------|--------------------------------------|-------------------------------------------------------------|
|                                      | GigaBeam              Corporation    |
|                                 |                            |                                                   |
| Date: November              19, 2007 |                            | /s/ Louis              S.              Slaughter  |
|                                      | Louis              S. Slaughter      |
|                                      | Chief Executive              Officer |

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