Terabeam Wireless Announces Third Quarter 2005 Financial Results

Terabeam Wireless, the business name of YDI Wireless,
Inc. (NASDAQ:YDIW), a leading developer and supplier of broadband
wireless solutions, today announced its financial results for its
third quarter ended September 30, 2005. These financial results
include, for the period beginning on July 27, 2005, results from the
operations that Terabeam Wireless acquired from Proxim Corporation on
July 27, 2005.
   Revenue for the quarter ended September 30, 2005 was $18.1
million, an increase of approximately 151% from the revenue of $7.2
million for the quarter ended June 30, 2005 and an increase of
approximately 183% from the revenue of $6.4 million for the quarter
ended September 30, 2004. The significant increase in revenue over the
prior quarter and prior year resulted primarily from the acquisition
of the operations of Proxim Corporation that was completed in the
third quarter 2005.
   The net loss attributable to common shareholders computed in
accordance with generally accepted accounting principles (GAAP) for
the quarter ended September 30, 2005 was $10.0 million ($0.47 per
share-diluted) compared with a GAAP net loss of $987,000 ($0.04 per
share-diluted) for the quarter ended June 30, 2005 and a GAAP net loss
of $2.4 million ($0.09 per share-diluted) for the quarter ended
September 30, 2004.
   The third quarter 2005 GAAP net loss attributable to common
shareholders included $7.8 million of restructuring provisions and
charges as a result of the purchase of the operations of Proxim
Corporation by Terabeam Wireless. The non-cash provisions and charges
totaled $6.8 million and consisted of (i) $2.1 million for excess and
obsolete Terabeam inventory, (ii) $3.6 million for impairment of our
Terabeam trade name, and (iii) approximately $1.1 million for the
write-off of capitalized Terabeam software development. In addition,
there were one time restructuring charges of approximately $944,000
relating to severance and leased buildings that were vacated.
   Pro forma net loss for the third quarter of 2005 was approximately
$2.3 million ($0.11 per share-diluted), compared with a pro forma net
loss for the second quarter of 2005 of $987,000 ($0.04 per
share-diluted) and a pro forma net loss for the third quarter of 2004
of $2.4 million ($0.09 per share-diluted). These pro forma numbers are
intended to present what the company's net loss would have been
without the restructuring charges described in the preceding
paragraph. Management believes that presenting a GAAP to pro forma net
loss reconciliation may permit investors to better compare results
from period to period and more accurately assess the company's
prospects in a normal operating period. A detailed and specific
reconciliation is included in an accompanying financial table.
   Robert Fitzgerald, Terabeam's Chief Executive Officer, stated,
"This quarter was an extremely exciting and challenging quarter as we
acquired and integrated the assets and operations of Proxim
Corporation. We are very pleased with the loyalty of Proxim's
customers and channel partners and the demand for our products. We are
working diligently to balance our cost structure with our revenue
level. We believe that we are positioned to deliver much stronger
results in the fourth quarter."

   Corporate Name and Ticker Symbol Changes

   As previously announced, YDI Wireless will be changing its
corporate name to "Terabeam, Inc." and its ticker symbol to "TRBM."
These changes will become effective shortly before markets open on
Monday, November 7, 2005.

   Conference Call Information

   Terabeam Wireless will host a conference call to discuss this
release, financial results, developments at the company, and other
matters of interest to investors and others on November 3, 2005
starting at 5:00 p.m. Eastern Time. The discussion may include
forward-looking information.
   To participate in this conference call, please dial 800-946-0716
(or 719-457-2644 for international callers), confirmation code 7450401
for all callers, at least ten minutes before start time. The
conference call will also be broadcast live over the Internet.
Investors and others are invited to visit Terabeam Wireless' website
at http://www.terabeam.com/corporate to access this broadcast. Replays
will be available telephonically for approximately one week by dialing
888-203-1112 for domestic callers and 719-457-0820 for international
callers, confirmation code 7450401 for all callers, and over the
Internet for approximately 90 days at Terabeam Wireless' website at
http://www.terabeam.com/corporate.

   About YDI Wireless / Terabeam

   YDI Wireless, Inc. has been using Terabeam Wireless as a business
name and will soon be renamed Terabeam, Inc. The company's subsidiary
Proxim Wireless Corporation is a global leader in providing Wi-Fi and
other broadband wireless solutions to meet the performance,
scalability, and security requirements of enterprises, government, and
service providers. The company's subsidiary Ricochet Networks, Inc. is
a leading portable Wireless Internet Service Provider (WISP) with
operational markets in Denver and Aurora, Colorado and San Diego,
California. Additional information about the company can be found at
the company's website located at http://www.terabeam.com or by
contacting the company by telephone at 413-584-1425 or by email at
[e-mail].

   Safe Harbor Statement

   Statements in this press release that are not statements of
historical facts are forward-looking statements that involve risks,
uncertainties, and assumptions. Terabeam Wireless' actual results may
differ materially from the results anticipated in these
forward-looking statements. The forward-looking statements involve
risks and uncertainties that could contribute to such differences
including those relating to the downturn and ongoing uncertainty in
the telecommunications industry and larger economy; the intense
competition in Terabeam Wireless' industries and resulting impacts on
its pricing, gross margins, and general financial performance;
difficulties in predicting Terabeam Wireless' future financial
performance; difficulties or delays in developing and supplying new
products with the contemplated or desired features, performance, cost,
price, and other characteristics; difficulties in supplying products
at the times and in the quantities desired by customers; risks arising
from and relating to Terabeam Wireless' recent acquisition of Proxim
Corporation's operations, assets, and relationships, including without
limitation risks of patent infringement claims and related litigation;
and the impacts and effects of any other strategic transactions
Terabeam Wireless may evaluate or consummate. Further information on
these and other factors that could affect Terabeam Wireless' actual
results is and will be included in filings made by Terabeam Wireless
from time to time with the Securities and Exchange Commission and in
its other public statements.

   Use of Pro Forma Financial Information

   To supplement our consolidated financial statements presented on a
GAAP basis, Terabeam Wireless has presented non-GAAP, or pro forma,
measures of net loss and loss per share, which are adjusted to exclude
certain costs, expenses, gains and losses that we believe are useful
to enhance the overall understanding of our financial performance.
These adjustments to our GAAP results are made with the intent of
providing investors a supplemental understanding of Terabeam Wireless'
underlying operational results and trends. The presentation of this
additional information is not meant to be considered in isolation or
as a substitute for Terabeam Wireless' financial results prepared in
accordance with GAAP in the United States of America.
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                          YDI WIRELESS, INC.
                      CONSOLIDATED BALANCE SHEETS
                 (in thousands, except per share data)


                                          September 30,  December 31,
                                              2005           2004
                                         --------------- -------------
                                           (unaudited)
Assets
Current assets:
 Cash and cash equivalents                       $8,743       $35,368
 Investment securities - available-for-
  sale                                              263         5,369
 Accounts receivable, net                         8,973         2,972
 Refundable income taxes                              0           151
 Inventory                                        9,252         7,442
 Prepaid expenses                                 1,131           253
                                         --------------- -------------
   Total current assets                          28,362        51,555

Property and equipment, net                       4,152         2,511
Other Assets:
 Restricted cash                                  5,076         5,136
 Goodwill                                         6,663         6,072
 Intangible assets, net                          20,924        11,919
 Deposits                                           388            91
                                         --------------- -------------
   Total other assets                            33,051        23,218
                                         --------------- -------------
   Total assets                                 $65,565       $77,284
                                         =============== =============
Liabilities and Stockholders' Equity
Current liabilities:
 Accounts payable and accrued expenses          $11,810        $6,965
 Deferred revenue                                 1,673           159
 Current maturities of notes payable                135         2,899
                                         --------------- -------------
   Total current liabilities                     13,618        10,023
Notes payable, net of current maturities             97         1,270
                                         --------------- -------------
   Total liabilities                             13,715        11,293
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.01 par value;
 authorized 4,500,000, none issued at
 September 30, 2005 and December 31,
 2004                                                 -             -
Common stock, $0.01 par value,
 100,000,000 shares authorized,
 21,408,910 issued and outstanding at
 September 30, 2005 and 22,845,847
 issued with 22,345,847 outstanding at
 December 31, 2004                                  214           228

 Additional paid-in capital                      56,580        59,637
 Retained earnings                               (4,933)        7,277
 Treasury stock                                       0        (1,155)
 Accumulated other comprehensive income:
 Net unrealized gain (loss) on
  available-for-sale securities                     (11)            4
                                         --------------- -------------
   Total stockholders' equity                    51,850        65,991
                                         --------------- -------------
   Total liabilities and stockholders'
    equity                                      $65,565       $77,284
                                         =============== =============



                          YDI WIRELESS, INC.
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except per share data)
                              (unaudited)


                                   For the Three      For the Nine
                                    Months Ended       Months Ended
                                   September 30,      September 30,
                                 ------------------ ------------------
                                   2005     2004      2005     2004
                                 --------- -------- --------- --------
Revenues                          $18,147   $6,370   $31,909  $17,120
Cost of goods sold                 10,503    3,682    17,509   10,426
Restructuring provision for
 excess and obsolete inventory      2,143        0     2,143        0
                                 --------- -------- --------- --------
 Gross profit                       5,501    2,688    12,257    6,694
Operating expenses:
 Selling costs                      3,800      879     5,831    1,799
 Restructuring charges                944        0       944        0
 Restructuring charge for
  impairment of intangible
  assets                            4,664        0     4,664        0
 General and administrative         3,342    3,381     8,627    7,288
 Research and development           2,788    1,069     4,438    2,038
                                 --------- -------- --------- --------
    Total operating expenses       15,538    5,329    24,504   11,125
                                 --------- -------- --------- --------
Operating income (loss)           (10,037)  (2,641)  (12,247)  (4,431)
Other income (expenses):
 Interest income                      122      360       612      410
 Interest expense                      (4)     (76)     (140)    (139)
 Other income (loss)                   10        6      (106)     509
                                 --------- -------- --------- --------
    Total other income
     (expenses)                       128      290       366      780
                                 --------- -------- --------- --------
Income (loss) before income
 taxes                             (9,909)  (2,351)  (11,881)  (3,651)
 Benefit (provision) for income
  taxes                                (3)       0        11       (2)
                                 --------- -------- --------- --------
Income (loss) before minority
 interest                          (9,912)  (2,351)  (11,870)  (3,653)
 Minority interest in net income
  of Merry Fields                    (101)       0      (101)       0
                                 --------- -------- --------- --------
Net income (loss)                ($10,013) ($2,351) ($11,971) ($3,653)
                                 ========= ======== ========= ========

 Weighted average shares - basic
  and diluted                      21,163   26,218    21,932   18,788
                                 --------- -------- --------- --------
   EPS, basic and diluted          ($0.47)  ($0.09)   ($0.55)  ($0.19)
                                 ========= ======== ========= ========



                          YDI WIRELESS, INC.
               GAAP to Pro Forma Net Loss Reconciliation
                 (in thousands, except per share data)
                              (unaudited)


                                   For the Three      For the Nine
                                    Months Ended       Months Ended
                                   September 30,      September 30,
                                 ------------------ ------------------
                                   2005     2004      2005     2004
                                 --------- -------- --------- --------
GAAP net income (loss)           ($10,013) ($2,351) ($11,971) ($3,653)
Restructuring provision for
 excess and obsolete inventory      2,143        0     2,143        0
Restructuring charges relating
 to operating expenses:
     Severance for personnel          279        0       279        0
     Lease reserves for
      unutilized facilities           665        0       665        0
     Impairment for Terabeam
      trade name                    3,600        0     3,600        0
     Write-off of capitalized
      software development          1,064        0     1,064        0
                                 --------- -------- --------- --------
Pro forma net income (loss)       ($2,262) ($2,351)  ($4,220) ($3,653)
                                 --------- -------- --------- --------

                                 --------- -------- --------- --------
Weighted average shares - basic
 and diluted                       21,163   26,218    21,932   18,788
                                 --------- -------- --------- --------
Pro forma EPS, basic and diluted   ($0.11)  ($0.09)   ($0.19)  ($0.19)
                                 ========= ======== ========= ========
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