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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  Mark Oneþ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For The Fiscal Year Ended
    December 31, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Transition Period
    from          to   Commission File Number
    333-147720
 Broadview Networks Holdings,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

11-3310798(I.R.S. Employer
    Identification Number)800 Westchester Avenue,
    Suite N501 Rye Brook, NY 10573(Address of principal
    executive offices)

10573(Zip
    Code)  (914) 922-7000
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
 NONE
  Securities registered pursuant to Section 12(g) of the
    Act:
 NONE
  o þ
  þ o
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller
    reporting
    company o   Rule 12b-2 o þ
    NOT APPLICABLE because no public equity market exists for
    such shares, the aggregate market value of the common stock held
    by non-affiliates of the Company is not determinable.
    Class

Outstanding at March 24, 2009Series A common stock, $.01 par value

9,342,880Series B common stock, $.01 par value

360,050   DOCUMENTS
    INCORPORATED BY REFERENCE
 NONE.




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##### 





TABLE OF
    CONTENTS
  PagePART IItem 1.


Business


1Item 1A.


Risk Factors


26Item 1B.


Unresolved Staff Comments


39Item 2.


Properties


39Item 3.


Legal Proceedings


39Item 4.


Submission of Matters to a Vote of Security
    Holders


40PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


40Item 6.


Selected Consolidated Financial Data


40Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


43Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


61Item 8.


Financial Statements and Supplementary Data


62Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


92Item 9A.


Controls and Procedures


92Item 9B.


Other Information


93PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


93Item 11.


Executive Compensation


99Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


107Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


110Item 14.


Principal Accountant Fees and Services


111PART IVItem 15.


Exhibits and Financial Statement Schedules


112Schedule II


Valuation and Qualifying Accounts


112EX-3.1: TENTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATIONEX-10.21: ESCROW AGREEMENTEX-10.22: 1997 STOCK OPTION PLANEX-10.23: 2000 STOCK OPTION PLANEX-12.1: RATIO OF EARNINGS TO FIXED CHARGESEX-21.1: SUBSIDIARIES OF BROADVIEW NETWORKS HOLDINGS, INC.EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION      3 8
 i




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3 8
 ii




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SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
    
    servicing our substantial indebtedness;
    our history of operating losses;
    the elimination or relaxation of certain regulatory rights and
    protections;
    billing and other disputes with vendors;
    failure to maintain interconnection and service agreements with
    incumbent local exchange and other carriers;
    the loss of customers in an adverse economic environment;
    regulatory uncertainties in the communications industry;
    system disruptions or the failure of our information systems to
    perform as expected;
    the failure to anticipate and keep up with technological changes;
    inability to provide services and systems at competitive prices;
    difficulties associated with collecting payment from incumbent
    local exchange carriers, interexchange carriers and wholesale
    customers;
    the highly competitive nature of the communications market in
    which we operate including competition from incumbents, cable
    operators and other new market entrants, and declining prices
    for communications services;
    continued industry consolidation;
    the intellectual property infringement litigation involving the
    provision of Voice over Internet Protocol (VoIP)
    services;
    restrictions in connection with our indenture governing the
    notes and credit agreement governing the credit facility;
    government regulation;
    increased regulation of Internet-protocol-based service
    providers;
    vendor bills related to past periods; iii




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
    the ability to maintain certain real estate leases and
    agreements;
    interruptions in the business operations of third party service
    providers;
    the loss of our customers;
    limits on our ability to seek indemnification for losses from
    individuals and entities from whom we have acquired assets and
    operations;
    disruption and instability in the financial markets;
    the financial difficulties by others in our industry;
    the failure to retain and attract management and key personnel;
    the failure to manage and expand operations effectively;
    the failure to successfully engage in future acquisitions;
    misappropriation of our intellectual property and proprietary
    rights;
    the possibility of incurring liability for information
    disseminated through our network;
    service network disruptions due to software or hardware bugs of
    the network equipment; and
    fraudulent usage of our network and services.   iv




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PART I  Item 1.
    Business  Company
    Overview
      on-net.
     1




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on-net off-net
      Industry
    Overview
   2




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Our
    Strengths
    Significant Growth Potential of Our Newer Product
    Offerings.
  Experience Integrating Companies and Providing New
    Services. off-net
  Unique Integrated OSS Infrastructure. e-Care
  Award Winning Customer Service. ®
 3




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Facilities-Based Network Infrastructure. on-net.
  Experienced and Proven Senior Management
    Team. off-net
  Our
    Markets
  ,
  Region

MarketNew York Metro

New York City
    Long Island
    WestchesterPennsylvania

Allentown
    Harrisburg
    PhiladelphiaUpstate New York

Buffalo
    Syracuse
    AlbanyMassachusetts

Boston Metro
    Western MANew Jersey

Northern NJ
    Southern NJRhode Island

Rhode IslandNew Hampshire

New HampshireMaryland

BaltimoreDelaware

DelawareDistrict of Columbia

District of ColumbiaNorthern Virginia

Northern VirginiaConnecticut

Connecticut  4




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Our
    Customers
        Products
    and Services
  IP-based
  IP-based
 5




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Value-Added Products and Services

Data Services

Voice Services Hosted VoIP solutions
     Automated attendant
     Unified messaging
     Telecommuting
     Integrated services
     Traditional and converged telephone systems
     Enhanced
    e-mail
    security
     Managed firewall
     Content filtering
     Managed Wide Area Network
     Local Area Network/Wide Area Network integration
     Inside wiring
     Data backup and recovery
     Disaster recovery services
     Unified Communications solutions
     Fixed-Mobile Convergence solutions

 Dedicated Internet T-1 access
     Broadband Internet access
     Dial-up, DSL data service and Symmetric DSL Internet
    access
     E-mail
     Collocation
     IP Virtual Private Networks (MPLS and Remote Access
    Switching)
     Metro Ethernet Services

 Local, regional, domestic and international
    services
     T-1 Primary rate interface and Session Initiation
    Protocol services
     Private line
     Voicemail
     Caller identification
     Call waiting
     Call forwarding
     Conference calling
     VoIP
     Toll free services   Value-Added
    Products and Services
    Hosted VoIP Solutions.
  Integrated Services.
 6




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IP-based IP-based IP-based
  Managed Services. e-mail
  Data
    Services
  IP-based
  Voice
    Services
  IP-based
  Sales and
    Marketing
  on-net
 7




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Customer
    Service and Retention
       8




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e-Care e-Care e-mail
  Network
    Deployment
  first-mile
  Voice
    and Data Switches
    Collocations
    and Edge Equipment
  T-ls,
  On-Net
    (Lit) Buildings
   9




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ATM
    Backbone Network and IP Network Equipment
  IP-based
  Fiber
    Network and Fiber Equipment
    Feature/Application
    Servers
    Customer
    Access Methods
  off-net and/or on-net
    on-net on-net
 10




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On-net T-1: On-net T-1
  On-net
    unbundled network element loops: on-net
  Off-Net: Off-net Off-net off-net and/or off-net
  Service
    Agreements with Carriers
  off-net off-net
   11




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Integrated
    OSS
      Sales,
    Order Entry and Provisioning Systems
       12




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Customer
    Relationship Management System
  e-Care e-Care e-Care
  Network
    Management Systems
    Billing
    System
  e-Care
 13




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Cost
    Assurance System
    Collections
    Management System
    Competition
    Regional
    Bell Operating Companies
      Competitive
    Local Exchange Carriers and New Market Entrants
     14




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Interexchange
    Carriers
    Data/Internet
    Services Providers
    Vendors,
    Installers and Communication Management Companies
    Intellectual
    Property
      Employees
    Available
    Information
  Form 10-K, Form 10-Q, Form 8-K,
 15




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(http://www.sec.gov) (1-800-SEC-0330) http://www.broadviewnet.com.
  Form 10-K.
  Directors, Executive Officers and Corporate
    Governance  Code of Business Conduct and Ethics
  Regulation
  Overview
        Federal
    Regulation
     16




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
    Reciprocal Compensation.  Requires all
    incumbent local exchange carriers and competitive local exchange
    carriers to complete calls originated by competing carriers
    under reciprocal arrangements at prices based on a reasonable
    approximation of incremental cost or through mutual exchange of
    traffic without explicit payment.
    Resale.  Requires all incumbent local exchange
    carriers and competitive local exchange carriers to permit
    resale of their communications services without unreasonable or
    discriminatory restrictions or conditions. In addition,
    incumbent local exchange carriers are required to offer for
    resale wholesale versions of all communications services that
    the incumbent local exchange carrier provides at retail to
    subscribers that are not telecommunications carriers at
    discounted rates, based on the costs avoided by the incumbent
    local exchange carrier in the wholesale offering.
    Access to Rights-of-Way.  Requires all
    incumbent local exchange carriers and competitive local exchange
    carriers and any other public utility that owns or controls
    poles, conduits, ducts, or rights-of-way used in whole or in
    part for wire communications, to permit competing carriers (and
    cable television systems) access to those poles, ducts, conduits
    and rights-of-way at regulated prices. Competitive local
    exchange carrier rates for access to its poles, ducts, conduits
    and rights-of-way, however, are not regulated.    Legislation.
  Unbundled Network Elements.
   17




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and/or
  Special Access. and/or
 19




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Interconnection Agreements. state-by-state
    Collocation. and/or
  Regulation of Internet Service Providers.
    Long Distance Competition.
 20




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Detariffing.
  Intercarrier Compensation.
     21




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Verizon/MCI Merger.
  CALEA. and/or
    Customer Proprietary Network Information.
 22




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Universal Service.
      Telephone Numbering.
  Slamming.
  Taxes and Regulatory Fees.
 23




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and/or
  State
    Regulation
          and/or
 24




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Local
    Regulation
    Regulation
    of VoIP
  Federal
    and State
        IP-based IP-based
 25




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IP-enabled IP-enabled
    Other
    Domestic Regulation
    Item 1A.
    Risk
    Factors  Our business faces many risks. Accordingly, prospective
    investors and shareholders should carefully consider the risks
    and uncertainties described below and the other information in
    this report, including the consolidated financial statements and
    notes to consolidated financial statements. If any of the
    following risks or uncertainties actually occurs, our business,
    financial condition or results of operations would likely
    suffer. Additional risks and uncertainties not presently known
    to us or that are not currently believed to be important to you
    also may adversely affect our company.
 26




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Our
    substantial indebtedness may restrict our operating flexibility,
    could adversely affect our financial health and could prevent us
    from fulfilling our financial obligations.
    
    make it more difficult for us to satisfy our current and future
    debt obligations;
    make it more difficult for us to obtain additional financing for
    working capital, capital expenditures, acquisitions or general
    corporate purposes;
    require us to dedicate a substantial portion of our cash flows
    from operating activities to the payment of principal and
    interest on our indebtedness, thereby reducing the funds
    available to us for our operations and other purposes, including
    investments in service development, capital spending and
    acquisitions;
    place us at a competitive disadvantage to our competitors who
    are not as highly leveraged as we are;
    make us vulnerable to interest rate fluctuations, if we incur
    any indebtedness that bears interest at variable rates;
    impair our ability to adjust to changing industry and market
    conditions; and
    make us more vulnerable in the event of a further downturn in
    general economic conditions or in our business or changing
    market conditions and regulations.    3 8
  We
    have a history of operating losses and we may not be profitable
    in the future.
    Our
    current billing disputes with our vendors may cause us to pay
    our vendors certain amounts of money, which could materially
    adversely affect our business, financial condition, results of
    operations and cash flows and which may cause us to be unable to
    meet certain financial covenants related to our senior
    indebtedness.
   27




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Elimination
    or relaxation of regulatory rights and protections could harm
    our business, results of operations and financial
    condition.
  New York-Northern
    Regulation.
  The
    communications market in which we operate is highly competitive,
    and we may not be able to compete effectively against companies
    that have significantly greater resources than we do, which
    could cause us to lose customers and impede our ability to
    attract new customers.
   28




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
    long-standing relationships and strong reputation with customers;
    financial, technical, marketing, personnel and other resources
    substantially greater than ours;
    more funds to deploy communications services and systems that
    compete with ours;
    the potential to subsidize competitive services with revenue
    from a variety of businesses;
    anticipated increased pricing flexibility and relaxed regulatory
    oversight;
    larger networks; and
    benefits from existing regulations that favor the incumbent
    local exchange carriers.    IP-based
    To
    service our indebtedness, including the notes, we will require a
    significant amount of cash. The ability to generate cash depends
    on many factors beyond our control.
     29




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System
    disruptions or the failure of our information systems to perform
    as expected could result in increased capital expenditures,
    customer and vendor dissatisfaction, loss of business or the
    inability to add new customers or additional
    services.
      Our
    ability to provide our services and systems at competitive
    prices is dependent on our ability to negotiate and enforce
    favorable interconnection and other agreements.
       30




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If the
    incumbent local exchange carriers with which we have
    interconnection agreements engage in anticompetitive practices
    or we experience difficulties in working with the incumbent
    local exchange carriers, our ability to offer services on a
    timely and cost-effective basis will be materially and adversely
    affected.
    We are
    subject to substantial government regulation that may restrict
    our ability to provide local services and may increase the costs
    we incur to provide these services.
     31




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and/or
    Regulation.
  Difficulties
    we may experience with incumbent local exchange carriers,
    interexchange carriers, and wholesale customers over payment
    issues may harm our financial performance.
         32




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Continued
    industry consolidation could further strengthen our competitors,
    and could adversely affect our prospects.
    Providers
    of VoIP service have been the target of recent intellectual
    property infringement litigation that may materially and
    adversely affect our ability and/or the ability of other
    providers to continue to sell or provide VoIP
    service.
  and/or
  The
    indenture governing the notes and the credit agreement governing
    our credit facility contain restrictive and operating covenants
    that limit our operating flexibility, and we may obtain a credit
    facility in the future that may include similar or additional
    restrictions.
    
    incur or guarantee additional indebtedness or issue preferred
    stock;
    pay dividends or distributions on, or redeem or repurchase,
    capital stock;
    create liens with respect to our assets;
    make investments, loans or advances;
    prepay subordinated indebtedness; 33




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
    enter into transactions with affiliates;
    merge, consolidate or sell our assets; and
    engage in any business other than activities related or
    complementary to communications.    The
    communications industry faces significant regulatory
    uncertainties and the adverse resolution of these uncertainties
    could harm our business, results of operations and financial
    condition.
    Regulation.
  The
    effects of increased regulation of
    IP-based
    service providers are unknown.
  and/or and/or and/or
 34




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Declining
    prices for communications services could reduce our revenues and
    profitability.
    Certain
    real estate leases and agreements are important to our business
    and failure to maintain such leases and agreements could
    adversely affect us.
      We
    depend on a limited number of third party service providers for
    long distance and other services, and if any of these providers
    were to experience significant interruptions in its business
    operations, or were to otherwise cease to provide such services
    to us, our ability to provide services to our customers could be
    materially and adversely affected.
    The
    communications industry is undergoing rapid technological
    changes, and new technologies may be superior to the
    technologies we use. We may fail to anticipate and keep up with
    such changes.
   35




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Limits
    exist on our ability to seek indemnification for losses from
    individuals and entities from whom we have acquired assets and
    operations.
    We are
    exposed to risks associated with disruption and instability in
    the financial markets.
    The
    financial difficulties faced by others in our industry could
    adversely affect our public image and our financial
    results.
    If we
    are unable to retain and attract management and key personnel,
    we may not be able to execute our business plan.
      Our
    success depends on the ability to manage and expand operations
    effectively.
    
    offer high-quality, reliable services at reasonable costs;
    introduce new technologies;
    install and operate telecommunications switches and related
    equipment; 36




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
    lease access to suitable transmission facilities at competitive
    prices;
    scale operations;
    obtain successful outcomes in disputes and in litigation,
    rule-making, legislation and regulatory proceedings;
    successfully negotiate, adopt or arbitrate interconnection
    agreements with other carriers;
    acquire necessary equipment, software and facilities;
    integrate existing and newly acquired technology and facilities,
    such as switches and related equipment;
    evaluate markets;
    add products;
    monitor operations;
    control costs;
    maintain effective quality controls;
    hire, train and retain qualified personnel;
    enhance operating and accounting systems;
    address operating challenges;
    adapt to market and regulatory developments; and
    obtain and maintain required governmental authorizations.      We may
    engage in future acquisitions that are not successful or fail to
    integrate acquired businesses into our operations, which may
    adversely affect our competitive position and growth
    prospects.
      
    integrating that businesss personnel, services, products
    or technologies into our operations;
    retaining key personnel of the acquired business;
    failing to adequately identify or assess liabilities of that
    business;
    failing to achieve the forecasts we used to determine the
    purchase price of that business; and
    diverting our managements attention from the normal daily
    operation of our business. 37




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Misappropriation
    of our intellectual property and proprietary rights could impair
    our competitive position, and defending against intellectual
    property infringement and misappropriation claims could be time
    consuming and expensive and, if we are not successful, could
    cause substantial expenses and disrupt our
    business.
      As an
    Internet access provider, we may incur liability for information
    disseminated through our network.
    MCG,
    Baker, NEA and other significant investors control us, and their
    interests as equity holders may conflict with interests of
    noteholders.
   38




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    ApproximateLocation

Lease Expiration


Square FootageOffices:King of Prussia, PA


January 2011



102,085Rye Brook, NY


May 2016



57,293Newark, NJ


April 2011



24,819New York, NY


June 2009



24,375New York, NY


April 2015



21,111Long Island City, NY


September 2012



20,000Quincy, MA


September 2013



14,637Melville, NY


March 2011



13,152Switches:New York, NY


May 2012



38,500Philadelphia, PA


July 2023



16,617Long Island City, NY


July 2009



21,112Charlestown, MA


April 2010



12,490Philadelphia, PA


April 2009



21,000Horsham, PA


November 2010



9,244Syracuse, NY


October 2014



8,000Philadelphia, PA


January 2013



5,928Herndon, VA


June 2010



5,000   Item 3.
    Legal
    Proceedings       39




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Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities      Holders ofClass of Equity Security

RecordCommon stock A


207Common stock B


36Series A Preferred stock


1Series A-1
    Preferred stock


1Series B Preferred stock


133Series B-1
    Preferred stock


90Series C Preferred stock


36     Item 6.
    Selected
    Consolidated Financial Data   40




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1 2
    Predecessor


SuccessorTen MonthsTwo Months


EndedEnded February 29,


December 31,


Years Ended December 31,2004


2004


2005


2006


2007


2008Statements of operations data:Revenues

$
13,631


$
72,826


$
240,396


$
272,653


$
451,159


$
500,736Operating expenses:Cost of revenues(1)


7,081



36,105



115,214



130,841



234,166



257,883Selling, general and administrative(2)


5,363



30,523



94,138



105,986



166,322



170,596Software development










2,301



1,819



2,293



1,639Depreciation and amortization


284



8,554



45,756



49,781



75,980



73,608Impairment charges


















4,000



Merger integration costs


10



2,834



4,531



1,430



500



Total operating expenses


12,738



78,016



261,940



289,857



483,261



503,726Income (loss) from operations


893



(5,190
)


(21,544
)


(17,204
)


(32,102
)


(2,990
)Other income (expense)


(1,001
)


(4,523
)






21



240



(8
)Interest expense


(704
)


(3,399
)


(17,842
)


(25,463
)


(34,390
)


(39,514
)Interest income


29



31



458



1,395



1,489



702Loss before provision for income taxes


(783
)


(13,081
)


(38,928
)


(41,251
)


(64,763
)


(41,810
)Provision for income taxes


(2
)


(3,802
)






(262
)


(726
)


(1,056
)Net loss


(785
)


(16,883
)


(38,928
)


(41,513
)


(65,489
)


(42,866
)Dividends on preferred stock










(22,002
)


(32,996
)


(55,031
)


(63,890
)Modification of preferred stock


















(95,622
)


Loss available to common shareholders

$
(785
)

$
(16,883
)

$
(60,930
)

$
(74,509
)

$
(216,142
)

$
(106,756
)Loss available per common share  basic and diluted





$
(7.74
)

$
(9.54
)

$
(10.07
)

$
(23.09
)

$
(11.03
)Weighted average common shares outstanding  basic and
    diluted






2,181,437



6,385,863



7,396,610



9,359,132



9,675,916 41




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Predecessor


SuccessorTen MonthsTwo Months


EndedEnded February 29,


December 31,


Years Ended December 31,2004


2004


2005


2006


2007


2008Statement of cash flow data:Cash flows provided by (used in):Operating activities

$
(652
)

$
(1,735
)

$
8,151


$
13,296


$
(2,671
)

$
27,239Investing activities


(1,038
)


(40,336
)


(20,731
)


(115,568
)


(88,824
)


(68,708
)Financing activities


784



36,654



25,407



129,471



89,541



23,541   SuccessorAs of December 31,2004


2005


2006


2007


2008Balance Sheet data:Cash and cash equivalents

$
3,926


$
16,753


$
43,952


$
41,998


$
24,070Investment securities


















23,533Property and equipment, net


9,086



39,547



61,395



77,373



85,248Goodwill


8,379



27,964



69,632



96,154



98,111Total assets


67,366



197,113



318,325



381,798



359,028Total debt, including current portion


23,875



147,204



217,769



313,990



336,778Total stockholders equity (deficiency)


19,707



(12,572
)


20,470



(22,715
)


(65,266
)     (1)
    
    Exclusive of depreciation and amortization.(2)
    
    Includes share-based compensation of $308, $673, $754, $2,552
    and $293 for the ten months ended December 31, 2004 and for
    the years ended December 31, 2005, 2006, 2007 and 2008
    respectively. 42




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion and analysis of our financial
    condition and results of operations should be read in
    conjunction with the Selected Consolidated Financial
    Data and the Consolidated Financial Statements and Notes
    to Consolidated Financial Statements included elsewhere in this
    report. Certain information contained in the discussion and
    analysis set forth below and elsewhere in this report, including
    information with respect to our plans and strategies for our
    business and related financing, includes forward-looking
    statements that involve risk and uncertainties. In evaluating
    such statements, prospective investors should specifically
    consider the various factors identified in this report that
    could cause results to differ materially from those expressed in
    such forward-looking statements, including matters set forth in
    the section entitled Risk Factors. Many of the
    amounts and percentages presented in this discussion and
    analysis have been rounded for convenience of presentation, and
    all amounts are presented in thousands.
  Overview
           43




---



##### Table of Contents



off-net,
  on-net IP-based
 44




---



##### Table of Contents



IP-based on-net.
  on-net
  Results
    of Operations
    Years Ended December 31,2006


2007


2008Revenues:Voice and data services


87.3
%


87.7
%


86.6
%Wholesale


4.7
%


2.8
%


3.8
%Access


5.5
%


5.6
%


5.7
%Total network services


97.5
%


96.1
%


96.1
%Other


2.5
%


3.9
%


3.9
%Total revenues


100.0
%


100.0
%


100.0
%Operating expenses:Network services


46.1
%


49.6
%


49.0
%Other cost of revenues


1.9
%


2.3
%


2.5
%Selling, general and administrative


38.8
%


36.9
%


34.1
%Software development


0.7
%


0.5
%


0.3
%Depreciation and amortization


18.3
%


16.8
%


14.7
%Impairment charges


0.0
%


0.9
%


0.0
%Merger integration costs


0.5
%


0.1
%


0.0
%Total operating expenses


106.3
%


107.1
%


100.6
%Loss from operations


(6.3
)%


(7.1
)%


(0.6
)%Other income


0.0
%


0.1
%


0.0
%Interest expense


(9.3
)%


(7.6
)%


(7.9
)%Interest income


0.5
%


0.3
%


0.1
%Loss before provision for income taxes


(15.1
)%


(14.3
)%


(8.4
)%Provision for income taxes


(0.1
)%


(0.2
)%


(0.2
)%Net loss


(15.2
)%


(14.5
)%


(8.6
)%   Key
    Components of Results of Operations
  Revenues
   45




---



##### Table of Contents



Cost
    of Revenues (exclusive of depreciation and
    amortization)
    
    leasing local loops and digital T-1 lines which connect our
    customers to our network;
    leasing high capacity digital lines that connect our switching
    equipment to our collocations;
    leasing high capacity digital lines that interconnect our
    network with the incumbent local exchange carriers;
    leasing space, power and terminal connections in the incumbent
    local exchange carrier central offices for collocating our
    equipment;
    signaling system network connectivity; and
    Internet transit and peering, which is the cost of delivering
    Internet traffic from our customers to the public Internet.    off-net
  and/or
 46




---



##### Table of Contents



Gross
    Profit (exclusive of depreciation and
    amortization)
      Years Ended December 31,2006


2007


2008Net loss

$
(41,513
)

$
(65,489
)

$
(42,866
)Add back
    non-gross
    profit items included in net loss:Provision for income taxes


262



726



1,056Interest and other expenses


24,047



32,661



38,820Impairment charges






4,000



Merger integration costs


1,430



500



Depreciation and amortization


49,781



75,980



73,608Software development


1,819



2,293



1,639Selling, general and administrative


105,986



166,322



170,596Gross profit

$
141,812


$
216,993


$
242,853           
    gross profit does not reflect our capital expenditures, future
    requirements for capital expenditures or contractual commitments
    to purchase capital equipment;
    gross profit does not reflect the interest expense, or the cash
    requirements necessary to service interest or principal
    payments, associated with our indebtedness;
    although depreciation and amortization are non-cash charges, the
    assets being depreciated and amortized will likely have to be
    replaced in the future, and gross profit does not reflect any
    cash requirements for such replacements; and
    gross profit does not reflect the SG&A expenses necessary
    to run our ongoing operations. 47




---



##### Table of Contents



Selling,
    General and Administrative
        Depreciation
    and Amortization
    Year
    Ended December 31, 2007 Compared to the Year Ended
    December 31, 2008
   48




---



##### Table of Contents



Years Ended December 31,2007


2008% of Total





% of TotalAmount


Revenues


Amount


Revenues


% ChangeRevenues:Network services

$
433,698



96.1
%

$
481,390



96.1
%


11.0
%Other


17,461



3.9
%


19,346



3.9
%


10.8
%Total revenues

$
451,159



100.0
%

$
500,736



100.0
%


11.0
%Cost of revenues:Network services

$
223,677



49.6
%

$
245,356



49.0
%


9.7
%Other


10,489



2.3
%


12,527



2.5
%


19.4
%Total cost of revenues

$
234,166



51.9
%

$
257,883



51.5
%


10.1
%Gross profit:Network services

$
210,021



46.5
%

$
236,034



47.1
%


12.4
%Other


6,972



1.6
%


6,819



1.4
%


(2.2
)%Total gross profit

$
216,993



48.1
%

$
242,853



48.5
%


11.9
%   Revenues
    Years Ended December 31,2007


2008% of Total





% of TotalAmount


Revenues


Amount


Revenues


% ChangeRevenues:Voice and data services

$
395,653



87.7
%

$
433,568



86.6
%


9.6
%Wholesale


12,693



2.8
%


19,096



3.8
%


50.4
%Access


25,352



5.6
%


28,726



5.7
%


13.3
%Total network services


433,698



96.1
%


481,390



96.1
%


11.0
%Other


17,461



3.9
%


19,346



3.9
%


10.8
%Total revenues

$
451,159



100.0
%

$
500,736



100.0
%


11.0
%    49




---



##### Table of Contents



Cost
    of Revenues (exclusive of depreciation and
    amortization)
    Gross
    Profit (exclusive of depreciation and
    amortization)
  on-net. on-net
  Selling,
    General and Administrative
      Depreciation
    and Amortization
   50




---



##### Table of Contents



Interest
    Years Ended December 31,2007


2008Interest expense

$
34,390


$
39,514Weighted average debt outstanding

$
276,563


$
315,988Effective interest rate


12.43
%


12.50
%   Net
    Loss
    Year
    Ended December 31, 2006 Compared to the Year Ended
    December 31, 2007
      Years Ended December 31,2006


2007% of Total





% of TotalAmount


Revenues


Amount


Revenues


% ChangeRevenues:Network services

$
265,934



97.5
%

$
433,698



96.1
%


63.1
%Other


6,719



2.5
%


17,461



3.9
%


159.9
%Total revenues

$
272,653



100.0
%

$
451,159



100.0
%


65.5
%Cost of revenues:Network services

$
125,741



46.1
%

$
223,677



49.6
%


77.9
%Other


5,100



1.9
%


10,489



2.3
%


105.7
%Total cost of revenues

$
130,841



48.0
%

$
234,166



51.9
%


79.0
%Gross profit:Network services

$
140,193



51.4
%

$
210,021



46.6
%


49.8
%Other


1,619



0.6
%


6,972



1.5
%


330.7
%Total gross profit

$
141,812



52.0
%

$
216,993



48.1
%


53.0
%  51




---



##### Table of Contents



Revenues
    Years Ended December 31,2006


2007% of Total





% of TotalAmount


Revenues


Amount


Revenues


% ChangeRevenues:Voice and data services

$
238,005



87.3
%

$
395,653



87.7
%


66.2
%Wholesale


12,901



4.7
%


12,693



2.8
%


(1.6
)%Access


15,028



5.5
%


25,352



5.6
%


68.7
%Total network services


265,934



97.5
%


433,698



96.1
%


63.1
%Other


6,719



2.5
%


17,461



3.9
%


159.9
%Total revenues

$
272,653



100.0
%

$
451,159



100.0
%


65.5
%     Cost
    of Revenues (exclusive of depreciation and
    amortization)
      off-net
  Gross
    Profit (exclusive of depreciation and
    amortization)
  on-net.
 52




---



##### Table of Contents



on-net
  Selling,
    General and Administrative
      Depreciation
    and Amortization
    Impairment
    Charges
    Interest
   53




---



##### Table of Contents



Years Ended December 31,2006


2007Interest expense, excluding conversion fee and financing cost
    write-off

$
22,738


$
34,390Weighted average debt outstanding

$
181,938


$
276,563Effective interest rate


12.50
%


12.43
%     Net
    Loss
    Off-Balance
    Sheet Arrangements
    Liquidity
    and Capital Resources
      Disputes
   54




---



##### Table of Contents



Credit
    Facility
           55




---



##### Table of Contents



2006
    Note and 2007 Note Offerings
  3 8
  3 8 3 8
  3 8
  Year
    Ended December 31, 2007 Compared to the Year Ended
    December 31, 2008
  Cash
    Flows from Operating Activities
    Cash
    Flows from Investing Activities
   56




---



##### Table of Contents



Cash
    Flows from Financing Activities
    Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2007
  Cash
    Flows from Operating Activities
    Cash
    Flows from Investing Activities
    Cash
    Flows from Financing Activities
    Contractual
    Obligations
    Less Than


1-3


3-5


More ThanTotal


1 Year


Years


Years


5 Years113/8% senior
    secured notes due 2012

$
300,000


$



$



$
300,000


$
Cash interest for notes


136,500



34,125



68,250



34,125



Credit facility


23,500







23,500







Capital lease obligations


9,354



4,142



4,888



324



Operating leases


44,552



11,296



16,911



7,510



8,835513,906



49,563



113,549



341,959



8,835Purchase commitment obligations:Communications commitment


74,608



26,224



48,384







Total contractual obligations

$
588,514


$
75,787


$
161,933


$
341,959


$
8,835  57




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##### Table of Contents



New
    Accounting Standards
    157-2 FSP 157-2 FSP 157-2
  Share-Based Payment
  Business Combinations (Revised) Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of ARB No. 51 Consolidated
    Financial Statements
  Disclosures about Derivative Instruments and Hedging
    Activities
  The Hierarchy of Generally Accepted Accounting
    Principles The Meaning of Present Fairly in
    Conformity With
 58




---



##### Table of Contents



Generally Accepted Accounting Principles.
  Application
    of Critical Accounting Policies and Estimates
      Revenue
    Recognition
    Accounts
    Receivable and Allowance for Doubtful Accounts
    Impairment
    of Long-Lived Assets
  Accounting for the
    Impairment or Disposal of Long-Lived Assets
 59




---



##### Table of Contents



Goodwill
    and Other Intangible Assets
  Goodwill and Other Intangible Assets
  Disputes
      Income
    Taxes
    Uncertainty
    in Income Taxes
  Accounting for Uncertainty
    in Income Taxes
   60




---



##### Table of Contents



Other
    Matters
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk          3 8
  long-term
 61




---



##### 



Item 8.
    Consolidated
    Financial Statements and Supplementary Data  Index to
    Consolidated Financial Statements
   
 Report of Independent Registered Public
    Accounting Firm


63Consolidated Balance Sheets at December 31,
    2007 and 2008


64Consolidated Statements of Operations for the
    years ended December 31, 2006, 2007 and 2008


65Consolidated Statements of Stockholders
    Equity (Deficiency) for the years ended December 31, 2006,
    2007 and 2008


66Consolidated Statements of Cash Flows for the
    years ended December 31, 2006, 2007 and 2008


67Notes to Consolidated Financial Statements


68Financial Statement Schedule


112   62




---



##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             Ernst &
    Young LLP
    63




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Consolidated
    Balance Sheets
  December 31,2007


2008(In thousands, exceptshare amounts)ASSETSCurrent assets:Cash and cash equivalents

$
41,998


$
24,070Investment securities






23,533Accounts receivable, less allowance for doubtful accounts of
    $10,082 and $11,934


56,426



53,486Other current assets


8,463



12,614Total current assets


106,887



113,703Property and equipment, net


77,373



85,248Goodwill


96,154



98,111Intangible assets, net of accumulated amortization of $109,335
    and $150,556


82,841



45,220Other assets


18,543



16,746Total assets

$
381,798


$
359,028LIABILITIES AND STOCKHOLDERS DEFICIENCYCurrent liabilities:Accounts payable

$
21,247


$
17,044Accrued expenses and other current liabilities


43,952



42,699Taxes payable


10,818



10,680Deferred revenues


10,148



11,967Current portion of capital lease obligations and equipment notes


3,136



4,142Total current liabilities


89,301



86,532Long-term debt


304,740



327,424Deferred rent payable


2,628



2,400Capital lease obligations and equipment notes, net of current
    portion


6,114



5,212Deferred income taxes payable


1,141



2,071Other


589



655Total liabilities


404,513



424,294Stockholders deficiency:Common stock A  $.01 par value; authorized
    80,000,000, issued and outstanding 9,342,880 shares


107



107Common stock B  $.01 par value; authorized
    10,000,000, issued and outstanding 360,050 shares


4



4Series A Preferred stock  $.01 par value;
    authorized 89,526 shares, designated, issued and
    outstanding 87,254 shares entitled in liquidation to
    $123,880 and $139,428


1



1Series A-1
    Preferred stock   $.01 par value; authorized
    105,000 shares, designated, issued and outstanding
    100,702 shares, entitled in liquidation to $142,973 and
    $160,917


1



1Series B Preferred stock  $.01 par value;
    authorized 93,180 shares, designated, issued and
    outstanding 91,202 shares entitled in liquidation to
    $129,485 and $145,737


1



1Series B-1
    Preferred stock  $.01 par value; authorized
    86,000 shares, designated, issued and outstanding
    64,986 shares entitled in liquidation to $92,265 and
    $103,845


1



1Series C Preferred stock  $.01 par value;
    authorized 52,332 shares, designated, issued and
    outstanding 14,402 shares entitled in liquidation to
    $13,011 and $15,577






Additional paid-in capital


140,270



140,563Accumulated deficit


(163,100
)


(205,966
)Accumulated other comprehensive income






22Total stockholders deficiency


(22,715
)


(65,266
)Total liabilities and stockholders deficiency

$
381,798


$
359,028    64




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Consolidated
    Statements of Operations
  Years Ended December 31,2006


2007


2008(In thousands, except share amounts)Revenues

$
272,653


$
451,159


$
500,736Operating expenses:Cost of revenues (exclusive of depreciation and amortization)


130,841



234,166



257,883Selling, general and administrative (includes share-based
    compensation of $754, $2,552 and $293)


105,986



166,322



170,596Software development


1,819



2,293



1,639Depreciation and amortization


49,781



75,980



73,608Impairment charges






4,000



Merger integration costs


1,430



500



Total operating expenses


289,857



483,261



503,726Loss from operations


(17,204
)


(32,102
)


(2,990
)Other income (expenses)


21



240



(8
)Interest expense


(25,463
)


(34,390
)


(39,514
)Interest income


1,395



1,489



702Loss before provision for income taxes


(41,251
)


(64,763
)


(41,810
)Provision for income taxes


(262
)


(726
)


(1,056
)Net loss


(41,513
)


(65,489
)


(42,866
)Dividends on preferred stock


(32,996
)


(55,031
)


(63,890
)Modification of preferred stock






(95,622
)


Loss available to common shareholders

$
(74,509
)

$
(216,142
)

$
(106,756
)Loss available per common share  basic and diluted

$
(10.07
)

$
(23.09
)

$
(11.03
)Weighted average common shares outstanding  basic and
    diluted


7,396,610



9,359,132



9,675,916    65




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Consolidated
    Statements of Stockholders Equity
    (Deficiency)
  Years Ended December 31,2006


2007


2008Shares


Amount


Shares


Amount


Shares


Amount(In thousands, except share amounts)Series A common stockBalance at beginning of year


6,605,872


$
66



8,871,427


$
102



9,342,880


$
107Cancellation of shares


(1,307,770
)






(97,435
)


(1
)






Shares issued in InfoHighway acquisition










568,888



6







Issuance of shares pursuant to conversion of senior unsecured
    subordinated notes


3,573,325



36















Balance at end of year


8,871,427



102



9,342,880



107



9,342,880



107Series B common stockBalance at beginning of year


















360,050



4Issuance of shares pursuant to management incentive plan










360,050



4







Balance at end of year










360,050



4



360,050



4Series A Preferred stockBalance at beginning of year


89,521



1



89,521



1



87,254



1Cancellation of shares pursuant to management incentive plan










(2,267
)










Balance at end of year


89,521



1



87,254



1



87,254



1Series A-1 Preferred StockBalance at beginning of year










100,702



1



100,702



1Issuance of shares pursuant to conversion of senior unsecured
    subordinated notes


100,702



1















Balance at end of year


100,702



1



100,702



1



100,702



1Series B Preferred StockBalance at beginning of year


92,832



1



92,832



1



91,202



1Cancellation of shares










(1,630
)










Balance at end of year


92,832



1



91,202



1



91,202



1Series B-1 Preferred StockBalance at beginning of year










42,231







64,986



1Shares issued in InfoHighway acquisition










22,755



1







Issuance of shares pursuant to conversion of senior unsecured
    subordinated notes


42,231



















Balance at end of year


42,231







64,986



1



64,986



1Series C Preferred StockBalance at beginning of year


















14,402



Issuance of shares pursant to management incentive plan










14,402











Balance at end of year










14,402







14,402



Additional paid-in capitalBalance at beginning of year






44,254







117,689







140,270Stock based compensation














2,388







293Repurchase of shares














(1,538
)






Shares issued in InfoHighway acquisition














17,446







Warrants issued in InfoHighway acquisition














4,285







Deferred compensation






754















Adoption of SFAS No. 123R






(1,083
)














Issuance of shares pursuant to conversion of senior unsecured
    subordinated notes






73,764















Balance at end of year






117,689







140,270







140,563Accumulated deficitBalance at beginning of year






(55,811
)






(97,324
)






(163,100
)Adoption of FIN 48














(287
)






Net loss






(41,513
)






(65,489
)






(42,866
)Balance at end of year






(97,324
)






(163,100
)






(205,966
)Accumulated other comprehensive incomeBalance at beginning of year






















Unrealized gain on investment securities






















22Balance at end of year






















22Deferred compensationBalance at beginning of year






(1,083
)














Adoption of SFAS No. 123R






1,083















Balance at end of year






















Total stockholders equity (deficiency)





$
20,470






$
(22,715
)





$
(65,266
)    66




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Consolidated
    Statements of Cash Flows
  Years Ended December 31,2006


2007


2008(In thousands)Cash flows from operating activitiesNet loss

$
(41,513
)

$
(65,489
)

$
(42,866
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation


19,302



31,907



32,322Amortization and write-off of deferred financing costs


2,383



2,437



2,639Amortization of intangible assets


30,479



44,206



41,221Amortization of bond premium






(435
)


(816
)Provision for doubtful accounts


4,115



6,546



5,539Noncash subordinated debt interest


4,920







Stock-based compensation


754



2,552



293Deferred income taxes






1,141



930Impairment






4,000



Other


(3
)


251



55Changes in operating assets and liabilities:Restricted cash


(460
)


460



Accounts receivable


(1,492
)


(12,357
)


(1,887
)Prepaid expenses and other current assets


(1,328
)


725



(4,133
)Other assets


(208
)


(2,186
)


(767
)Accounts payable


(15,598
)


1,400



(4,203
)Accrued expenses and other current liabilities


11,349



(19,680
)


(2,293
)Deferred revenue


260



1,970



1,433Deferred rent


336



(119
)


(228
)Net cash provided by (used in) operating activities


13,296



(2,671
)


27,239Cash flows from investing activitiesAcquisition, net of cash and restricted cash acquired


(88,787
)


(56,638
)


(4,953
)Purchase of investment securities










(23,500
)Purchase of property and equipment


(23,146
)


(30,418
)


(39,786
)Merger acquisition costs


(3,635
)


(1,768
)


(311
)Other










(158
)Net cash used in investing activities


(115,568
)


(88,824
)


(68,708
)Cash flows from financing activitiesProceeds from capital lease financing and equipment notes


7,794



5,217



3,789Payments on capital lease obligations and equipment notes


(3,367
)


(3,760
)


(3,685
)Repayments of long-term debt


(84,000
)






Repayments of revolving credit facility






(12,005
)


(402
)Proceeds from issuance of subordinated debt


10,000







Repayment of subordinated debt


(972
)






Proceeds from issuance of long-term debt


210,000



95,175



Drawdowns on revolving credit facility






11,500



23,902Payment of subordinated debt conversion fees


(1,531
)






Payment of deferred financing fees


(8,453
)


(4,883
)


Payments for shares purchased under under MIP






(1,703
)


Other










(63
)Net cash provided by financing activities


129,471



89,541



23,541Net increase (decrease) in cash and cash equivalents


27,199



(1,954
)


(17,928
)Cash and cash equivalents at beginning of year


16,753



43,952



41,998Cash and cash equivalents at end of year

$
43,952


$
41,998


$
24,070Supplemental disclosure of cash flow informationCash paid during the year for interest

$
7,123


$
32,008


$
37,581Supplemental schedule of non-cash informationEquity securities issued in connection with acquisition

$



$
21,742


$
    67




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes
    to Consolidated Financial Statements
 (in
    thousands, except share information)
  1.
    Organization
    and Description of Business    2.
    Significant
    Accounting Policies  Basis
    of Presentation
    Revenue
    Recognition
        Costs
    of Revenue
    Cash
    and Cash Equivalents
    Investment
    Securities
   68




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Accounting for Certain
    Investments in Debt and Equity Securities Fair Value Measurements
  Accounts
    Receivable and Allowance for Doubtful Accounts
    Property
    and Equipment
    Impairment
    of Long-Lived Assets
    Goodwill
  Goodwill and Other Intangible Assets
 69




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Third
    Party Conversion Costs
    Debt
    Issuance Costs
    Significant
    Vendor
    Income
    Taxes
    Uncertainty
    in Income Taxes
  Accounting for Uncertainty in Income Taxes
 70




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Stock-Based
    Compensation
  Share-Based Payment
  Software
    Development Costs
  98-1, Accounting for the Cost of Computer Software Developed or
    Obtained for Internal Use (SOP 98-1). SOP 98-1
      Advertising
    Disputes
    Use of
    Estimates
    Comprehensive
    Loss
   71




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Years Ended December 31,2006


2007


2008Net loss

$
(41,513
)

$
(65,489
)

$
(42,866
)Unrealized gain on investment securities










22Comprehensive loss

$
(41,513
)

$
(65,489
)

$
(42,844
)   3.
    Recent
    Accounting Pronouncements  157-2 FSP 157-2 FSP 157-2
  Share-Based Payment
  Business Combinations (Revised) Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of ARB No. 51 Consolidated
    Financial Statements
  Disclosures about Derivative Instruments and Hedging
    Activities
 72




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    The Hierarchy of Generally Accepted Accounting
    Principles The Meaning of Present Fairly in
    Conformity With Generally Accepted Accounting
    Principles.
  4.
    Acquisitions
    and Merger Agreements  2008
    Acquisition
       73




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Assets acquired:Accounts receivable

$
712Other current assets


18Property and equipment


411Goodwill


2,185Customer-based intangibles


3,600Other assets


12Total assets acquired


6,938Liabilities assumed:Current liabilities


746Net assets acquired

$
6,192   2007
    Acquisition
    Series B-1 Series B-1
  Cash paid, net of cash acquired of $7,841

$
56,638Equity securities issued, including warrants


21,742Acquisition costs


1,504$
79,884   Series B-1 Series B-1 Series B-1 Series B-1
   74




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    No. 00-19, Accounting for Derivative Financial Instruments Indexed to,
    and Potentially Settled in, a Companys Own Stock
  95-3, Recognition of Liabilities in Connection with a Purchase
    Business Combination (EITF 95-3).
    Assets acquired, excluding cash:Accounts receivable

$
9,302Other current assets


880Property and equipment


17,435Goodwill


26,258Customer-based intangibles


46,800Other intangibles


4,400Other non-current assets


495Total assets acquired


105,570Liabilities assumed:Current liabilities


25,686Net assets acquired

$
79,884   2006
    Acquisition
   75




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    EITF 95-3.
    Assets acquired:Cash and cash equivalents

$
10,646Restricted cash


1,508Accounts receivable


19,441Other current assets


3,817Property and equipment


17,607Goodwill


38,033Customer-based intangibles


21,412Other intangibles


7,909Other non-current assets


1,811Total assets acquired


122,184Liabilities assumed:Current liabilities


20,732Other liabilities


511Total liabilities assumed


21,243Net assets acquired

$
100,941       Years Ended December 31,2006


2007Revenues

$
507,906


$
498,965Net loss

$
(60,720
)

$
(75,703
)Loss available per common share  basic and diluted

$
(9.70
)

$
(23.59
)    76




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    5.
    Other
    Assets    December 31,2007


2008Deferred carrier charges

$
2,563


$
4,956Prepaid expenses


3,903



2,449Other


1,997



5,209Total other current assets

$
8,463


$
12,614     December 31,2007


2008Deferred financing costs

$
12,094


$
9,518Lease security and carrier deposits


2,778



2,274Other


3,671



4,954Total other non-current assets

$
18,543


$
16,746       6.
    Property
    and Equipment    December 31,2007


2008Network equipment

$
107,286


$
142,954Computer and office equipment


19,196



20,512Capitalized software costs


10,607



13,371Furniture and fixtures and other


8,574



8,923Leasehold improvements


5,386



5,486151,049



191,246Less accumulated depreciation and amortization


(73,676
)


(105,998
)$
77,373


$
85,248  77




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
      7.
    Identifiable
    Intangible Assets and Goodwill    Customer Relationships:
    Trademark:
        December 31,2007


2008Gross








GrossCarrying


Accumulated


Net Carrying


Carrying


Accumulated


Net CarryingValue


Amortization


Value


Value


Amortization


ValueCustomer base

$
183,867


$
(107,168
)

$
76,699


$
187,467


$
(146,012
)

$
41,455Trademarks


7,400



(1,258
)


6,142



7,400



(3,635
)


3,765Other


909



(909
)






909



(909
)


$
192,176


$
(109,335
)

$
82,841


$
195,776


$
(150,556
)

$
45,220  78




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
      2009

$
17,7372010


12,4312011


5,3052012


3,48620013


2,194Thereafter


4,067$
45,220     Balance at December 31, 2006

$
69,632Effects of 2007 acquisition


26,258Other


264Balance at December 31, 2007


96,154Effects of 2008 acquisition


2,185Other


(228
)Balance at December 31, 2008

$
98,111   8.
    Accrued
    Expenses and Other Current Liabilities    December 31,2007


2008Recurring network costs and other operating accruals

$
23,488


$
23,796Accrued interest(a)


11,375



11,485Merger transaction costs(b)


2,090



633Payroll related liabilities


6,840



6,234Other


159



551Total accrued expenses and other current liabilities

$
43,952


$
42,699     (a)
    
    Represents accrued interest on the Senior Secured Notes.
    Interest is paid semi-annually on March 1 and September 1 of
    each year.(b)
    
    The accrual for merger transaction costs consists of the
    following:  LeaseSeverance


Terminations


Other


TotalBalance at December 31, 2007

$
1,388


$
632


$
70


$
2,090Additions


102











102Payments


(604
)


(499
)


(70
)


(1,173
)Adjustments


(386
)










(386
)Balance at December 31, 2008

$
500


$
133


$



$
633  79




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  9.
    Obligations
    Under Capital and Operating Leases  Capital
    Leases
      2009

$
5,6372010


4,0212011


1,8112012


34111,810Less amounts representing interest


(2,456
)9,354Less current portion


(4,142
)Capital lease obligations, net of current portion

$
5,212     Operating
    Leases
    2009

$
11,2962010


10,4562011


6,4552012


4,5422013


2,968Thereafter


8,835Total minimum lease payments

$
44,552     2009

$
5872010


4982011


109Total sublease rentals

$
1,194    80




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    10.
    Debt  Senior
    Secured Notes
  3 8 3 8 3 4
  3 8
      Revolving
    $25,000 Senior Credit Facility
   81




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
          Senior
    Credit Facility
    Senior
    Subordinated Debt
  series A-1
  11.
    Shareholders
    Equity (Deficiency)  Equity
  Series A-1 Series B-1 Series A-1 Series B-1
   82




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Series A-1
  Series A-1 Series A-1 Series A-1 Series A-1 Series A-1 Series A-1
  Series B-1
  Series B-1 Series B-1 Series B-1 Series B-1 Series B-1 Series B-1
   83




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  winds-up; wind-up;
              12.
    Stock
    Based Compensation  Restricted
    Stock Awards
  40/30/30
 84




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Accounting for
    Certain Transactions Involving Stock Compensation
      Weighted-AverageSeries A and B


Series C


Series A and B


Grant Date FairPreferred


Preferred


Common


ValueOutstanding December 31, 2005


2,650







66,250


$
502.43Grants














Forfeit/Cancel/Repurchase














Outstanding December 31, 2006


2,650







66,250



502.43Grants






14,402



360,050



137.50Forfeit/Cancel/Repurchase


(2,650
)






(66,250
)


502.43Outstanding December 31, 2007






14,402



360,050



137.50Grants














Forfeit/Cancel/Repurchase














Outstanding December 31, 2008






14,402



360,050


$
137.50     Stock
    Options
   85




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Series C


AveragePreferred


Exercise PriceOutstanding December 31, 2005





$
Grants






Forfeit/Cancel/Repurchase






Outstanding December 31, 2006






Grants


21,599



137.50Forfeit/Cancel/Repurchase


(699
)


137.50Outstanding December 31, 2007


20,900



137.50Grants






Forfeit/Cancel/Repurchase


(696
)


137.50Outstanding December 31, 2008


20,204


$
137.50     13.
    Income
    Taxes    Years Ended December 31,2006


2007


2008Current:Federal

$



$
(293
)

$
(25
)State


262



164



151Deferred






855



930$
262


$
726


$
1,056     Years Ended December 31,2006


2007


2008Statutory federal income tax rate


34.0
%


35.0
%


35.0
%State and local income tax, net of federal tax benefits


0.4
%


0.2
%


0.4
%Permanent items


0.0
%


0.3
%


3.3
%Valuation allowance


(34.4
)%


(35.5
)%


(38.3
)%Effective income tax rate


0.0
%


0.0
%


0.4
%  86




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    December 31,2007


2008Deferred tax assets:CurrentAccounts receivable

$
3,856


$
4,565Deferred revenue


3,882



4,577Other


2,153



789Total deferred tax assets-current


9,891



9,931NoncurrentNet operating loss carry forwards


49,342



52,157Customer lists


3,625



5,008Trademark


1,403



1,607Other


2,218



990Total deferred tax assets-noncurrent


56,588



59,762Total deferred tax assets

$
66,479


$
69,693Deferred tax liabilities:NoncurrentCustomer Lists


23,713



11,098Trademark


1,297



670Goodwill


1,141



2,071Accelerated Depreciation


13,389



13,282Total deferred tax liabilities-noncurrent


39,540



27,121Net deferred tax assets  current:Deferred tax assets-current

$
9,891


$
9,931Valuation allowance


(9,891
)


(9,931
)Net current deferred tax assets

$



$
Net deferred tax liabilities  noncurrent:Deferred tax assets-noncurrent

$
56,588


$
59,762Deferred tax liabilities-noncurrent


(39,540
)


(27,121
)Valuation allowance


(18,189
)


(34,712
)Net noncurrent deferred tax liabilities

$
(1,141
)

$
(2,071
)    87




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Accounting for Uncertainty in Income Taxes
  14.
    Employee
    Savings and Retirement Plan    15.
    Fair
    Values of Financial Instruments      3 8
 88




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  16.
    Commitments
    and Contingencies              2009

$
26,2242010


24,9352011


23,449Total future obligations

$
74,608    89




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  17.
    Earnings
    per share    Years Ended December 31,2006


2007


2008Loss available to common shareholders (Numerator):Net loss

$
(41,513
)

$
(65,489
)

$
(42,866
)Dividends on preferred stock


(32,996
)


(55,031
)


(63,890
)Modification of preferred stock






(95,622
)


Loss available to common shareholders

$
(74,509
)

$
(216,142
)

$
(106,756
)Shares (Denominator):Weighted average common shares outstanding:Class A common stock


7,396,610



9,131,327



9,342,880Class B common stock






227,805



333,036Weighted average common shares outstanding  basic and
    diluted


7,396,610



9,359,132



9,675,916Loss available per common share  basic and diluted

$
(10.07
)

$
(23.09
)

$
(11.03
)     Earnings
    Per Share
  A-1, A-1, A-1,
   90




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  18.
    Unaudited
    Quarterly Results of Operations    2008Three Months EndedMarch 31,


June 30,


September 30


December 31,Revenues

$
123,543


$
128,313


$
125,535


$
123,345Cost of revenues (exclusive of depreciation and amortization)

$
66,021


$
65,427


$
65,026


$
61,409Income (loss) from operations

$
(3,981
)

$
1,196


$
800


$
(1,005
)Net loss

$
(13,581
)

$
(9,030
)

$
(9,173
)

$
(11,082
)Dividends on preferred stock


(15,352
)


(15,730
)


(16,202
)


(16,688
)Loss available to common shareholders

$
(28,933
)

$
(24,760
)

$
(25,375
)

$
(27,770
)Loss available per common share  basic and diluted(1)

$
(2.99
)

$
(2.56
)

$
(2.62
)

$
(2.87
)Weighted average common shares outstanding  basic and
    diluted


9,667,680



9,676,996



9,679,455



9,679,455   2007Three Months EndedMarch 31,


June 30,(2)


September 30


December 31,(3)Revenues

$
95,821


$
106,524


$
123,652


$
125,162Cost of revenues (exclusive of depreciation and amortization)

$
49,547


$
53,699


$
64,890


$
66,030Loss from operations

$
(8,055
)

$
(6,655
)

$
(6,115
)

$
(11,277
)Net loss

$
(15,252
)

$
(15,354
)

$
(14,990
)

$
(19,892
)Dividends on preferred stock


(12,309
)


(13,346
)


(14,471
)


(14,905
)Modification of preferred stock


(95,622
)










Loss available to common shareholders

$
(123,183
)

$
(28,700
)

$
(29,461
)

$
(34,797
)Loss available per common share  basic and diluted(1)

$
(13.92
)

$
(3.11
)

$
(3.05
)

$
(3.60
)Weighted average common shares outstanding  basic and
    diluted


8,848,454



9,240,321



9,667,680



9,667,680     (1)
    
    The sum of quarterly per share amounts may not equal per share
    amounts reported for year-to-date periods. This is due to
    changes in the number of weighted-average shares outstanding and
    the effects of rounding for each period.(2)
    
    The Company acquired InfoHighway on May 31, 2007.
    Accordingly, the Companys results of operations include
    the operations of InfoHighway from June 1, 2007.(3)
    
    We recognized an impairment charge due to the rebranding of ATX. 91




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures    Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rule 15d-15(b), Rules 13a-15(f) 15d-15(f),
            Internal
    Control  Integrated Framework
 92




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##### Table of Contents



Rules 13a-15(f) 15d-15(f))
    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance        Name

PositionMichael K. Robinson

Chief Executive Officer, President and DirectorBrian P. Crotty

Chief Operating OfficerCorey Rinker

Chief Financial Officer, Treasurer and Assistant SecretaryCharles C. Hunter

Executive Vice President, General Counsel and SecretaryKenneth A. Shulman

Chief Technology Officer and Chief Information OfficerTerrence J. Anderson

Executive Vice President  Corporate Development and
    Assistant TreasurerSteven F. Tunney

Chairman of the BoardRichard W. Roedel

Director and Chairman of the Audit CommitteeSamuel G. Rubenstein

DirectorJohn S. Patton, Jr.

DirectorB. Hagen Saville

DirectorDavid C. Ruberg

DirectorRobert Manning

DirectorPeter J. Barris

DirectorRaul Martynek

Director    93




---



##### Table of Contents



Biographies
    of Executive Officers
  Michael K. Robinson, Chief Executive Office, President and
    Director (52).
  Brian P. Crotty, Chief Operating Officer
    (38).
  Corey Rinker, Chief Financial Officer, Treasurer and
    Assistant Secretary (50).
  Charles C. Hunter, Executive Vice President, General Counsel
    and Secretary (56). 25-year
  Kenneth A. Shulman, Chief Technology Officer and Chief
    Information Officer (55).
 94




---



##### Table of Contents



Terrence J. Anderson, Executive Vice President 
    Corporate Development and Assistant Treasurer
    (42).
  Biographies
    of Directors
  Steven F. Tunney, Sr.
    (48).
  Richard W. Roedel (59).
  Samuel G. Rubenstein (47).
 95




---



##### Table of Contents



B. Hagen Saville (47).
  John S. Patton, Jr. (50).
  Peter J. Barris (55).
  David C. Ruberg (62).
 96




---



##### Table of Contents



Robert Manning (49).
  Raul Martynek (43). non-facilities SUNY-Binghamton
  Code of
    Business Conduct and Ethics
  www.broadviewnet.com www.broadviewnet.com Form 8-K
  Board of
    Directors and Committees of the Board of Directors
       97




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##### Table of Contents



www.broadviewnet.com
  Compensation
    Committee Interlocks and Insider Participation
      Indemnification
    Compensation
    Committee Report
  Form 10-K.
              98




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##### Table of Contents



Item 11.
    Executive
    Compensation  COMPENSATION
    DISCUSSION & ANALYSIS
    Determination
    of Compensation
        
    Akamai Technologies Inc.
    CBeyond Inc.
    Covad Communications Group Inc.
    Equinix Inc.
    InfoSpace Inc.
    Leap Wireless International Inc.
    Limelight Networks Inc.
    McLeod USA Inc.
    MetroPCS Communications Inc. 99




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##### Table of Contents




    Ntelos Holdings Corp.
    Paetec Holding Corp.
    Radiant Systems Inc.
    Savvis, Inc.
    Time Warner Telecom
    XO Holdings    Components
    of Compensation
      Base
    Salary
    Annual
    Bonuses
  Form 8-K company-wide
 100




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##### Table of Contents



401(k)
    Savings Plan
    Perquisites
    and Other Benefits
    Severance
    Benefits
   101




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##### Table of Contents



SUMMARY
    COMPENSATION TABLE
  
  Stock


OptionBonus


Awards


Awards


All OtherName and Principal Position

Year


Salary


(1)


(2)


(3)


Compensation


TotalMichael K. Robinson


2008


$
436,264


$



$
31,402


$
101,627


$
120,446(4
)

$
689,739President and Chief


2007



400,000



400,000



598,923



97,420



91,955



1,588,298Executive Officer


2006



400,000



300,000



219,813







96,400



1,016,213Corey Rinker


2008



268,242







12,284



14,528







295,054Executive Vice President, Chief


2007



260,000



90,000



225,889



9,685



80,898



666,472Financial Officer, Treasurer and


2006



260,000



75,000



129,703











464,703Assistant SecretaryBrian P. Crotty


2008



328,736







28,354



40,337







397,427Chief Operating Officer


2007



310,000



205,000



480,089



26,891



77,417



1,099,3972006



310,000



190,000



175,550











675,550Charles C. Hunter


2008



265,000







11,129



14,528







290,657Executive Vice President,


2007



250,000



100,000



198,164



9,685







557,849General Counsel and Secretary


2006



250,000



75,000



83,954











408,954Terrence J. Anderson


2008



265,000







15,362



31,459







311,821Executive Vice President, Finance


2007



250,000



165,000



205,963



20,972







641,935and Corporate Development


2006



250,000



150,000















400,000Ken A. Shulman


2008



265,000







11,814



24,195







301,009Executive Vice President, Chief


2007



250,000



125,000



161,012



16,130







552,142Technology Officer and Chief


2006



250,000



100,000















350,000Information Officer     (1)
    
    In 2009, the ad hoc compensation committee of the board of
    directors approved a $1.5 million discretionary bonus pool that
    will be allocated among our named executive officers and other
    employees. This pool was established to reward these individuals
    for their efforts in connection with continued progress with
    respect to completion of the InfoHighway integration and
    improvement of various operating metrics. As of the date of this
    report, the portion of the pool that will be allocated to each
    of our named executive officers as their 2008 annual bonuses has
    not been determined. We expect such amounts to be determined in
    the second quarter of 2009 and will file a
    Form 8-K
    promptly after this information is determined.(2)
    
    Represents the gross compensation cost we recognized for
    financial statement reporting purposes with respect to the
    applicable fiscal year in accordance with Statement of Financial
    Accounting Standards No. 123(R), Share-Based Payment, or
    SFAS 123(R). For additional information on the calculation
    of the net compensation expense including the valuation
    assumptions used, please refer to note 12 of our audited
    consolidated financial statements. We did not grant any new
    stock awards during 2008. The compensation expense reflected is
    for stock awards granted in previous years.(3)
    
    Represents the gross compensation cost we recognized for
    financial statement reporting purposes with respect to the
    applicable fiscal year in accordance with Statement of Financial
    Accounting Standards No. 123(R), Share-Based Payment, or
    SFAS 123(R). For additional information on the calculation
    of the net compensation expense including the valuation
    assumptions used, please refer to note 12 of our audited
    consolidated financial statements. We did not grant any new
    option awards during 2008. The compensation expense reflected is
    for option awards granted in previous years. 102




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##### Table of Contents



(4)
    
    Represents company paid travel expenses of $21,000 and lodging
    expenses of $42,000 incurred by Mr. Robinson during 2008,
    which were grossed up by $57,446 to make him whole for taxes he
    was required to pay.  Narrative
    Disclosure Relating to Summary Compensation Tables
  Chief
    Executive Officer Employment Agreement
  Form 8-K
    Employment
    Agreements with Other Named Executive Officers
    Form 8-K
  Management
    Incentive Plan
   103




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##### Table of Contents



OUTSTANDING
    EQUITY AWARDS AT FISCAL YEAR-END
  Option Awards(1)


Stock Awards(1)Number of Units


Number of Units








Number of


Market ValueUnderlying


Underlying








Units That


of Units ThatUnexercised


Unexercised








Have Not


Have NotOptions


Options


Option


Option


Vested


VestedName

Vested


Unvested(2)


Exercise Price


Expiration Date


(2)


(3)Michael K. Robinson


2,256



3,610


$
137.50



3/30/2010






$
Corey Rinker


258



516



137.50



3/30/2010



103



14,163Brian P. Crotty


716



1,433



137.50



3/30/2010



287



39,463Charles C. Hunter


258



516



137.50



3/30/2010



103



14,163Terrence J. Anderson


559



1,117



137.50



3/30/2010



223



30,663Ken A. Shulman


430



859



137.50



3/30/2010



172



23,650     (1)
    
    Securities granted under the MIP have been presented as units
    for purposes of this table only. Each unit represents
    1 share of Series C preferred stock and 25 shares
    of Class B common stock. However, while presented as a unit
    for convenience, the actual grants represent separate and
    distinct securities for accounting and securities law purposes.(2)
    
    The unvested portion of the award will vest in equal annual
    installments at the end of March of 2009 and 2010.(3)
    
    The market value of the shares assumes a price of $137.50 per
    unit which represents the fair market value of a unit as of
    December 31, 2008. Determined in reliance on a valuation
    performed in April 2007, which was the last valuation performed
    by the Company.  OPTION
    EXERCISES AND STOCK VESTED AT FISCAL YEAR-END
    Stock AwardsNumber of UnitsClass or Series


Acquired on


Value RealizedName

of Stock


Vesting


on VestingMichael K. Robinson









$
Corey Rinker


(1
)


52



7,150Brian P. Crotty


(1
)


143



19,663Charles C. Hunter


(1
)


52



7,150Terrence J. Anderson


(1
)


112



15,400Ken A. Shulman


(1
)


86



11,825     (1)
    
    Securities granted under the MIP have been presented as units
    for purposes of this table only. Each unit represents
    1 share of Series C preferred stock and 25 shares
    of Class B common stock. However, while presented as a unit
    for convenience, the actual grants represent separate and
    distinct securities for accounting and securities law purposes.
    The market value of the units acquired upon vesting is based on
    a unit price of $137.50 per unit. The amounts shown in the Value
    Realized on Vesting column is calculated by multiplying the
    number of units by the fair value of the underlying shares on
    the vesting date. 104




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##### Table of Contents



Potential
    Payments Upon Termination Or Change In Control
    Equity Acceleration


Value of TaxName

Event

Cash Severance


(1)


Gross-Up


TotalMichael K. Robinson

Voluntary Termination

$



$



$



$
Involuntary Termination


850,000



203,279







1,053,279Death or Disability














Change in Control Termination


850,000



203,279







1,053,279Corey Rinker

Voluntary Termination














Involuntary Termination


270,000











270,000Death or Disability














Change in Control Termination


270,000



43,218







313,218Brian P. Crotty

Voluntary Termination














Involuntary Termination


335,000











335,000Death or Disability














Change in Control Termination


335,000



120,155







455,155Charles C. Hunter

Voluntary Termination














Involuntary Termination


270,000











270,000Death or Disability














Change in Control Termination


270,000



43,218







313,218Terrence J. Anderson

Voluntary Termination














Involuntary Termination


270,000











270,000Death or Disability














Change in Control Termination


270,000



93,561







363,561Ken A. Shulman

Voluntary Termination














Involuntary Termination


270,000











270,000Death or Disability














Change in Control Termination


270,000



72,020







342,020  105




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##### Table of Contents



(1)
    
    The calculation of the value of the equity acceleration is
    determined by calculating the number of units that would vest in
    connection with the applicable event (each unit representing
    1 share of Series C preferred stock and 25 shares
    of Class B common stock) and multiplying it by $56.31 in
    the case of an option award or $137.50 in the case of a stock
    award, which represents the fair market value of a unit as of
    the date of grant in April 2007. For additional information on
    the calculation of the fair market value of stock award units or
    option award units, please refer to note 12 of our audited
    consolidation financial statements.(2)
    
    Pursuant to the terms of Mr. Robinsons employment
    agreement, in the event that any payment under the agreements
    constitutes an excess parachute payment under
    Section 280G of the Internal Revenue Code, he will be
    entitled to a
    gross-up
    payment to cover the 20% excise tax which may be imposed on such
    payment pursuant to Section 4999 of the Internal Revenue
    Code (amount shown is estimate).  DIRECTOR
    COMPENSATION
     106




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##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    
    each stockholder known by us to beneficially own more than 5% of
    each class of our outstanding stock;
    each of our directors and executive officers; and
    all directors and executive officers as a group.  c/o Broadview Series A-1 Series B-1
  Class A





Class BClass A


Common Stock on an


Class B


Common Stock on anCommon Stock


As-Converted Basis(1)


Common Stock


As-Converted Basis(1)Amount





Amount





Amount





Amountand


Percent of


and


Percent of


and


Percent of


and


Percent ofNature of


Outstanding


Nature of


Outstanding


Nature of


Outstanding


Nature of


OutstandingBeneficial


Shares


Beneficial


Shares


Beneficial


Shares


Beneficial


SharesOwnership


of Class


Ownership


of Class


Ownership


of Class


Ownership


of ClassSteven F. Tunney(2)


4,698,987



50.3
%


10,705,898



69.7
%










4,698,987



50.3
%B. Hagen Saville(2)


4,698,987



50.3
%


10,705,898



69.7
%










4,698,987



50.3
%Samuel G. Rubenstein(2)


4,698,987



50.3
%


10,705,898



69.7
%










4,698,987



50.3
%John S. Patton, Jr(2)


4,698,987



50.3
%


10,705,898



69.7
%










4,698,987



50.3
%Robert Manning(3)


1,508,506



16.1
%


3,436,932



30.5
%










1,508,506



16.1
%Peter J. Barris(4)


821,345



8.8
%


1,871,326



18.0
%










821,345



8.8
%Michael Robinson(5)


















92,075



27.4
%Brian Crotty(6)


















59,650



17.7
%Terrence J. Anderson(7)


















51,750



15.4
%Kenneth A. Shulman(8)


















32,225



9.6
%Corey Rinker(9)


















24,625



7.3
%Charles Hunter(10)


















22,875



6.8
%Directors and Executive Officers as a Group(11)


7,028,838



75.2
%


16,014,156



87.4
%


283,200



84.1
%


7,028,838



75.2
%MCG(2)


4,698,987



50.3
%


10,705,898



69.7
%










4,698,987



50.3
%Baker(3)


1,508,506



16.1
%


3,436,932



30.5
%










1,508,506



16.1
%NEA(4)


821,345



8.8
%


1,871,326



18.0
%










821,345



8.8
%Com Ventures(12)


360,109



3.9
%


820,460



8.4
%










360,109



3.9
%WPG(13)


224,072



2.4
%


510,519



5.3
%










224,072



2.4
%Apollo(14)


165,965



1.8
%


378,129



4.0
%










165,965



1.8
%Trimaran(15)


128,985



1.4
%


293,875



3.1
%










128,985



1.4
%     (1)
    
    The calculation of Class A Common Stock on an As-Converted
    Basis includes all shares of Series A Preferred Stock,
    Series A-1
    Preferred Stock, Series B Preferred Stock and
    Series B-1
    Preferred Stock and warrants and options convertible or
    exercisable into Class A Common Stock within 60 days
    of December 31, 2008. This 107




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##### Table of Contents



does not include shares of capital stock, warrants or options
    that are convertible or exercisable into Class A Common
    Stock upon a change of control or qualifying initial public
    offering.The calculation of Class B Common Stock on an As-Converted
    Basis includes all shares of Series C Preferred Stock,
    warrants and options convertible or exercisable into
    Class B Common Stock within 60 days of
    December 31, 2008. This does not include shares of capital
    stock, warrants or options that are convertible or exercisable
    into Class B Common Stock upon a change of control or
    qualifying initial public offering.(2)
    
    MCG beneficially owns (i) 87,254 shares of our
    Series A Preferred Stock, which represents 100.0% of the
    outstanding shares of our Series A Preferred Stock and
    (ii) 100,702 shares of our
    Series A-1
    Preferred Stock, which represents 100% of the outstanding shares
    of our
    Series A-1
    Preferred Stock. Each of Mr. Tunney, Mr. Saville,
    Mr. Rubenstein and Mr. Patton are officers of MCG
    Capital Corporation. By virtue of such relationship, each of
    Mr. Tunney, Mr. Saville, Mr. Rubenstein and
    Mr. Patton, may be deemed to beneficially own the shares
    listed as beneficially owned by MCG. Each of Mr. Tunney,
    Mr. Saville, Mr. Rubenstein and Mr. Patton
    disclaims beneficial ownership of such shares.(3)
    
    Baker beneficially owns (i) 38,119 shares of our
    Series B Preferred Stock, which represents 41.8% of the
    outstanding shares of our Series B Preferred Stock and
    (ii) 22,221 shares of our
    Series B-1
    Preferred Stock, which represents 34.2% of the outstanding
    shares of our
    Series B-1
    Preferred Stock. Mr. Manning is a manager of the general
    partners of Baker Communications Fund, L.P. and Baker
    Communications Fund II (QP) L.P. By virtue of such
    relationship, Mr. Manning may be deemed to beneficially own
    the shares listed as beneficially owned by Baker.
    Mr. Manning disclaims beneficial ownership of such shares.(4)
    
    NEA beneficially owns (i) 20,838 shares of our
    Series B Preferred Stock, which represents 22.8% of the
    outstanding shares of our Series B Preferred Stock and
    (ii) 12,016 shares of our
    Series B-1
    Preferred Stock, which represents 18.5% of the outstanding
    shares of our
    Series B-1
    Preferred Stock. Mr. Barris is the managing general partner
    of New Enterprise Associates VII, L.P., New Enterprise
    Associates 9, L.P., New Enterprise Associates 10, L.P. and NEA
    Presidents Fund. By virtue of such relationship, Mr. Barris
    may be deemed to beneficially own the shares listed as
    beneficially owned by NEA. Mr. Barris disclaims beneficial
    ownership of such shares.(5)
    
    Mr. Robinson beneficially owns 3,683 shares of our
    Series C Preferred Stock, which represents 27.4% the
    outstanding shares of our Series C Preferred Stock.(6)
    
    Mr. Crotty beneficially owns 2,386 shares of our
    Series C Preferred Stock, which represents 17.7% of the
    outstanding shares of our Series C Preferred Stock.(7)
    
    Mr. Anderson beneficially owns 2,070 shares of our
    Series C Preferred Stock, which represents 15.4% of the
    outstanding shares of our Series C Preferred Stock.(8)
    
    Mr. Shulman beneficially owns 1,289 shares of our
    Series C Preferred Stock, which represents 9.6% of the
    outstanding shares of our Series C Preferred Stock.(9)
    
    Mr. Rinker beneficially owns 985 shares of our
    Series C Preferred Stock, which represents 7.3% of the
    outstanding shares of our Series C Preferred Stock.(10)
    
    Mr. Hunter beneficially owns 915 shares of our
    Series C Preferred Stock, which represents 6.8% of the
    outstanding shares of our Series C Preferred Stock.(11)
    
    The Directors and Executive Officers as a group beneficially own
    (i) 87,254 shares of our Series A Preferred
    Stock, which represents 100.0% of the outstanding shares of our
    Series A Preferred Stock, (ii) 100,702 shares of
    our
    Series A-1
    Preferred Stock, which represents 100% of the outstanding shares
    of our
    Series A-1
    Preferred Stock, (iii) 58,957 shares of our
    Series B Preferred Stock, which represents 64.6% of the
    outstanding shares of our Series B Preferred Stock,
    (iv) 34,237 shares of our
    Series B-1
    Preferred Stock, which represents 52.7% of the outstanding
    shares of our
    Series B-1
    Preferred Stock and (v) 11,328 shares of our
    Series C Preferred Stock, which represents 84.1% of the
    outstanding shares of our Series C Preferred Stock.(12)
    
    References to Com Ventures are to Communications Ventures II,
    L.P., ComVentures IV, L.P., Communications Ventures II
    Affiliates Fund, L.P., ComVentures IV CEO Fund, L.P., and
    ComVentures IV Entrepreneurs Fund, L.P. Com Ventures
    beneficially owns (i) 10,191 shares of our
    Series B Preferred Stock, which represents 108




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##### Table of Contents



11.2% of the outstanding shares of our Series B Preferred
    Stock and (ii) 4,213 shares of our
    Series B-1
    Preferred Stock, which represents 6.5% of the outstanding shares
    of our
    Series B-1
    Preferred Stock.(13)
    
    References to WPG are to Weiss, Peck & Greer Venture
    Associates IV, L.L.C., WPG Enterprise Fund III, L.L.C.,
    Weiss, Peck & Greer Venture Associates IV Cayman,
    L.P., and WPG Information Sciences Entrepreneur Fund, L.P. WPG
    beneficially owns (i) 6,418 shares of our
    Series B Preferred Stock, which represents 7.0% of the
    outstanding shares of our Series B Preferred Stock and
    (ii) 2,545 shares of our
    Series B-1
    Preferred Stock, which represents 3.9% of the outstanding shares
    of our
    Series B-1
    Preferred Stock.(14)
    
    References to Apollo are to APEUREKAGGN, LLC. Apollo
    beneficially owns 6,639 shares of our
    Series B-1
    Preferred Stock, which represents 10.2% of the outstanding
    shares of our
    Series B-1
    Preferred Stock.(15)
    
    References to Trimaran are to CIBC Capital Corporation, CIBC
    Employee Private Equity Fund, Trimaran Capital, LLC, Trimaran
    Fund II, LLC, and Trimaran Parallel Fund II,
    LLC.Trimaran beneficially owns 5,159 shares of our
    Series B-1
    Preferred Stock, which represents 7.9% of the outstanding shares
    of our
    Series B-1
    Preferred Stock.  Form S-1 No. 333-147720)
  Securities
    authorized for issuance under equity compensation
    plans
  Equity Compensation Plan InformationNumber of RemainingNumber of





Units AvailableRestricted

Number of

Exercise Price of

for Future IssuanceStock

Options

Outstanding

under EquityPlan Category

Units(1)

Units(1)

Option Units

Compensation PlansEquity compensation plans approved by security holders(2)


14,402



20,900


$
137.50



17,030Total


14,402



20,900


$
137.50



17,030     (1)
    
    Securities granted under the MIP have been presented as units
    for purposes of this table only. Each unit represents
    1 share of Series C preferred stock and 25 shares
    of Class B common stock. However, while presented as a unit
    for convenience, the actual grants represent separate and
    distinct securities for accounting and securities law purposes.(2)
    
    For a description of the material features of the MIP, see the
    section entitled Executive Compensation 
    Compensation Discussion & Analysis. 109




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##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence  Amended
    and Restated Shareholders Agreement
          Series A-1 Series B-1 and/or Series C-1 Form S-3
  Employment
    Agreements
    Policies
    and Procedures Regarding Transactions with Related
    Persons
  Regulation S-K
  Director
    Independence
  Rule 10A-3
 110




---



##### Table of Contents



Item 14.
    Principal
    Accountant Fees and Services    Years Ended December 31,2007


2008Audit Fees

$
2,304


$
1,666Audit-Related Fees


423



Tax Fees


154



All Other Fees






Total Fees

$
2,881


$
1,666   Form 10-Q,
 111




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##### Table of Contents



PART IV
  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial Statements and Schedules
  Form 10-K.
    Report of Independent Registered Public Accounting FirmConsolidated Balance Sheets as of December 31, 2008 and 2007Consolidated Statements of Operations for the Years Ended
    December 31, 2008, 2007 and 2006Consolidated Statements of Stockholders Equity
    (Deficiency) for the Years Ended December 31, 2008, 2007,
    and 2006Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2008, 2007, and 2006Notes to Consolidated Financial StatementsFinancial Statement Schedules   SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
    BROADVIEW NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Balance atBeginning of


Charges to


Other





Balance atPeriod


Expenses


Accounts


Deductions(b)


End of PeriodAllowance for uncollectible accounts receivable:Year Ended December 31, 2006

$
6,695


$
6,384


$
4,724
(a)

$
(9,832
)

$
7,971Year Ended December 31, 2007


7,971



6,546



5,380
(a)


(9,815
)


10,082Year Ended December 31, 2008


10,082



5,539



10,476



(14,163
)


11,934Valuation allowance for deferred tax assets:Year Ended December 31, 2006

$
84,642


$



$
(83,668
)(c)

$



$
974Year Ended December 31, 2007


974







27,106
(d)






28,080Year Ended December 31, 2008


28,080







16,563







44,643     (a)
    
    Allowance for Uncollectible Accounts Receivable includes $3,485
    and $1,273 of allowances for uncollectible accounts receivable
    as of acquisition dates from business combinations occurring
    during the year ended December 31, 2006 and 2007,
    respectively and recoveries of amounts previously written off.(b)
    
    Allowance for Uncollectible Accounts Receivable includes amounts
    written off as uncollectible.(c)
    
    Net effect of the completion of the study of the available net
    operating loss carryforwards (NOLs) resulting from
    the 2005 merger and current year activity.(d)
    
    Net effect of purchase accounting in relation to 2007 merger and
    current year activity.  (b) Exhibits
  ExhibitNo.

Description2
.1

Stock Purchase Agreement, dated as of June 26, 2006, by and
    among Broadview Networks Holdings, Inc., ATX Communications,
    Inc., the stockholders of ATX Communications, Inc. and, for the
    limited purposes set forth therein, Leucadia National
    Corporation.(a)2
.2

Agreement and Plan of Merger, dated as of February 23,
    2007, by and among Broadview Networks Holdings, Inc., Eureka
    Acquisition Corporation, Eureka Broadband Corporation, the
    significant stockholders of Eureka Broadband Corporation set
    forth therein and Jeffrey Ginsberg, as agent for the
    stockholders of Eureka Broadband Corporation.(a) 112




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ExhibitNo.

Description3
.1

Tenth Amended and Restated Certificate of Incorporation, dated
    May 31, 2007, of Broadview Networks Holdings, Inc.*3
.2

Second Amended and Restated Bylaws of Broadview Networks
    Holdings, Inc.(a)4
.1

Indenture, dated as of August 23, 2006, by and among
    Broadview Networks Holdings, Inc., the Guarantors named therein
    and The Bank of New York, as trustee.(a)4
.2

Supplemental Indenture, dated as of September 29, 2006, by
    and among Broadview Networks Holdings, Inc., the Guarantors
    named therein and The Bank of New York, as trustee.(a)4
.3

Form of Exchange
    113/8% Senior
    Secured Note due 2012.(a)4
.4

Form of Guarantee of Exchange
    113/8% Senior
    Secured Note due 2012.(a)4
.5

Second Supplemental Indenture, dated as of May 14, 2007, by
    and among Broadview Networks Holdings, Inc., the Guarantors
    named therein and The Bank of New York, as trustee.(a)4
.6

Third Supplemental Indenture, dated as of May 31, 2007, by
    and among Broadview Networks Holdings, Inc., the Guarantors
    named therein and The Bank of New York, as trustee.(a)4
.7

Security Agreement, dated as of August 23, 2006, by and
    among by and among Broadview Networks Holdings, Inc, the
    subsidiaries of Broadview Networks Holdings, Inc. named therein
    and The Bank of New York, as collateral agent.(a)4
.8

Supplement to the Security Agreement, dated as of
    September 29, 2006, by and among Broadview Networks
    Holdings, Inc, the subsidiaries of Broadview Networks Holdings,
    Inc. named therein and The Bank of New York, as collateral
    agent.(a)4
.9

Second Supplement to the Security Agreement, dated as of
    May 31, 2007, by and among Broadview Networks Holdings,
    Inc, the subsidiaries of Broadview Networks Holdings, Inc. named
    therein and The Bank of New York, as collateral agent.(a)10
.1

Management Incentive Plan, dated as of February 9, 2007, of
    Broadview Networks Holdings, Inc.(a)10
.2

Employment Agreement, dated as of February 10, 2005, by and
    between Broadview Networks Holdings, Inc. and Michael K.
    Robinson.(a)(c)10
.3

Employment Agreement, dated as of March 3, 1994, by and
    between Bridgecom Holdings, Inc. and Brian Crotty.(a)(c)10
.4

Employment Agreement, dated as of January 14, 2004, by and
    between Broadview Networks Holdings, Inc. and Terrence J.
    Anderson.(a)(c)10
.5

Employment Agreement, dated as of January 14, 2005, by and
    between Broadview Networks Holdings, Inc. and Kenneth
    Shulman.(a)(c)10
.6

Employment Agreement, dated as of March 3, 1994, by and
    between Bridgecom Holdings, Inc. and Charles Hunter.(a)(c)10
.7

Employment Agreement, dated as of March 3, 2994, by and
    between Bridgecom Holdings, Inc. and Corey Rinker.(a)(c)10
.8

Credit Agreement, dated as of August 23, 2006, by and among
    Broadview Networks Holdings, Inc., Broadview Networks, Inc.,
    Broadview Networks of Massachusetts, Inc., Broadview Networks of
    Virginia, Inc., the Lenders named therein, Jefferies &
    Company, Inc., as syndication agent, and The CIT Group/Business
    Credit, Inc., as administrative agent, collateral agent and
    documentation agent.(a)10
.9

Collateral Agreement, dated as of August 23, 2006, by and
    among Broadview Networks Holdings, Inc., the Subsidiary Grantors
    named therein and The CIT Group/Business Credit, Inc., as
    administrative agent.(a)10
.10

Supplement to the Collateral Agreement, dated as of
    October 20, 2006, by and among Broadview Networks Holdings,
    Inc., the Subsidiary Grantors named therein and The CIT
    Group/Business Credit, Inc., as administrative agent.(a)10
.11

Second Supplement to the Collateral Agreement, dated as of
    June 26, 2007, by and among Broadview Networks Holdings,
    Inc., the Subsidiary Grantors named therein and The CIT
    Group/Business Credit, Inc., as administrative agent.(a)10
.12

Guaranty Agreement, dated as of August 23, 2006, by and
    among the Subsidiary Grantors named therein and The CIT
    Group/Business Credit, Inc., as administrative agent.(a) 113




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##### Table of Contents



ExhibitNo.

Description10
.13

Supplement to the Guaranty Agreement, dated as of
    October 20, 2006, by and among the Subsidiary Grantors
    named therein and The CIT Group/Business Credit, Inc., as
    administrative agent.(a)10
.14

Second Supplement to the Guaranty Agreement, dated as of
    June 26, 2007, by and among the Subsidiary Grantors named
    therein and The CIT Group/Business Credit, Inc., as
    administrative agent.(a)10
.15

Intercreditor Agreement, dated as of August 23, 2006, by
    and among The CIT Group/Business Credit, Inc., as administrative
    agent, The Bank of New York, as trustee, collateral agent and
    second priority agent, Broadview Networks Holdings, Inc. and the
    Subsidiary Grantors named therein.(a)10
.16

Joinder to the Intercreditor Agreement, dated as of
    October 20, 2006, by and among The CIT Group/Business
    Credit, Inc., as administrative agent, The Bank of New York, as
    trustee, collateral agent and second priority agent, Broadview
    Networks Holdings, Inc. and the Subsidiary Grantors named
    therein.(a)10
.17

Amendment No. 1 to the Intercreditor Agreement, dated as of
    May 10, 2007, by and among The CIT Group/Business Credit,
    Inc., as administrative agent, The Bank of New York, as trustee,
    collateral agent and second priority agent, Broadview Networks
    Holdings, Inc. and the Subsidiary Grantors named therein.(a)10
.18

Joinder No. 2 to the Intercreditor Agreement, dated as of
    June 26, 2007, by and among The CIT Group/Business Credit,
    Inc., as administrative agent, The Bank of New York, as trustee,
    collateral agent and second priority agent, Broadview Networks
    Holdings, Inc. and the Subsidiary Grantors named therein.(a)10
.19

Third Amended and Restated Shareholders Agreement, by and among
    Broadview Networks Holdings, Inc. and the shareholders named
    therein, dated as of May 31, 2007.(b)10
.20

Indemnity Escrow Agreement, dated May 31, 2007, between
    Broadview Networks Holdings, Inc., the agent for the former
    stockholders of Eureka Broadband Corporation and JP Morgan Chase
    Bank, N.A.(b)10
.21

Escrow Agreement, dated September 29, 2006, by and among
    ATX Communications, Inc., LUK CLEC LLC, Broadview Networks
    Holdings, Inc. and JPMorgan Chase Bank, N.A.*10
.22

1997 Stock Option Plan.(c)*10
.23

2000 Stock Option Plan.(c)*12
.1

Ratio of Earnings to Fixed Charges.*21
.1

Subsidiaries of Broadview Networks Holdings, Inc.*31
.1

Certification pursuant to Exchange Act
    Rules 13a-14(a)/15d-14(a),
    as adopted pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.*31
.2

Certification pursuant to Exchange Act
    Rules 13a-14(a)/15d-14(a),
    as adopted pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.*32
.1

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.*32
.2

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.*     *
    
    Filed herewith.(a)
    
    Incorporated by reference to Broadview Networks Holdings,
    Inc.s
    Form S-4/A
    filed on October 16, 2007 (File
    No. 333-142946).(b)
    
    Incorporated by reference to Broadview Networks Holdings,
    Inc.s
    Form 8-K
    filed on November 19, 2007 (File
    No. 333-142946).(c)
    
    Management contract or compensatory plan or arrangement. 114




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##### Table of Contents



SIGNATURES
    BROADVIEW NETWORKS HOLDINGS, INC.
  By:
    /s/  Michael
    K. Robinson   Title:
    Chief Executive Officer, President and Director    Signature

Title

Date/s/  Michael
    K. RobinsonMichael
    K. Robinson

President, Chief Executive Officer, and Director
    (Principal Executive Officer)

March 24, 2009/s/  Corey
    RinkerCorey
    Rinker

Chief Financial Officer, Treasurer and Assistant Secretary
    (Principal Financial and Accounting Officer)

March 24, 2009/s/  Steven
    F. TunneySteven
    F. Tunney

Director

March 24, 2009/s/  Richard
    W. RoedelRichard
    W. Roedel

Director

March 24, 2009/s/  Samuel
    G. RubensteinSamuel
    G. Rubenstein

Director

March 24, 2009/s/  John
    S. Patton, Jr.John
    S. Patton, Jr.

Director

March 24, 2009/s/  B.
    Hagen SavilleB.
    Hagen Saville

Director

March 24, 2009/s/  David
    C. RubergDavid
    C. Ruberg

Director

March 24, 2009/s/  Robert
    ManningRobert
    Manning

Director

March 24, 2009/s/  Peter
    J. BarrisPeter
    J. Barris

Director

March 24, 2009/s/  Raul
    MartynekRaul
    Martynek

Director

March 24, 2009  115




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##### Table of Contents



SUPPLEMENTAL
    INFORMATION TO BE FURNISHED
    WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY
    REGISTRANTS
    WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12
    OF THE ACT
   116