##### Table of Contents





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, 2007ORo

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
   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 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 11, 2008Series 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


25Item 1B.


Unresolved Staff Comments


38Item 2.


Properties


38Item 3.


Legal Proceedings


38Item 4.


Submission of Matters to a Vote of Security
    Holders


38PART IIItem 5.


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


39Item 6.


Selected Consolidated Financial Data


40Item 7.


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


42Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


57Item 8.


Consolidated Financial Statements and
    Supplementary Data


58Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosures


88Item 9A.


Controls and Procedures


88Item 9B.


Other Information


88PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


89Item 11.


Executive Compensation


95Item 12.


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


103Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


106Item 14.


Principal Accountant Fees and Services


108PART IVItem 15.


Exhibits and Financial Statement Schedules


109Schedule II


Valuation and Qualifying Accounts


109EX-3.1: TENTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATIONEX-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      i




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3 8 3 8
 ii




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SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
    
    our history of operating losses;
    our substantial indebtedness;
    the elimination or relaxation of certain regulatory rights and
    protections;
    anti-competitive behavior engaged in by incumbent local exchange
    carriers;
    the failure to anticipate and keep up with technological changes;
    our ability to provide services and systems at competitive
    prices;
    payment issues with incumbent local exchange carriers,
    interexchange carriers and wholesale customers;
    billing and other disputes with vendors;
    the highly competitive nature of the communications market in
    which we operate and declining prices for communications
    services;
    continued industry consolidation;
    the recent intellectual property infringement litigation
    involving the provision of Voice over Internet Protocol services;
    restrictions in connection with our indenture governing the
    notes and credit agreement governing the credit facility;
    servicing our indebtedness;
    government regulation;
    regulatory uncertainties in the communications industry;
    increased regulation of Internet-protocol-based service
    providers;
    declining prices for communications services;
    vendor bills related to past periods;
    the ability to maintain certain real estate leases and
    agreements; iii




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
    system disruptions or the failure of our information systems to
    perform as expected;
    interruptions in the business operations of third party service
    providers;
    the loss of our customers;
    the ability to seek indemnification for losses from individuals
    and entities from whom we have acquired assets and operations;
    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 efficiently integrate InfoHighway into our
    operations or 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; and
    compliance with Section 404 of Sarbanes-Oxley.   iv




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PART I  Item 1.
    Business  Company
    Overview
  60-70%.
    on-net.
       1




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on-net off-net
  tm
    Industry
    Overview
    Our
    Strengths
    Significant Growth Potential of our newer product
    offerings.
 2




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Experience Integrating Companies and Providing New
    Services. off-net
  Unique Integrated OSS Infrastructure. e-Care
  Award Winning Customer Service.
  Facilities-Based Network Infrastructure. on-net.
  Experienced and Proven Senior Management
    Team.
 3




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off-net
  Our
    Markets
    Region

MarketNew York Metro

New York City 
    Long Island
    WestchesterPennsylvania

Allentown
    Pittsburgh
    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 and Northern Virginia

District of Columbia and Northern VirginiaConnecticut

Connecticut   Our
    Customers
       4




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Products
    and Services
  IP-based
  IP-based
    Voice Services

Data Services

Value-Added Products and 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

 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

 Traditional and converged telephone systems
     Hosted VoIP solutions
     Enhanced e-mail security
     Managed firewall
     Internet policy management
     Managed Wide Area Network
     Local Area Network/Wide Area Network integration
     Web hosting
     Inside wiring
     Data backup and recovery
     Unified Communications solutions
     Fixed-Mobile Convergence solutions   Voice
    Services
  IP-based
 5




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Data
    Services
  IP-based
  Integrated
    Services
  IP-based IP-based IP-based
  Value-Added
    Products and Services
    Managed Services. e-mail
  Hosted VoIP Solutions.
  Sales and
    Marketing
   6




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on-net
      on-net.
    Customer
    Service and Retention
         7




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e-Care e-Care e-mail
  Network
    Deployment
  first-mile
  Voice
    and Data Switches
    Collocations
    and Edge Equipment
    On-Net
    (Lit) Buildings
    ATM
    Backbone Network and IP Network Equipment
  IP-based
 8




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Fiber
    Network and Fiber Equipment
    Feature/Application
    Servers
    Customer
    Access Methods
  tm off-net and/or on-net
    on-net on-net
    On-net T-1: On-net T-1
  On-net
    unbundled network element loops: on-net
 9




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Off-Net: Off-net tm Off-net off-net and/or off-net
  Service
    Agreements with Carriers
  off-net off-net
      Integrated
    OSS
   10




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Sales,
    Order Entry and Provisioning Systems
        Customer
    Relationship Management System
  e-Care e-Care
 11




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Network
    Management Systems
    Billing
    System
  e-Care
  Cost
    Assurance System
    Collections
    Management System
    Competition
    Regional
    Bell Operating Companies
   12




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Competitive
    Local Exchange Carriers and New Market Entrants
      Interexchange
    Carriers
    Data/Internet
    Services Providers
   13




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Vendors,
    Installers and Communication Management Companies
    Intellectual
    Property
      Employees
    Available
    Information
  Form 10-K, Form 10-Q, Form 8-K, (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
   14




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Federal
    Regulation
      
    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 15




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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.
       16




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17




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and/or
  Special Access. and/or
  Interconnection Agreements. state-by-state
   18




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Collocation. and/or
  Regulation of Internet Service Providers.
    Long Distance Competition.
    Detariffing.
  Intercarrier Compensation.
 19




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Verizon/MCI Merger.
 20




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CALEA. and/or
    Customer Proprietary Network Information.
  Universal Service.
     21




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Telephone Numbering.
  Slamming.
  Taxes and Regulatory Fees. and/or
  State
    Regulation
     22




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and/or
    Local
    Regulation
   23




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Regulation
    of VoIP
  Federal
    and State
        IP-based IP-based
  IP-enabled IP-enabled
   24




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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.
  We
    have a history of operating losses and we may not be profitable
    in the future.
    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 downturn in general
    economic conditions or in our business or changing market
    conditions and regulations. 25




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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.
    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.
     26




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Difficulties
    we may experience with incumbent local exchange carriers,
    interexchange carriers, and wholesale customers over payment
    issues may harm our financial performance.
         27




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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.
    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.
    
    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; 28




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
    anticipated increased pricing flexibility and relaxed regulatory
    oversight;
    larger networks; and
    benefits from existing regulations that favor the incumbent
    local exchange carriers.    IP-based
  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
 29




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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;
    enter into transactions with affiliates;
    merge, consolidate, reorganize or sell our assets; and
    engage in any business other than activities related or
    complementary to communications.    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.
      Elimination
    or relaxation of regulatory rights and protections could harm
    our business, results of operations and financial
    condition.
   30




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Regulation.
  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.
      and/or
 31




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Regulation.
  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
  Declining
    prices for communications services could reduce our revenues and
    profitability.
   32




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Our
    vendors periodically issue substantial bills related to services
    provided during past periods.
    Certain
    real estate leases and agreements are important to our business
    and failure to maintain such leases and agreements could
    adversely affect us.
      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.
        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.
   33




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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.
    Limits
    exist on our ability to seek indemnification for losses from
    individuals and entities from whom we have acquired assets and
    operations.
    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.
     34




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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;
    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.      Failure
    to successfully and efficiently integrate InfoHighway into our
    operations may adversely affect our ability to realize the
    expected benefits of the merger.
   35




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
    retaining existing employees;
    transitioning the branding of the acquired company to Broadview;
    persuading employees of Broadview and the acquired companies
    that the business cultures are compatible, maintaining morale,
    and retaining and integrating key employees;
    incorporating new facilities into our business operations;
    coordinating sales and marketing functions;
    combining products and services;
    integrating systems; and
    maintaining our standards, controls, procedures, and policies.    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.      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.
   36




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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.
    Complying
    with Section 404 of Sarbanes-Oxley may strain our resources
    and divert management.
  Form 10-K
 37




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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


September 2023



26,242Long Island City, NY


July 2009



21,112Charlestown, MA


April 2010



12,490Philadelphia, PA


April 2008



10,000Horsham, PA


November 2010



9,244Syracuse, NY


October 2009



8,000Philadelphia, PA


January 2013



6,558Herndon, VA


June 2010



5,000   Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   38




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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   Management Incentive Plan ( options and restricted stock to 52,332 shares of our Series C Preferred Stock and
    1,308,297 shares of our non-voting Class B Common
    Stock
  Series B-1 Series B-1 Series B-1 Series B-1
   39




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Item 6.
    Selected
    Consolidated Financial Data  1 2
    Predecessor





SuccessorTwo Months


Ten MonthsYear Ended


Ended


EndedDecember 31,


February 29,


December 31,


Year Ended December 31,2003


2004


2004


2005


2006


2007Statement of operations data:Revenues

$
85,433


$
13,631


$
72,826


$
240,396


$
272,653


$
451,159Operating expenses:Cost of revenues(1)


43,706



7,081



36,105



115,214



130,841



234,166Sales, general and administrative(2)


27,192



5,363



30,523



94,138



105,986



166,322Software development














2,301



1,819



2,293Depreciation and amortization


847



284



8,554



45,756



49,781



75,980Impairment charges






















4,000Merger integration costs


1,025



10



2,834



4,531



1,430



500Total operating expenses


72,770



12,738



78,016



261,940



289,857



483,261Income (loss) from operations


12,663



893



(5,190
)


(21,544
)


(17,204
)


(32,102
)Other income (expense)


(715
)


(1,001
)


(4,523
)






21



240Interest expense


(3,003
)


(704
)


(3,399
)


(17,842
)


(25,463
)


(34,390
)Interest income


168



29



31



458



1,395



1,489Income (loss) before provision for income taxes


9,113



(783
)


(13,081
)


(38,928
)


(41,251
)


(64,763
)Provision (benefit) for income taxes


2,397



2



3,802







262



726Net income (loss)


6,716



(785
)


(16,883
)


(38,928
)


(41,513
)


(65,489
) 40




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Predecessor





SuccessorTwo Months


Ten MonthsYear Ended


Ended


EndedDecember 31,


February 29,


December 31,


Year Ended December 31,2003


2004


2004


2005


2006


2007Dividends on preferred stock














(22,002
)


(32,996
)


(55,031
)Modification of preferred stock






















(95,622
)Income (loss) available to common shareholders

$
6,716


$
(785
)

$
(16,883
)

$
(60,930
)

$
(74,509
)

$
(216,142
)Income (loss) available per common share  basic and
    diluted









$
(7.74
)

$
(9.54
)

$
(10.07
)

$
(23.09
)Weighted average common shares outstanding  basic and
    diluted










2,181,437



6,385,863



7,396,610



9,359,132Statement of cash flow data:Cash flows provided by (used in):Operating activities

$
4,457


$
(652
)

$
(1,735
)

$
8,151


$
13,296


$
(2,671
)Investing activities


(3,454
)


(1,038
)


(40,336
)


(20,731
)


(115,568
)


(88,824
)Financing activities


(1,207
)


784



36,654



25,407



129,471



89,541   Predecessor


SuccessorAs of December 31,2003


2004


2005


2006


2007Balance sheet data:Cash and cash equivalents

$
10,249


$
3,926


$
16,753


$
43,952


$
41,998Property and equipment, net


5,525



9,086



39,547



61,395



77,373Goodwill


5,435



8,379



27,964



69,632



96,154Total assets


36,399



67,366



197,113



318,325



381,798Total debt, including current portion


22,519



23,875



147,204



217,769



313,990Total stockholders equity (deficiency)


2,725



19,707



(12,572
)


20,470



(22,715
)     (1)
    
    Exclusive of depreciation and amortization.(2)
    
    Includes share-based compensation of $308, $673, $754 and $2,552
    for the ten months ended December 31, 2004 and for the
    years ended December 31, 2005, 2006 and 2007, respectively. 41




---



##### 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.
  Overview
         42




---



##### Table of Contents



$
    60-70%.
  IP-based
 43




---



##### Table of Contents



IP-based on-net.
  on-net;
  Results
    of Operations
    Year Ended December 31,2005


2006


2007Consolidated Statement of Operations Data:Revenues:Retail end customer voice and data services


88.2
%


88.5
%


89.7
%Wholesale customer voice and data services


5.1



4.6



2.8Access


6.0



5.5



5.6Network services


99.3



98.6



98.1Other


0.7



1.4



1.9Total revenues


100.0
%


100.0
%


100.0
%Operating expenses:Network services


47.6
%


47.2
%


51.2
%Other cost of revenues


0.3



0.8



0.7Selling, general and administrative


39.2



38.8



36.9Software development


1.0



0.7



0.5Depreciation and amortization


19.0



18.3



16.8Impairment charges


0.0



0.0



0.9Merger integration costs


1.9



0.5



0.1Total operating expenses


109.0



106.3



107.1Loss from operations


(9.0
)


(6.3
)


(7.1
)Other income (expense)


0.0



0.0



0.1Interest expense


(7.4
)


(9.3
)


(7.6
)Interest income


0.2



0.5



0.3Loss before income taxes


(16.2
)


(15.1
)


(14.3
)Provision for income taxes


0.0



0.1



0.2Net loss


(16.2
)%


(15.2
)%


(14.5
)%   Key
    Components of Results of Operations
  Revenues
   44




---



##### 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
 45




---



##### Table of Contents



Selling,
    General and Administrative
        Form 8-K
  Depreciation
    and Amortization
   46




---



##### Table of Contents



Year Ended December 31,2005


2006


2007(In thousands)Statements of Operations Data:Revenues:Network services

$
238,798


$
268,892


$
442,530Other


1,598



3,761



8,629Total revenues


240,396



272,653



451,159Cost of revenues:Network services


114,466



128,794



230,865Other


748



2,047



3,301Total cost of revenues


115,214



130,841



234,166Gross profit:Network services


124,332



140,098



211,665Other


850



1,714



5,328Total gross profit

$
125,182


$
141,812


$
216,993     Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
  Revenues
    Year Ended December 31,2006


2007


% Change(Unaudited)(In thousands)Revenues:Voice and data services

$
241,258


$
404,485



67.7
%Wholesale


12,606



12,693



0.7Access


15,028



25,352



68.7Total network services


268,892



442,530



64.6Other


3,761



8,629



129.4Total revenues

$
272,653


$
451,159



65.5
%    47




---



##### Table of Contents



Cost
    of Revenues (exclusive of depreciation and
    amortization)
      off-net POTS
  Gross
    Profit (exclusive of depreciation and
    amortization)
  on-net. on-net
  Selling,
    General and Administrative
     48




---



##### Table of Contents



Depreciation
    and Amortization
    Impairment
    Charges
    Interest
    Year Ended December 31,2006


2007(In thousands)Interest expense excluding conversion fee and financing cost
    write-off

$
22,738


$
34,390Weighted average debt outstanding

$
181,938


$
276,565Effective interest rate


12.49
%


12.43
%     Net
    Loss
   49




---



##### Table of Contents



Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
  Revenues
    Year Ended December 31,2005


2006


% Change(In thousands)Revenues:Voice and data services

$
211,919


$
241,258



13.8
%Wholesale


12,367



12,606



1.9Access


14,512



15,028



3.6Total network services


238,798



268,892



12.6Other


1,598



3,761



135.4Total revenues

$
240,396


$
272,653



13.4
%     Cost
    of Revenues (exclusive of depreciation and
    amortization)
      Gross
    Profit (exclusive of depreciation and
    amortization)
  on-net. on-net,
 50




---



##### Table of Contents



Selling,
    General and Administrative
    Depreciation
    and Amortization
    Interest
    Year Ended December 31,2005


2006(In thousands)Interest expense excluding conversion fee and financing cost
    write-off

$
17,842


$
22,738Weighted average debt outstanding

$
144,250


$
181,938Effective interest rate


12.37
%


12.49
%     Net
    Loss
    Off-Balance
    Sheet Arrangements
    Liquidity
    and Capital Resources
   51




---



##### Table of Contents



Disputes
          Credit
    Facility
     52




---



##### Table of Contents



2006
    Note and 2007 Note Offerings
  3 8
  3 8 3 8
  3 8
 53




---



##### Table of Contents



Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
    Cash
    Flows from Operating Activities
    Cash
    Flows from Investing Activities
    Cash
    Flows from Financing Activities
    Capital
    Expenditures
    Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
  Cash
    Flows from Operating Activities
    Cash
    Flows from Investing Activities
    Cash
    Flows from Financing Activities
   54




---



##### Table of Contents



Capital
    Expenditures
    Contractual
    Obligations
    Less Than


1-3


3-5


More ThanTotal


1 Year


Years


Years


5 Years(In thousands)113/8% senior
    secured notes due 2012

$
300,000


$



$



$
300,000


$
Cash interest for senior secured notes


170,625



34,125



68,250



68,250



Capital lease obligations


11,324



4,377



6,658



289



Operating leases


41,242



10,575



17,963



7,589



5,115Subtotal


523,191



49,077



92,871



376,128



5,115Purchase commitment obligations:Communications commitments


152,938



49,944



80,732



22,262



Total contractual obligations

$
676,129


$
99,021


$
173,603


$
398,390


$
5,115   Application
    of Critical Accounting Policies and Estimates
      Revenue
    Recognition
   55




---



##### Table of Contents



Accounts
    Receivable and Allowance for Doubtful Accounts
    Impairment
    of Long-Lived Assets
  Accounting for the
    Impairment or Disposal of Long-Lived Assets
  Goodwill
    and Other Intangible Assets
  Goodwill and Other Intangible Assets
  Disputes
      Uncertainty
    in Income Taxes
  Accounting for Uncertainty
    in Income Taxes
 56




---



##### Table of Contents



Other
    Matters
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk      3 8
 57




---



##### 



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


59Consolidated Balance Sheets at December 31,
    2006 and 2007


60Consolidated Statements of Operations for the
    years ended December 31, 2005, 2006 and 2007


61Consolidated Statements of Stockholders
    Equity (Deficiency) for the years ended December 31, 2005,
    2006 and 2007


62Consolidated Statements of Cash Flows for the
    years ended December 31, 2005, 2006 and 2007


63Notes to Consolidated Financial Statements


64Financial Statement Schedule


109   58




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             Ernst &
    Young LLP
    59




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES



Consolidated
    Balance Sheets  SuccessorDecember 31,2006


2007(In thousands, except share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
43,952


$
41,998Restricted cash


460



Accounts receivable, less allowance for doubtful accounts of
    $7,971 and $10,082


41,313



56,426Other current assets


8,308



8,463Total current assets


94,033



106,887Property and equipment, net


61,395



77,373Goodwill


69,632



96,154Intangible assets, net of accumulated amortization of $65,128
    and $109,335


79,848



82,841Other assets


13,417



18,543Total assets

$
318,325


$
381,798LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)Current liabilities:Accounts payable

$
12,684


$
21,247Accrued expenses and other current liabilities


47,506



43,952Taxes payable


8,604



10,818Deferred revenues


8,019



10,148Current portion of capital lease obligations and equipment notes


3,084



3,136Total current liabilities


79,897



89,301Long-term debt


210,000



304,740Deferred rent payable


2,747



2,628Capital lease obligations and equipment notes, net of current
    portion


4,685



6,114Deferred income taxes payable






1,141Other


526



589Total liabilities


297,855



404,513Stockholders equity (deficiency):Common stock A  $.01 par value; authorized
    80,000,000, issued and outstanding 8,871,427 shares and
    9,342,880 shares, respectively


102



107Common stock B  $.01 par value; authorized
    10,000,000, issued and outstanding 0 shares and
    360,050 shares, respectively






4Series A Preferred stock  $.01 par value;
    authorized 89,526 shares, designated, issued and
    outstanding 89,521 shares and 87,254 shares,
    respectively, entitled in liquidation to $112,925 and $123,880


1



1Series A-1
    Preferred stock  $.01 par value; authorized
    105,000 shares, designated, issued and outstanding
    100,702 shares, entitled in liquidation to $127,030 and
    $142,973


1



1Series B Preferred stock  $.01 par value;
    authorized 93,180 shares, designated, issued and
    outstanding 92,832 shares and 91,202 shares,
    respectively, entitled in liquidation to $117,102 and $129,485


1



1Series B-1
    Preferred stock  $.01 par value; authorized
    86,000 shares, designated, issued and outstanding
    42,231 shares and 64,986 shares, respectively,
    entitled in liquidation to $53,272 and $92,265






1Series C Preferred stock  $.01 par value;
    authorized 52,332 shares, designated, issued and
    outstanding 0 shares and 14,402 shares, respectively,
    entitled in liquidation to $0 and $13,011






Additional paid-in capital


117,689



140,270Accumulated deficit


(97,324
)


(163,100
)Total stockholders equity (deficiency)


20,470



(22,715
)Total liabilities and stockholders equity (deficiency)

$
318,325


$
381,798    60




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES



Consolidated
    Statements of Operations  Year Ended December 31,2005


2006


2007(In thousands)Revenues

$
240,396


$
272,653


$
451,159Operating expenses:Cost of revenues (exclusive of depreciation and amortization)


115,214



130,841



234,166Selling, general and administrative (includes share-based
    compensation of $673, $754 and $2,552)


94,138



105,986



166,322Software development


2,301



1,819



2,293Depreciation and amortization


45,756



49,781



75,980Impairment charges










4,000Merger integration costs


4,531



1,430



500Total operating expenses


261,940



289,857



483,261Loss from operations


(21,544
)


(17,204
)


(32,102
)Other income






21



240Interest expense


(17,842
)


(25,463
)


(34,390
)Interest income


458



1,395



1,489Loss before provision for income taxes


(38,928
)


(41,251
)


(64,763
)Provision for income taxes






(262
)


(726
)Net loss


(38,928
)


(41,513
)


(65,489
)Dividends on preferred stock


(22,002
)


(32,996
)


(55,031
)Modification of preferred stock










(95,622
)Loss available to common shareholders

$
(60,930
)

$
(74,509
)

$
(216,142
)Loss available per common share  basic and diluted

$
(9.54
)

$
(10.07
)

$
(23.09
)Weighted average common shares outstanding  basic and
    diluted


6,385,863



7,396,610



9,359,132    61




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Consolidated
    Statements of Stockholders Equity
    (Deficiency)
  Year Ended December 31,2005


2006


2007Shares


Amount


Shares


Amount


Shares


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


2,181,437


$




6,605,872


$
66



8,871,427


$
102Common stock issued






















Issuance of shares pursuant to the plan of merger


4,359,707



66















Issuance of shares pursuant to management incentive plan


66,250



















Repurchase/(cancellation) of shares


(1,522
)






(1,307,770
)






(97,435
)


(1
)Shares issued in InfoHighway acquisition


















568,888



6Issuance of shares pursuant to conversion of senior unsecured
    subordinated notes










3,573,325



36







Balance at end of year


6,605,872



66



8,871,427



102



9,342,880



107Series B common stockBalance at beginning of year






















Issuance of shares pursuant to management incentive plan


















360,050



4Balance at end of year


















360,050



4Series A Preferred stockBalance at beginning of year


87,254







89,521



1



89,521



1Issuance of shares pursuant to the plan of merger






1















Issuance of new shares in cancellation of note payable






















Issuance/(cancellation) of shares pursuant to management
    incentive plan


2,267















(2,267
)


Balance at end of year


89,521



1



89,521



1



87,254



1Series A-1
    Preferred StockBalance at beginning of year


















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



1Series B Preferred StockBalance at beginning of year










92,832



1



92,832



1Issuance of shares pursuant to the merger


92,510



1















Issuance of shares pursuant to management incentive plan


383



















Repurchase/(cancellation) of shares


(61
)














(1,630
)


Balance at end of year


92,832



1



92,832



1



91,202



1Series B-1
    Preferred StockBalance at beginning of year


















42,231



Shares issued in InfoHighway acquisition


















22,755



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










42,231











Balance at end of year










42,231







64,986



1Series C Preferred StockBalance at beginning of year






















Issuance of shares pursuant to management incentive plan


















14,402



Balance at end of year


















14,402



Additional paid-in capitalBalance at beginning of year






37,391







44,254







117,689Issuance of shares pursuant to the plan of merger






















Issuance of new shares in cancellation of note payable






















Net effect of merger recapitalization






5,908















Stock based compensation






















2,388Repurchase of shares






















(1,538
)Shares issued in InfoHighway acquisition






















17,446Warrants issued in InfoHighway acquisition






















4,285Deferred compensation






955







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






44,254







117,689







140,270Accumulated deficitBalance at beginning of year






(16,883
)






(55,811
)






(97,324
)Adoption of FIN 48






















(287
)Net Loss






(38,928
)






(41,513
)






(65,489
)Balance at end of year






(55,811
)






(97,324
)






(163,100
)Deferred compensationBalance at beginning of year






(801
)






(1,083
)






Deferred compensation






(282
)














Adoption of SFAS No. 123R














1,083







Balance at end of year






(1,083
)














Total stockholders equity (deficiency)





$
(12,572
)





$
20,470






$
(22,715
)    62




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Consolidated
    Statements of Cash Flows
  Year Ended December 31,2005


2006


2007(In thousands)Cash flows from operating activitiesNet loss

$
(38,928
)

$
(41,513
)

$
(65,489
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation


17,679



19,302



31,907Amortization and write-off of deferred financing costs


1,030



2,383



2,437Amortization of intangible assets


28,077



30,479



44,206Amortization of bond premium










(435
)Provision for doubtful accounts


3,823



4,115



6,546Noncash subordinated debt interest


5,991



4,920



Stock based compensation


673



754



2,552Increase in fair value of derivatives


(762
)






Deferred income taxes










1,141Impairment charges










4,000Other


(65
)


(18
)


251Changes in operating assets and liabilities:Restricted cash






(460
)


460Accounts receivable


(3,243
)


(1,492
)


(12,357
)Prepaid expenses and other current assets


1,180



(1,328
)


725Other assets


(1,307
)


(208
)


(2,186
)Accounts payable


(6,007
)


(15,598
)


1,400Accrued and other current liabilities


(378
)


11,349



(19,680
)Deferred revenue


(359
)


260



1,970Deferred rent


747



336



(119
)Other liabilities






15



Net cash provided by (used in) operating activities


8,151



13,296



(2,671
)Cash flows from investing activitiesProceeds from disposal of property and equipment


223







Cash acquired in merger


7,991







Acquisition, net of cash and restricted cash acquired






(88,787
)


(56,638
)Merger acquisition costs


(10,030
)


(3,635
)


(1,768
)Purchase of property and equipment


(18,915
)


(23,146
)


(30,418
)Net cash used in investing activities


(20,731
)


(115,568
)


(88,824
)Cash flows from financing activitiesProceeds from capital lease financing and equipment notes


372



7,794



5,217Payments on capital lease obligations and equipment notes


(2,080
)


(3,367
)


(3,760
)Repayments of long-term debt


(3,000
)


(84,000
)


Repayments of revolving credit facility










(12,005
)Proceeds from issuance of subordinated debt


30,000



10,000



Repayment of subordinated debt






(972
)


Proceeds from issuance of long-term debt






210,000



95,175Drawdowns on revolving credit facility










11,500Payment of subordinated debt conversion fees






(1,531
)


Payment of deferred financing fees






(8,453
)


(4,883
)Payments for shares repurchased under MIP










(1,703
)Other


115







Net cash provided by financing activities


25,407



129,471



89,541Net increase (decrease) in cash and cash equivalents


12,827



27,199



(1,954
)Cash and cash equivalents at beginning of period


3,926



16,753



43,952Cash and cash equivalents at end of period

$
16,753


$
43,952


$
41,998Supplemental disclosure of cash flow informationCash paid during the year for interest

$
10,584


$
7,123


$
32,008Supplemental schedule of non-cash informationEquity securities issued in connection with acquisition

$



$



$
21,742    63




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements
    December 31, 2007
    (in thousands, except share information)
  1.
    Organization
    and Description of Business    Change
    of Ownership
    Business Combinations
      2.
    Significant
    Accounting Policies  Basis
    of Presentation
   64




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Revenue
    Recognition
        Costs
    of Revenue
    Cash
    and Cash Equivalents
    Restricted
    Cash
    Accounts
    Receivable and Allowance for Doubtful Accounts
    Property
    and Equipment
   65




---



##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Impairment
    of Long-Lived Assets
    Goodwill
  Goodwill and Other Intangible Assets
  Third
    Party Conversion Costs
    Debt
    Issuance Costs
    Significant
    Vendor
   66




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Income
    Taxes
    Uncertainty
    in Income Taxes
  Accounting for Uncertainty in Income Taxes
  Stock-Based
    Compensation
  Share-Based Payment Accounting for Stock-Based
    Compensation  Transition and Disclosure) Accounting for Stock Issued to
    Employees,
    Software
    Development Costs
  98-1, Accounting for the Cost of Computer Software Developed or
    Obtained for Internal Use (SOP 98-1). SOP 98-1
     67




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Advertising
    Disputes
    Use of
    Estimates
    Comprehensive
    Income
    Accounting
    for Derivatives and Hedging Activities
    3.
    Recent
    Accounting Pronouncements  Business Combinations (Revised)
  The Fair
    Value Option for Financial Assets and Financial
    Liabilities  Including an Amendment of
    SFAS 115
 68




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Fair Value
    Measurements 157-2 FSP 157-2 FSP 157-2
  4.
    Acquisitions
    and Merger Agreements  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
 69




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  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
     70




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##### Table of Contents



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


2007Revenues

$
507,906


$
498,965Net loss

$
(60,720
)

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

$
(9.70
)

$
(23.59
)     2005
    Merger
  EITF 95-3.
 71




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##### Table of Contents



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

$
7,991Accounts receivable


14,915Other current assets


3,335Property and equipment


29,225Customer-based intangibles


84,000Goodwill


19,842Other


985Total assets acquired


160,293Liabilities assumed:Current liabilities


56,893Long-term debt


87,870Other long term liabilities


3,745Total liabilities assumed


148,508Net assets acquired

$
11,785     5.
    Other
    Assets    2006


2007Deferred carrier charges

$
3,021


$
2,563Prepaid expenses


2,729



3,903Other


2,558



1,997Total other current assets

$
8,308


$
8,463     2006


2007Deferred financing costs

$
9,648


$
12,094Lease security and carrier deposits


2,017



2,778Other


1,752



3,671Total other non-current assets

$
13,417


$
18,543    72




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    6.
    Property
    and Equipment    2006


2007Network equipment

$
65,018


$
107,286Computer and office equipment


16,794



19,196Capitalized software costs


8,639



10,607Furniture and fixtures and other


8,084



8,574Leasehold improvements


4,661



5,386103,196



151,049Less accumulated depreciation and amortization


(41,801
)


(73,676
)$
61,395


$
77,373     7.
    Identifiable
    Intangible Assets and Goodwill    Customer Relationships:
    Trademark:
   73




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##### Table of Contents



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


2007Gross








GrossCarrying


Accumulated


Net Carrying


Carrying


Accumulated


Net CarryingValue


Amortization


Value


Value


Amortization


ValueCustomer base

$
137,067


$
(64,901
)

$
72,166


$
183,867


$
(107,168
)

$
76,699Trademarks


7,000







7,000



7,400



(1,258
)


6,142Other


909



(227
)


682



909



(909
)


$
144,976


$
(65,128
)

$
79,848


$
192,176


$
(109,335
)

$
82,841       Year ending December 31:2008

$
40,9582009


16,4312010


11,5202011


4,6052012


3,066Thereafter


6,261$
82,841     Balance at December 31, 2005

$
27,964Effects of 2006 acquisition


41,668Balance at December 31, 2006


69,632Effects of 2007 acquisition


26,258Other


264Balance at December 31, 2007

$
96,154  74




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  8.
    Accrued
    Expenses and Other Current Liabilities    2006


2007Recurring network costs and other operating accruals

$
14,211


$
23,488Carrier settlements(a)


15,186



Accrued interest(b)


8,615



11,375Merger transaction costs(c)


2,999



2,090Payroll related liabilities


6,320



6,840Other


175



159Total accrued expenses and other current liabilities

$
47,506


$
43,952     (a)
    
    In February 2007, we finalized a settlement with our major
    telecommunications supplier and paid $15,200 to extinguish
    approximately $39,000 of outstanding disputes. Additional
    disputes with this and other suppliers are included in accounts
    payable and accrued expenses and other current liabilities.(b)
    
    Represents accrued interest on the Senior Secured Notes.
    Interest is paid semi-annually on March 1 and September 1 of
    each year.(c)
    
    The accrual for merger transaction costs consists of the
    following:  ATX


InfoHighway


LeaseSeverance


Severance


Termination


Other


TotalBalance at December 31, 2006

$
1,810


$



$
781


$
408


$
2,999Additions






2,000











2,000Payments


(1,523
)


(914
)


(149
)


(323
)


(2,909
)Balance at December 31, 2007

$
287


$
1,086


$
632


$
85


$
2,090   9.
    Obligations
    Under Capital and Operating Leases  Capital
    Leases
   75




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Year ending December 31:2008

$
4,6712009


4,3722010


2,7762011


44412,263Less amounts representing interest


3,0139,250Less current portion


(3,136
)Capital lease obligations, net of current portion

$
6,114     Operating
    Leases
    Year ending December 31:2008

$
11,8072009


10,6942010


9,6782011


5,6812012


3,844Thereafter


5,246Total minimum lease payments

$
46,950     Year ending December 31:2008

$
7322009


7412010


6552011


40Total sublease rentals

$
2,168    76




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  10.
    Debt  Senior
    Secured $210,000 Notes
  3 8 3 8
  ,
        Senior
    Secured $90,000 Notes
  3 8 3 4
 77




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Form S-4 3 8
    Revolving
    $25,000 Senior Credit Facility
            Senior
    Credit Facility
       78




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Senior
    Subordinated Debt
      series A-1
  11.
    Shareholders
    Equity (Deficiency)  Equity
  Series A-1 Series B-1 Series A-1 Series B-1
  Series A-1
  Series A-1 Series A-1 Series A-1 Series A-1 Series A-1 Series A-1
 79




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Series B-1
  Series B-1 Series B-1 Series B-1 Series B-1 Series B-1 Series B-1
    Liquidations
   80




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
            12.
    Stock
    Based Compensation  Restricted
    Stock Awards
  40/30/30
  Accounting for
    Certain Transactions Involving Stock Compensation
   81




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Weighted-AverageSeries A and B


Series C


Series A and B


Grant Date FairPreferred


Preferred


Common


ValueOutstanding December 31, 2004














Grants


2,650







66,250


$
502.43Forfeit/Cancel/Repurchase














Outstanding 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


$
137.50     Stock
    Options
      Series C


AverageCommon Stock


Preferred


Exercise PriceOutstanding December 31, 2004


29,352






$
0.01Grants










Forfeit/Cancel/Repurchase


(29,352
)






0.01Outstanding 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


$
137.50  82




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    13.
    Income
    Taxes   2005


2006


2007Current:Federal

$



$



$
(293
)State






262



164Deferred










855$



$
262


$
726     2005


2006


2007Statutory federal income tax rate


34.0
%


34.0
%


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


0.0



0.4



0.2Permanent items


0.0



0.0



0.3Valuation allowance


(34.0
)


(34.4
)


(35.5
)Effective income tax rate


0.0
%


0.0
%


0.0
%       December 312006


2007Accounts receivable

$
1,859


$
3,857Deferred revenue


3,198



3,882Other


1,095



2,153Total deferred tax assets-Current


6,152



9,891Net Operating loss carry forwards


28,040



49,342Customer lists


1,305



3,626Trademark






1,403Other


983



2,218Total deferred tax assets-Noncurrent


30,328



56,588Total deferred tax assets


36,480



66,479Customer Lists


20,778



23,713Trademark


46



1,297Goodwill


1,117



1,141Accelerated Depreciation


13,565



13,389Total deferred tax liabilities-Noncurrent


35,506



39,540Total deferred tax assets-Current


6,152



9,891 83




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  December 312006


2007Valuation allowance


(6,152
)


(9,891
)Net current deferred tax assets






Total deferred tax assets-Noncurrent


30,328



56,588Total deferred tax liabilities-Noncurrent


35,506



39,540Valuation allowance


5,178



(18,189
)Net noncurrent deferred tax liabilities






(1,141
)       Accounting for Uncertainty in Income Taxes
  14.
    Employee
    Savings and Retirement Plan    15.
    Fair
    Values of Financial Instruments   84




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    3 8
  16.
    Commitments
    and Contingencies            Year ending December 31:2008

$
49,9442009


50,9082010


29,8242011


22,262Total future obligations

$
152,938    85




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  17.
    Earnings
    per share    2005


2006


2007Loss available to common shareholders (Numerator):Net loss

$
(38,928
)

$
(41,513
)

$
(65,489
)Dividends on preferred stock


(22,002
)


(32,996
)


(55,031
)Modification of preferred stock










(95,622
)Loss available to common shareholders

$
(60,930
)

$
(74,509
)

$
(216,142
)Shares (Denominator):Weighted average common shares outstanding:Class A common stock


6,385,863



7,396,610



9,131,327Class B common stock










227,805Total weighted average common shares outstanding 
    basic and diluted


6,385,863



7,396,610



9,359,132Loss available per common share  basic and diluted

$
(9.54
)

$
(10.07
)

$
(23.09
)     Earnings Per
    Share
   86




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##### Table of Contents



BROADVIEW
    NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  18.
    Unaudited
    Quarterly Results of Operations    2006Three Months EndedMarch 31


June 30


September 30


December 31(2)Revenues

$
59,369


$
59,377


$
57,675


$
96,232Loss from operations

$
(4,325
)

$
(3,602
)

$
(3,416
)

$
(5,859
)Net loss

$
(9,412
)

$
(8,324
)

$
(11,079
)

$
(12,696
)Dividends on preferred stock


(6,131
)


(6,315
)


(8,600
)


(11,950
)Loss available to common shareholders

$
(15,543
)

$
(14,639
)

$
(19,679
)

$
(24,646
)Loss available per common share  basic and diluted(1)

$
(2.37
)

$
(2.23
)

$
(2.59
)

$
(2.79
)Weighted average common shares outstanding  basic and
    diluted


6,564,872



6,564,872



7,599,147



8,830,247     (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 ATX on September 29, 2006. The
    Companys results of operations for the three months ended
    December 31, 2006 include the operations of ATX.  2007Three Months EndedMarch 31


June 30(2)


September 30


December 31(3)Revenues

$
95,821


$
106,524


$
123,652


$
125,162Loss 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
)

$
(3.19
)

$
(3.15
)

$
(3.72
)Weighted average common shares outstanding  basic and
    diluted


8,848,454



8,983,336



9,342,880



9,342,880     (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 rebranding of ATX
    initiative 87




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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
    Rule 15d-15(b),
    Rule 13a-15(f) 15d-15(f)).
  Item 9B.Other
    Information
   88




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##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance        Name

PositionMichael K. Robinson

Chief Executive Officer and PresidentBrian 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 BoardSamuel G. Rubenstein

DirectorJohn S. Patton, Jr.

DirectorB. Hagen Saville

DirectorDavid C. Ruberg

DirectorRobert Manning

DirectorPeter J. Barris

DirectorRaul Martynek

Director       Biographies
    of Executive Officers
  Michael K. Robinson, Chief Executive Officer and President
    (51).
 89




---



##### Table of Contents



Brian P. Crotty, Chief Operating Officer
    (37).
  Corey Rinker, Chief Financial Officer, Treasurer and
    Assistant Secretary (49).
  Charles C. Hunter, Executive Vice President, General Counsel
    and Secretary (55). 25-year
  Kenneth A. Shulman, Chief Technology Officer and Chief
    Information Officer (54).
 90




---



##### Table of Contents



Terrence J. Anderson, Executive Vice President 
    Corporate Development and Assistant Treasurer
    (41).
  Biographies
    of Directors
  Steven F.
    Tunney, Sr. (46).
  Samuel G. Rubenstein (45).
  B. Hagen Saville (46).
  John S. Patton, Jr. (48).
 91




---



##### Table of Contents



Peter J. Barris (54).
  David C. Ruberg (60).
  Robert Manning (48).
  Raul Martynek (42).
 92




---



##### Table of Contents



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
          Compensation
    Committee Interlocks and Insider Participation
      Indemnification
   93




---



##### Table of Contents



Compensation
    Committee Report
  Form 10-K.
    
 94




---



##### 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. 95




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##### Table of Contents




    McLeod USA Inc.
    MetroPCS Communications Inc.
    Ntelos Holdings Corp.
    Paetec Holding Corp.
    Radiant Systems Inc.
    Savvis, Inc.
    Time Warner Telecom
    XO Holdings    Components
    of Compensation for 2007
    Base
    Salary
    Annual
    Bonuses
  Form 8-K
  Long-Term
    Equity Compensation
   96




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##### Table of Contents



401(k)
    Savings Plan
    Perquisites
    and Other Benefits
    Severance
    Benefits
   97




---



##### Table of Contents



SUMMARY
    COMPENSATION TABLE
    Stock


Option


All OtherSalary


Bonus (1)


Awards


Awards


Compensation


TotalName and Principal Position

Year


($)


($)


($)(2)


($)(3)


($)(4)


($)Michael K. Robinson


2007



400,000







598,923







91,955



1,090,878President and Chief


2006



400,000



300,000



219,813



97,420



96,400



1,016,203Executive OfficerCorey Rinker


2007



260,000







225,889



9,685



80,898



576,472Executive Vice President, Chief


2006



260,000



75,000



129,703











464,703Financial Officer, Treasurer andAssistant SecretaryBrian P. Crotty


2007



310,000







480,089



26,891



77,417



894,397Chief Operating Officer


2006



310,000



190,000



175,550











675,550Charles C. Hunter


2007



250,000







198,164



9,685







457,849Executive Vice President,


2006



250,000



75,000



83,954











408,954General Counsel and SecretaryTerrence J. Anderson


2007



250,000







205,963



20,972







476,935Executive Vice President, Finance


2006



250,000



150,000















400,000and Corporate DevelopmentKen A. Shulman


2007



250,000







161,012



16,130







427,142Executive Vice President, Chief


2006



250,000



100,000















350,000Technology Officer and Chief Information Officer     (1)
    
    In 2008, the ad hoc compensation committee of the board of
    directors approved a discretionary $3 million bonus pool
    that will be allocated among our named executive officers and
    other employees. The bonus was accrued for in the fourth quarter
    of 2007. This pool was established to reward these individuals
    for their efforts in connection with the integration of ATX and
    InfoHighway as well as the continued progress with respect to
    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 2007 annual bonuses has not been
    determined. We expect such amounts to be determined in April
    2008 and will file a
    Form 8-K
    promptly after this information is determined.(2)
    
    Represents the 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.(3)
    
    Represents the 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.(4)
    
    Represents company paid travel ($28,080) and lodging ($63,875)
    expenses incurred by Mr. Robinson and the value of non-cash
    compensation received by Mr. Rinker and Mr. Crotty in
    connection with their acquisition of company owned automobiles. 98




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##### Table of Contents



GRANTS OF
    PLAN-BASED AWARDS TABLE
  All Other StockAwards:Number of


All Other OptionShares of


Awards: Number ofStock or


Securities


Exercise Price of


Grant Date FairGrant


Units (#)


Underlying Options (#)


Option Awards


Value of OptionName

Date


(1)


(1)


($/Unit)


Awards(2)Michael K. Robinson


4/20/07
(3)


3,683











4/20/07
(3)






451


$
137.50


$
25,3964/20/07
(4)






5,415


$
137.50


$
304,919Corey Rinker


4/20/07
(3)


933











4/20/07
(4)


1554/20/07
(4)






774


$
137.50


$
43,584Brian P. Crotty


4/20/07
(3)


2,243











4/20/07
(4)


4304/20/07
(4)






2,149


$
137.50


$
121,010Charles C. Hunter


4/20/07
(3)


863











4/20/07
(4)


1554/20/07
(4)






774


$
137.50


$
43,584Terrence J. Anderson


4/20/07
(3)


1,958











4/20/07
(4)


3354/20/07
(4)






1,676


$
137.50


$
94,376Kenneth A. Shulman


4/20/07
(3)


1,203











4/20/07
(4)


2584/20/07
(4)






1,289


$
137.50


$
72,584     (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 amounts shown in this column do not reflect realized
    compensation for the named executive officers; rather, they
    reflect our accounting expense, specifically the fair value of
    stock option awards as of the date of grant calculated in
    accordance with SFAS No. 123(R).(3)
    
    Award was entirely vested upon grant.(4)
    
    Award will vest in equal annual installments at the end of March
    of 2008, 2009 and 2010.  Narrative
    Disclosure Relating to Summary Compensation and Grants of
    Plan-Based Awards Tables
  Chief
    Executive Officer Employment Agreement
     99




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##### Table of Contents



Employment
    Agreements with Other Named Executive Officers
      Management
    Incentive Plan
    OUTSTANDING
    EQUITY AWARDS AT FISCAL YEAR-END
  Option Awards(1)


Stock Awards(1)Number of Units


Number of UnitsUnderlying


Underlying








Number of


Market ValueUnexercised


Unexercised








Units That


of Units ThatOptions


Options


Option





Have Not


Have Not(#)


(#)


Exercise Price


Option


Vested


VestedName

Exerciseable


Unexerciseable(2)


($)


Expiration Date


(#)(2)


($)(3)Michael K. Robinson(1)


451



5,415


$
137.50



3/30/2010







Corey Rinker(1)






774


$
137.50



3/30/2010



155


$
21,313Brian P. Crotty(1)






2,149


$
137.50



3/30/2010



430


$
59,125Charles C. Hunter(1)






774


$
137.50



3/30/2010



155


$
21,313Terrence J. Anderson(1)






1,676


$
137.50



3/30/2010



335


$
46,063Ken A. Shulman(1)






1,289


$
137.50



3/30/2010



258


$
35,475    (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)
    
    Award will vest in equal annual installments at the end of March
    of 2008, 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, 2007, determined in reliance on a valuation
    performed in March 2007. 100




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##### Table of Contents



OPTION
    EXERCISES AND STOCK VESTED DURING FISCAL YEAR
    Stock AwardsNumber of UnitsAcquired on


Value RealizedClass or Series


Vesting


on VestingName

of Stock


(#)(3)


($)Michael K. Robinson



(1)


250


$
163,462(2)


3,183


$
437,663Corey Rinker



(1)


135


$
88,270(2)


618


$
85,030Brian P. Crotty



(1)


225


$
147,116(2)


1,718


$
236,280Charles C. Hunter



(1)


105


$
68,654(2)


618


$
85,030Terrence J. Anderson



(1)






(2)


1,676


$
184,360Ken A. Shulman



(1)






(2)


1,289


$
141,790     (1)
    
    Securities granted under the MIP have been presented as units
    for purposes of this table only. Each unit represents
    1 share of either Series A preferred stock or
    Series B preferred stock and 25 shares of Class A
    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 $653.85 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.(2)
    
    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.  Potential
    Payments Upon Termination Or Change In Control
    101




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##### Table of Contents



Value of TaxCash Severance


Equity Acceleration


Gross-UpName

Event

($)


($)(1)


($)(2)


Total ($)Michael K. Robinson


Voluntary Termination



0



0



0



0Involuntary Termination



700,000



304,919



0



1,004,919Death or Disability



0



0



0



0Change in Control



0



0



0



0Corey Rinker


Voluntary Termination



0



0



0



0Involuntary Termination



260,000



0



0



260,000Death or Disability



0



0



0



0Change in Control



0



0



0



0Brian P. Crotty


Voluntary Termination



0



0



0



0Involuntary Termination



310,000



0



0



310,000Death or Disability



0



0



0



0Change in Control



0



0



0



0Charles C. Hunter


Voluntary Termination



0



0



0



0Involuntary Termination



250,000



0



0



250,000Death or Disability



0



0



0



0Change in Control



0



0



0



0Terrence J. Anderson


Voluntary Termination



0



0



0



0Involuntary Termination



250,000



0



0



250,000Death or Disability



0



0



0



0Change in Control



0



0



0



0Ken A. Shulman


Voluntary Termination



0



0



0



0Involuntary Termination



250,000



0



0



250,000Death or Disability



0



0



0



0Change in Control



0



0



0



0     (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 either Series A preferred
    stock or Series B preferred stock and 25 shares of
    Class A common stock) and multiplying it by $653.85, which
    represents the fair market value of a unit as of
    December 31, 2007, determined in reliance on a valuation
    performed in March 2007.(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
   102




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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
%


10,036,024



68.4
%B. Hagen Saville(2)


4,698,987



50.3
%


10,036,024



68.4
%Samuel G. Rubenstein(2)


4,698,987



50.3
%


10,036,024



68.4
%John S. Patton, Jr(2)


4,698,987



50.3
%


10,036,024



68.4
%David C. Ruberg(3)


1,508,506



16.1
%


3,221,879



29.1
%Robert Manning(3)


1,508,506



16.1
%


3,221,879



29.1
%Peter J. Barris(4)


821,345



8.8
%


1,754,235



17.1
%Michael Robinson(5)


















92,075



28.3
%


158,620



40.5
%Brian Crotty(6)


















56,075



17.3
%


96,602



26.4
%Terrence J. Anderson(7)


















48,950



15.1
%


84,328



23.4
%Kenneth A. Shulman(8)


















30,075



9.3
%


51,811



15.0
%Corey Rinker(9)


















23,325



7.2
%


40,183



11.8
%Charles Hunter(10)


















21,575



6.6
%


37,168



10.9
%Directors and Executive Officers as a Group(11)


7,028,838



75.2
%


15,012,139



86.6
%


272,075



83.8
%


468,711



89.9
%MCG(2)


4,698,987



50.3
%


10,036,024



68.4
%Baker(3)


1,508,506



16.1
%


3,221,879



29.1
%NEA(4)


821,345



8.8
%


1,754,235



17.1
%Com Ventures(12)


360,109



3.9
%


769,123



7.9
%WPG(13)


224,072



2.4
%


478,575



5.0
%Apollo(14)


165,965



1.8
%


354,469



3.7
%Trimaran(15)


128,985



1.4
%


275,487



2.9
%  103




---



##### Table of Contents



(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, 2007. This 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, 2007. 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. Each of Mr. Ruberg and Mr. Manning
    are managers of the general partners of Baker Communications
    Fund, L.P. and Baker Communications Fund II (QP) L.P. By
    virtue of such relationship, each of Mr. Ruberg and
    Mr. Manning may be deemed to beneficially own the shares
    listed as beneficially owned by Baker. Each of Mr. Ruberg
    and 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 28.3% the
    outstanding shares of our Series C Preferred Stock.(6)
    
    Mr. Crotty beneficially owns 2,243 shares of our
    Series C Preferred Stock, which represents 17.3% of the
    outstanding shares of our Series C Preferred Stock.(7)
    
    Mr. Anderson beneficially owns 1,958 shares of our
    Series C Preferred Stock, which represents 15.1% of the
    outstanding shares of our Series C Preferred Stock.(8)
    
    Mr. Shulman beneficially owns 1,203 shares of our
    Series C Preferred Stock, which represents 9.3% of the
    outstanding shares of our Series C Preferred Stock.(9)
    
    Mr. Rinker beneficially owns 933 shares of our
    Series C Preferred Stock, which represents 7.2% of the
    outstanding shares of our Series C Preferred Stock.(10)
    
    Mr. Hunter beneficially owns 863 shares of our
    Series C Preferred Stock, which represents 6.6% 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) 10,833 shares of our
    Series C Preferred Stock, which represents 83.8% of the
    outstanding shares of our Series C Preferred Stock. 104




---



##### Table of Contents



(12)
    
    Com Ventures beneficially owns (i) 10,191 shares of
    our Series B Preferred Stock, which represents 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)
    
    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)
    
    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)
    
    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. 105




---



##### 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
  InfoHighway
    Merger
    Series B-1 Series B-1
  Employment
    Agreements
   106




---



##### Table of Contents



Bridgecom
    Merger and the Transactions
      Series A-1 Series B-1
      Policies
    and Procedures Regarding Transactions with Related
    Persons
  Regulation S-K
  Director
    Independence
  Rule 10A-3
 107




---



##### Table of Contents



Item 14.
    Principal
    Accountant Fees and Services    2006


2007Audit Fees

$
1,652


$
2,304Audit-Related Fees


414



423Tax Fees


95



154Other






Total Fees

$
2,161


$
2,881   Form 10-Q,
 108




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  (a)
    Financial Statements and Schedules  Form 10-K.
                 SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
    BROADVIEW NETWORKS HOLDINGS, INC. AND SUBSIDIARIES  Balance at





OtherBeginning of


Charges to


Accounts


Deductions


Balance atDescription

Period


Expenses


Note(a)


Note(b)


End of Period(Dollars in thousands)Allowance for Uncollectible Accounts Receivable:Year Ended December 31, 2005


908



3,823



8,874



(6,910
)


6,695Year Ended December 31, 2006


6,695



6,384



4,724



(9,832
)


7,971Year Ended December 31, 2007


7,971



6,546



5,380



(9,815
)


10,082Valuation Allowance for Deferred Tax Assets:Year Ended December 31, 2005










(84,642
)(c)






(84,642
)Year Ended December 31, 2006


(84,642
)






83,668
(d)






(974
)Year Ended December 31, 2007


(974
)






(49,221
)(e)






(50,195
)     (a)
    
    Allowance for Uncollectible Accounts Receivable includes $5,481,
    $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, 2005, 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 purchase accounting in relation to the 2005 merger
    and current year activity.(d)
    
    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.(e)
    
    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) 109




---



##### Table of Contents



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)(d)10
.2

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

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

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

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

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

Employment Agreement, dated as of March 3, 2994, by and
    between Bridgecom Holdings, Inc. and Corey Rinker.(a)(d)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) 110




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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

1997 Stock Option Plan.(c)(d)10
.22

2000 Stock Option Plan.(c)(d)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)
    
    Incorporated by reference to Broadview Networks Holdings,
    Inc.s
    Form S-1
    filed on November 30, 2007 (File
    No. 333-147720).(d)
    
    Management contract or compensatory plan or arrangement. 111




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##### Table of Contents



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

Title

Date/s/  Michael
    K. RobinsonMichael
    K. Robinson

President, Chief Executive Officer and Assistant Treasurer
    (Principal Executive Officer)

March 31, 2008/s/  Corey RinkerCorey
    Rinker

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

March 31, 2008/s/  Steven
    F. TunneySteven
    F. Tunney

Director

March 31, 2008/s/  Samuel
    G. RubensteinSamuel
    G. Rubenstein

Director

March 31, 2008/s/  John
    S. Patton, Jr.John
    S. Patton, Jr.

Director

March 31, 2008/s/  B.
    Hagen SavilleB.
    Hagen Saville

Director

March 31, 2008/s/  David C. RubergDavid
    C. Ruberg

Director

March 31, 2008/s/  Robert ManningRobert
    Manning

Director

March 31, 2008/s/  Peter
    J. BarrisPeter
    J. Barris

Director

March 31, 2008/s/  Raul
    MartynekRaul
    Martynek

Director

March 31, 2008  112




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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
   113