##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from_________to_________
 Commission File Number 333-133253
 BROOKSIDE TECHNOLOGY HOLDINGS CORP.
  Florida
    
    20-3634227State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization
    
    Identification No.)
 
  þ o
  Large accelerated filer oAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company þ o þ




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##### 



Index
 ITEMPART I  FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsItem 2.
    
    Managements Discussion and Analysis or Plan of Operation
    
    
    24Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    29Item 4.
    
    Controls and ProceduresItem 4(T)
    
    Controls and Procedures
    
    
    29PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    31Item 1A.
    
    Risk Factors
    
    
    31Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    31Item 3.
    
    Defaults Upon Senior Securities
    
    
    31Item 4.
    
    Submission of Matters to a Vote of Securities Holders
    
    
    31Item 5.
    
    Other Information
    
    
    31Item 6.
    
    Exhibits
    
    
    31EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFO
  2




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3




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BROOKSIDE TECHNOLOGY PARTNERS, INC
BALANCE SHEETS
As of June 30, 2008 and December 31, 2007
 June 30, 2008
    
    
    December 31,(Unaudited)
    
    

2007ASSETSCurrent assetsCash and cash equivalents
    
    $
    233,819
    
    
    $
    187,846Accounts receivable, net
    
    
    2,828,224
    
    
    
    2,113,675Inventory
    
    
    1,132,807
    
    
    
    849,176Deferred contract costs
    
    
    90,484
    
    
    
    89,922Deferred finance charges, net of amortization
    
    
    70,865
    
    
    
    245,155Prepaid expenses
    
    
    64,654
    
    
    
    40,954Total current assets
    
    
    4,420,853
    
    
    
    3,526,728Property and equipmentOffice equipment
    
    
    408,579
    
    
    
    330,022Furniture, fixtures and leasehold improvements
    
    
    143,100
    
    
    
    137,745551,679
    
    
    
    467,767Less: accumulated depreciation
    
    
    (260,898
    )
    
    
    (194,089
    )Property and equipment, net
    
    
    290,781
    
    
    
    273,678Goodwill
    
    
    13,236,369
    
    
    
    13,236,369Intangible assets, net
    
    
    195,022
    
    
    
    510,868Deposits and other assets
    
    
    96,117
    
    
    
    41,699TOTAL ASSETS
    
    $
    18,239,142
    
    
    $
    17,589,342LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)LiabilitiesCurrent liabilitiesAccounts payable and accrued expenses
    
    $
    1,736,390
    
    
    $
    981,766Billings in excess of revenues
    
    
    1,986,199
    
    
    
    1,776,271Payroll liabilities
    
    
    391,636
    
    
    
    371,470Current portion of long term debt
    
    
    12,361,135
    
    
    
    8,207,900Other current liabilities
    
    
    723,885
    
    
    
    838,589Total
current liabilities
    
    
    17,199,245
    
    
    
    12,175,996Long term debt, less current portion
    
    
    1,044,607
    
    
    
    1,850,183Total liabilities
    
    
    18,243,852
    
    
    
    14,026,179Stockholders equity (deficit)Series A Convertible Preferred Stock, 1,850,332 and 2,175,322 issued
and outstanding at June 30, 2008 and December 31, 2007,
respectively, at 8% dividend yield. Liquidation preference of
$2,271,672 and $2,315,178 at June 30, 2008 and December 31, 2007,
respectively.
    
    
    1,522,607
    
    
    
    1,699,000Common stock, $.01 par value, 250,000,000 shares
authorized, 93,845,000 and 87,900,000 shares issued and
outstanding at June 30, 2008 and December 31, 2007, respectively
    
    
    93,845
    
    
    
    87,900Additional paid in capital
    
    
    11,683,241
    
    
    
    11,313,358Retained deficit
    
    
    (13,304,403
    )
    
    
    (9,537,095
    )Total stockholders equity (deficit)
    
    
    (4,710
    )
    
    
    3,563,163TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY (DEFICIT)
    
    $
    18,239,142
    
    
    $
    17,589,342
  4




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BROOKSIDE TECHNOLOGY PARTNERS, INC
STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 2008 and 2007
 Quarter Ended June 30,
    
    
    Six Months Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)REVENUESInstallation and other services
    
    $
    1,335,230
    
    
    $
    178,894
    
    
    $
    2,347,539
    
    
    $
    310,026Equipment sales
    
    
    3,198,217
    
    
    
    285,168
    
    
    
    6,393,974
    
    
    
    691,413Total revenues
    
    
    4,533,447
    
    
    
    464,062
    
    
    
    8,741,513
    
    
    
    1,001,439COST OF SALES
    
    
    2,250,924
    
    
    
    239,162
    
    
    
    4,480,805
    
    
    
    591,648GROSS PROFIT
    
    
    2,282,523
    
    
    
    224,900
    
    
    
    4,260,708
    
    
    
    409,791OPERATING EXPENSESGeneral and administrative
    
    
    2,000,996
    
    
    
    493,404
    
    
    
    3,745,486
    
    
    
    793,268Stock Compensation Expense
    
    
    115,500
    
    
    
    915,000
    
    
    
    115,500
    
    
    
    915,000Depreciation expense
    
    
    29,341
    
    
    
    11,091
    
    
    
    66,809
    
    
    
    21,576Total operating expenses
    
    
    2,145,837
    
    
    
    1,419,495
    
    
    
    3,927,795
    
    
    
    1,729,844OTHER INCOME (EXPENSE)Interest expense
    
    
    (664,130
    )
    
    
    (22,406
    )
    
    
    (1,339,583
    )
    
    
    (26,557
    )Amortization expense
    
    
    (1,348,200
    )
    
    
    
    
    
    
    (2,670,524
    )
    
    
    Other income (expenses), net
    
    
    408
    
    
    
    (49
    )
    
    
    3,871
    
    
    
    1,526Total other income (expense)
    
    
    (2,011,922
    )
    
    
    (22,455
    )
    
    
    (4,006,236
    )
    
    
    (25,031
    )LOSS BEFORE
INCOME TAXES
    
    
    (1,875,236
    )
    
    
    (1,217,050
    )
    
    
    (3,673,323
    )
    
    
    (1,345,084
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NET LOSS
    
    $
    (1,875,236
    )
    
    $
    (1,217,050
    )
    
    $
    (3,673,323
    )
    
    $
    (1,345,084
    )Preferred stock dividends
    
    
    (40,430
    )
    
    
    (39,265
    )
    
    
    (83,936
    )
    
    
    (52,844
    )Net loss attributable to common shareholders
    
    $
    (1,915,666
    )
    
    $
    (1,256,315
    )
    
    $
    (3,757,259
    )
    
    $
    (1,397,928
    )Loss per sharebasic and fully diluted
    
    $
    (0.021
    )
    
    $
    (0.016
    )
    
    $
    (0.042
    )
    
    $
    (0.019
    )Weighted average shares outstandings
    
    
    90,714,185
    
    
    
    80,500,000
    
    
    
    89,307,092
    
    
    
    75,472,376
  5




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BROOKSIDE TECHNOLOGY PARTNERS, INC
STATEMENTS OF CASH FLOWS
For the Six Months June 30, 2008 and 2007
 2008
    
    
    2007(Unaudited)
    
    
    (Unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (3,673,323
    )
    
    $
    (1,345,084
    )Adjustments to reconcile net income (loss) to net
cash used in operating activities:Depreciation
    
    
    66,809
    
    
    
    21,576Amortization
    
    
    2,670,524
    
    
    
    Non-cash interest expense
    
    
    518,069
    
    
    
    Stock based compensation
    
    
    115,500
    
    
    
    915,000(Increase) decrease in:Accounts receivable
    
    
    (714,549
    )
    
    
    5,039Inventory
    
    
    (283,631
    )
    
    
    Deferred contract costs
    
    
    (526
    )
    
    
    10,883Prepaid expenses
    
    
    (23,700
    )
    
    
    (19,618
    )Deposits and other assets
    
    
    (54,418
    )
    
    
    (1,500
    )Increase (decrease)in:Accounts payable and accrued expenses
    
    
    754,624
    
    
    
    (107,916
    )Accrued payroll liabilities
    
    
    20,166
    
    
    
    12,454Billings in excess of revenues
    
    
    209,928
    
    
    
    (159,784
    )Other
current liabilities
    
    
    (59,790
    )
    
    
    (38,559
    )3,219,006
    
    
    
    637,575NET CASH USED IN OPERATING ACTIVITIES
    
    
    (454,317
    )
    
    
    (707,509
    )CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of equipment
    
    
    (83,912
    )
    
    
    (35,304
    )Deposits and other assets related to possible acquisition
    
    
    (65,000
    )
    
    
    (276,130
    )NET CASH USED IN INVESTING ACTIVITIES
    
    
    (148,912
    )
    
    
    (311,434
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from long term debt
    
    
    6,958,275
    
    
    
    135,000Proceeds from issuance of series A preferred Stock
net of issuance costs of $376,653
    
    
    
    
    
    
    1,280,337Cash paid for fees in conjunction with the Share Exchange
    
    
    
    
    
    
    (293,963
    )Repayment of long term debt
    
    
    (6,309,073
    )
    
    
    (28,861
    )NET CASH PROVIDED BY
FINANCING ACTIVITIES
    
    
    649,202
    
    
    
    1,092,513NET INCREASE (DECREASE) IN CASH
    
    
    45,973
    
    
    
    73,570CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
    
    
    187,846
    
    
    
    35,666CASH AND
CASH EQUIVALENTS AT END OF YEAR
    
    $
    233,819
    
    
    $
    109,236SUPPLEMENTAL DISCLOSUREIncome taxes paid
    
    $
    (364,690
    )
    
    $
    Interest paid
    
    $
    (17,147
    )
    
    $
    (22,406
    )Non-cash financing and investing activitiesExchange Transaction fee to Venture Fund II for
consulting fees, paid in preferred stock
    
    $
    
    
    
    $
    250,000Accrual of preferred stock dividend
    
    $
    83,936
    
    
    
    52,844Payment of notes payable paid in Preferred Stock
    
    $
    
    
    
    $
    235,000Accrued interest added to note payable balance
    
    $
    503,893
    
    
    $
    46,556Conversion of series A preferred stock to
Common stock
    
    $
    260,328
    
    
    $
    
  6




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Note 1  Basis of Presentation and Nature of Business
 Basis of Presentation
  Operations
     Background/Name Change/Redomestication
    7




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Note 1  Basis of Presentation and Nature of Business (continued)
 Background/Name Change/Redomestication (continued)
  Stock Split
  
    
    Each outstanding share of Cruisestocks common stock, $0.001 per share, was
automatically converted into seven shares of Brookside Technology Holdings Corp.s
common stock, $0.001 par value per share;
    
    Each outstanding share of Cruisestocks series A preferred stock, $0.001 per share,
was automatically converted into one share of Brookside Technology Holdings Corp.s
series A preferred stock, $0.001 par value per share;
    
    The price at which the series A preferred stock converts into common stock was
automatically adjusted, on a proportionate basis, to account for the forward split of
the common shares by reducing the current conversion price of $0.40 per share to
$0.0571428; and
    
    The number of shares of common stock underlying all of Cruisestocks outstanding
options and warrants to purchase common stock, and the exercise price of such options
and warrants, was automatically adjusted to account for the 7-for-1 common share stock
split.
 Acquisition of USVD
  Vicis Equity Infusion
     8




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Note 2  Going Concern Uncertainties
   Note 3  Significant Accounting Policies
  Cash Equivalents
  Use of Estimates
  Property and Equipment
  Classification
    
    Useful LivesTelecom equipment
    
    3-5 yearsSoftware
    
    3-5 yearsComputer equipment
    
    3-5 yearsFurniture, fixtures and leasehold improvements
    
    2-7 years
   9




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Note 3  Significant Accounting Policies (continued)
 Financial Instruments and Credit Risk
    Inventories
  Classification of Series B Preferred Stock as a Liability
  Revenue Recognition
   10




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Note 3  Significant Accounting Policies (continued)
   Warranty Reserves
  Advertising
  Reclassifications
  11




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Note 3  Significant Accounting Policies (continued)
 Earnings Per Common Share
   Recent Accounting Pronouncements
 Determination of the Useful Life of Intangible Assets
   
    
    The weighted-average period prior to the next renewal or extension
(whether explicit and implicit) for each major intangible asset class
    
    The entitys accounting policy for the treatment of costs incurred to
renew or extend the term of a recognized intangible asset
    
    For intangible asset renewed or extended during the period:
 
    
    For entities that capitalize renewal or extension costs, the costs
incurred to review or extend the asset, for each major intangible
asset class
    
    The weighted-average period prior to the next renewal or extension
(whether explicit and implicit) for each major intangible asset class
 12




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Note 3  Significant Accounting Policies (continued)
  Fair Value Measurements
       Note 4 Billings in Excess of Revenues
  Year EndedJune 30,
    
    
    December 31,2008
    
    
    2007Customer deposits and deferred income on installation contracts
    
    $
    833,714
    
    
    $
    718,574Deferred revenue on maintenance contracts
    
    
    1,152,485
    
    
    
    1,057,697$
    1,986,199
    
    
    $
    1,776,271
 13




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Note 5 Long Term Debt
  June 30
    
    
    December 31,2008
    
    
    2007Note payable to an individual,
unsecured, accruing interest at 2% per
annum, with monthly payments of $5,215
due September 1, 2010.
    
    
    123,182
    
    
    
    153,066Note payable to executive officers and
shareholders, unsecured, accruing
interest at 0% per annum, due in
installments over 3 years with a
maturity date of September 26, 2009,
less unamortized discount of $179,590.
    
    
    2,920,410
    
    
    
    2,816,632Notes payable to an individual,
unsecured, accruing interest at 7% per
annum, with monthly payments of $1,130
due May 1, 2011.
    
    
    35,668
    
    
    
    40,361Note payable to executive officer and
shareholders, unsecured, accruing
interest at 7% per annum, with monthly
payments of $1,343, due September 1,
2009.
    
    
    23,318
    
    
    
    28,558Notes payable to shareholder,
unsecured, accruing interest at 7% per
annum, with monthly payments of $6,432
due June 1, 2010.
    
    
    143,658
    
    
    
    176,547Note payable to Vicis, secured by all
assets of the Company, accruing
interest at 10% per annum, principal
and accrued interest due in full
September 26, 2009. Principal amount
due of $7,088,301, less unamortized
discount of $926,437. Formerly
payable to Hilco Financial, LLC. Note
was assigned to Vicis on June 18,
2008.
    
    
    6,161,864
    
    
    
    3,235,930Series B Preferred Stock issued to
Vicis Capital, unsecured, accruing
interest at 16% per annum, matured on
December 27, 2007, converted to series
A preferred stock on July 3, 2008 and
now accruing interest at 8%.
    
    
    3,000,000
    
    
    
    3,000,000Note payable to Dynamic Decisions
Strategic Opportunities, unsecured,
accruing interest at 10% per annum,
total principal and accrued interest
due September 26, 2008. Less
unamortized discount of $43,632. Note
was subsequently assigned to Vicis on
July 3, 2008.
    
    
    956,368
    
    
    
    596,323Secured notes payable to Huntington
Bank, accruing interest at a prime
rate plus 3.73% with monthly payments
of $383, with a maturity date of March
28, 2009. Note is secured by a
vehicle.
    
    
    10,478
    
    
    
    10,666Secured notes payable to NEC Financial
Services, accruing interest at 11.25%
with monthly payments of $1,128, with
a maturity date of February 25, 2011.
Note is secured by testing equipment.
    
    
    30,796
    
    
    
    Total long term debt
    
    
    13,405,742
    
    
    
    10,058,083Less current portion
    
    
    (12,361,135
    )
    
    
    (8,207,900
    )Long term portion
    
    $
    1,044,607
    
    
    $
    1,850,183
  Years Ending December 31,,
    
    Gross
    
    Net of Discount2008
    
    $
    12,705,217
    
    
    $
    11,555,5592009
    
    
    912,303
    
    
    
    912,3032010
    
    
    933,427
    
    
    
    933,4272011
    
    
    4,453
    
    
    
    4,453$
    14,555,400
    
    
    $
    13,405,742
 .
 14




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Note 6  Commitments and Contingencies
 Leases
  2008
    
    $
    151,6172009
    
    
    297,9762010
    
    
    232,5252011
    
    
    109,1652012
    
    
    76,870
  Liquidated Damages Under Registration Payment Arrangements
  Litigation
  Risk Management
  Note 7   Related Party Transactions
  Note 8  Cost of Sales
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Equipment costs
    
    $
    1,854,207
    
    
    $
    212,631
    
    
    $
    3,714,853
    
    
    $
    528,184Contract labor
    
    
    36,210
    
    
    
    19,493
    
    
    
    114,421
    
    
    
    44,792Direct labor
    
    
    257,677
    
    
    
    
    
    
    
    488,885
    
    
    
    Sales commissions and selling costs
    
    
    22,666
    
    
    
    5,241
    
    
    
    26,101
    
    
    
    7,162Other costs
    
    
    79,763
    
    
    
    1,797
    
    
    
    136,545
    
    
    
    11,510$
    2,250,523
    
    
    $
    239,162
    
    
    $
    4,480,805
    
    
    $
    591,648
 15




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Note 10  General and Administrative Expenses
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Employee
compensation and
benefits
    
    $
    827,435
    
    
    $
    358,926
    
    
    $
    1,603,787
    
    
    $
    592,408Bad Debt Expense
    
    
    60
    
    
    
    
    
    
    
    736
    
    
    
    Telephone
    
    
    42,563
    
    
    
    11,550
    
    
    
    85,526
    
    
    
    20,071Travel expense
    
    
    42,396
    
    
    
    23,767
    
    
    
    68,466
    
    
    
    34,009Occupancy
    
    
    108,342
    
    
    
    7,952
    
    
    
    216,193
    
    
    
    12,883Professional fees
    
    
    267,174
    
    
    
    68,963
    
    
    
    405,990
    
    
    
    86,710Other
    
    
    713,026
    
    
    
    22,246
    
    
    
    1,364,788
    
    
    
    47,187$
    2,000,996
    
    
    $
    493,404
    
    
    $
    3,745,486
    
    
    $
    793,268
 Note 10  Employee Benefit Plan
   Note 11  Acquisition of US Voice & Data, LLC
   16




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Note 11  Acquisition of US Voice & Data, LLC (continued)
     (1)
    
    An initial allocation has been made to intangible assets as of September 30, 2007.
Management will determine the proper value of intangible assets acquired from USVD and
allocate any additional adjustments of the goodwill to intangible assets within the twelve
months after the acquisition date.
  Purchase price Cash paid
    
    $
    9,938,690Stock issued
    
    
    2,345,000Notes payable issued to seller, net of discount
    
    
    2,747,934Additional amount due to seller
    
    
    356,160Legal & other acquisition costs
    
    
    41,458Acquisition costs
    
    
    15,429,242Net fair value of assets acquired and liabilities assumed
    
    
    (1,592,873
    )Excess of cost over fair value of tangible assets acquired
    
    $
    13,836,369Value assigned to customer contracts acquired
    
    
    600,000Goodwill acquired
    
    $
    13,236,369Fair value of assets acquired and liabilities assumed Cash acquired
    
    $
    885,859Accounts receivable
    
    
    1,975,430Inventory and work in progress
    
    
    1,865,309Property and equipment
    
    
    203,249Other assets
    
    
    69,587Accounts payable and accrued expenses
    
    
    (529,903
    )Customer deposits and deferred income
    
    
    (2,773,232
    )Other liabilities
    
    
    (103,426
    )Net fair value of assets acquired and liabilities assumed
    
    $
    1,592,873
 17




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##### Table of Contents



Note 11  Acquisition of US Voice & Data, LLC (continued)
  2008
    
    $
    136,6892009
    
    
    33,3332010
    
    
    25,000Total
    
    $
    195,027
  (Unaudited)
    
    
    (Unaudited)Three Months Ended
    
    
    Six Months EndedJune 30, 2007
    
    
    June 30, 2007Pro forma net revenues
    
    $
    4,539,042
    
    
    $
    9,546,419Pro forma net income (loss)
    
    
    (525,360
    )
    
    
    (325,917
    )Pro forma net income per
share:Diluted
    
    $
    (0.01
    )
    
    $
    (0.00
    )
  Credit Facility
  18




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Note 11  Acquisition of US Voice & Data, LLC (continued)
   Warrants Issued in Connection with Financing:
    Notional balance of Hilco Senior Convertible Note
    
    $
    6,000,000Adjustments:Discount for warrant issued (based on relative fair value assigned)
    
    
    (4,000,227
    )Discount for loan fees paid to Hilco on Note
    
    
    (340,000
    )Hilco Senior Convertible Note balance, net of unamortized discount at
September 26, 2007
    
    $
    1,659,773
   Notional balance of Hilco Senior Convertible Note at June 30, 2008
    
    $
    7,088,301Adjustments:Unamortized discount
    
    
    (926,437
    )Hilco Senior Convertible Note balance, net of unamortized discount at June 30, 2008
    
    $
    6,161,864
  Notional balance of DD Subordinated Convertible Note at August 31, 2007
    
    $
    1,000,000Adjustments:Discount for warrant (based on relative fair value assigned)
    
    
    (696,049
    )DD Subordinated Convertible Note balance, net of unamortized discount
at August 31, 2007
    
    $
    303,951
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Note 11  Acquisition of US Voice & Data, LLC (continued)
 Credit Facility (continued)
   Notional balance of DD Subordinated Convertible Note at June 30, 2008
    
    $
    1,000,000Adjustments:Unamortized discount
    
    
    (43,632
    )DD Subordinated Convertible Note balance, net of unamortized discount at June 30, 2008
    
    $
    956,368
  Notional balance of Series B Preferred stock
    
    $
    3,000,000Adjustments:Discount for warrants issued (based on relative fair value assigned)
    
    
    (2,054,995
    )Discount for beneficial conversion feature (based on relative fair value assigned)
    
    
    (695,005
    )Discount for loan fees paid to Vicis
    
    
    (250,000
    )Series B Preferred Stock balance, net of unamortized discount at September 14, 2007
    
    $
    
   Notional balance of Series B Preferred Stock at June 30, 2008
    
    $
    3,000,000Adjustments:Unamortized discount
    
    
    Series B Preferred Stock balance, net of unamortized discount at June 30, 2008
    
    $
    3,000,000
  Notional balance of USVD Sellers Note
    
    $
    3,100,000Adjustments:Discount for imputed interest
    
    
    (352,066
    )USVD Sellers Note balance, net of unamortized discount at September 14, 2007
    
    $
    2,747,934
   Notional balance of USVD Sellers Note at June 30, 2008
    
    $
    3,100,000Adjustments:Unamortized discount
    
    
    (179,590
    )USVD Sellers Note balance, net of unamortized discount at June 30, 2008
    
    $
    2,920,410
   20




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##### Table of Contents



Note 11  Acquisition of US Voice & Data, LLC (continued)
 Credit Facility (continued)
  Hilco Note
    
    DD Sub Debt
    
    Series BAssumptions
    
    Warrant
    
    Warrant
    
    WarrantDividend yield
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %Risk-free interest rate
    
    
    4.21
    %
    
    
    4.21
    %
    
    
    4.21
    %Volatility
    
    
    61.55
    %
    
    
    61.55
    %
    
    
    61.55
    %Expected Term
    
    5 years
    
    5 years
    
    5 years
 Note 12  Stock-Based Compensation
  Stock options.
 2007 Stock Incentive Plan
    WeightedAverageOptions
    
    Exercise PriceOutstanding at December 31, 2007
    
    
    14,000,000
    
    
    $
    0.186Granted
    
    
    1,200,000
    
    
    $
    0.050Forfeited or expired
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Outstanding at June 30, 2008
    
    
    15,200,000
    
    
    $
    0.175Vested and exercisable at June 30, 2008
    
    
    12,600,000
    
    
    $
    0.186
   21




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Note 13  Subsequent Events
 Vicis Equity Infusion
     .
 STN Acquisition
    22




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Note 13  Subsequent Events (continued)
  23




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Item 2.
    
    Managements Discussion and Analysis or Plan of Operations
 The information presented in this section should be read in conjunction with our audited financial
statements and related notes for the periods ended December 31, 2007 and 2006 included in our Form
10-KSB, as filed with the Securities and Exchange Commission, as well as the information contained
in the financial statements, including the notes thereto, appearing in this report. This
discussion contains forward-looking statements reflecting our current expectations that involve
risks and uncertainties. Actual results and the timing of events may differ materially from those
contained in these forward-looking statements due to a number of factors, including those discussed
in the section entitled Risk Factors of our Form 10-KSB for the year ended December 31, 2007, and
elsewhere in this report.
 General
 Organizational History
   Stock Split
  
    
    Each outstanding share of Cruisestocks common stock, $0.001 per share, was
automatically converted into seven shares of Brookside Technology Holdings Corp.s
common stock, $0.001 par value per share;
    
    Each outstanding share of Cruisestocks series A preferred stock, $0.001 per share,
was automatically converted into one share of Brookside Technology Holdings Corp.s
series A preferred stock, $0.001 par value per share;
    
    The price at which the series A preferred stock converts into common stock was
automatically adjusted, on a proportionate basis, to account for the forward split of
the common shares by reducing the current conversion price of $0.40 per share to
$0.0571428, which was subsequently automatically adjusted down to $0.03 in conjunction
with the Vicis Equity Infusion; and
    
    The number of shares of common stock underlying all of Cruisestocks outstanding
options and warrants to purchase common stock, and the exercise price of such options
and warrants, was automatically adjusted to account for the 7-for-1 common share stock
split.
   24




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Vicis Equity Infusion
     .
 Overview of Business
    25




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Results of Operations
  Three and Six Months Ended June 30, 2008 compared to Three and Six months Ended June 30, 2007.
 Revenues, Cost of Sales and Gross Margins
    26




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General and Administrative Expenses
    Stock Compensation Expense
   27




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Amortization Expense
  Interest Expense
  Net Profit/Net Loss from Operations
  Liquidity and Capital Resources
  .
  Critical Accounting Policies
  28




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Revenue Recognition
    
 Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4T.
    
    Controls and Procedures
 Disclosure Controls and Procedures
  29




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Changes in Internal Control Over Financial Reporting
  30




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PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders {{ Renumber items per 10-Q}}
  
 Item 5.
    
    Other Information
  
 Item 6.
    
    EXHIBITS
     31




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SIGNATURES
  Brookside Technology Holdings CorpBy:
    /s/ Michael NoleMichael Nole, Chief Executive Officer(Principal Executive Officer) Dated: August 14, 2008
 32