##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
 FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2007
 o
    
    TRANSITION REPORT UNDER 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
(State or Other Jurisdiction)
    
    333-133253
(Commission File Number)
    
    87-0700927
(IRS Employer Identification No.)
 
 
  þ o
  o þ
 State the number of shares outstanding of each of the issuers classes of common equity as of the
latest practicable date: As of August 10, 2007, the registrant had 87,900,000 shares of common
stock, par value $.001, outstanding.
 o þ




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##### 



Index
  
 ITEMPART I  FINANCIAL INFORMATIONItem 1. Financial StatementsItem 2. Managements Discussion and Analysis or Plan of OperationItem 3. Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal ProceedingsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 3. Defaults Upon Senior SecuritesItem 4. Submission of Matters to a Vote of Securities HoldersItem 5. Other InformationItem 6. ExhibitsEX-2.1 US VOICE & DATTA,LLC MEMBERSHIP PURCHASE AGREEMENTEX-3.1 AMENDMENT TO ARTICLES OF INCORPORATIONEX-10.1 DYNAMIC DECISION NOTEEX-10.2 DYNAMIC DECISIONS PURCHASE AGREEMENTEX-10.3 VICIS CAPITAL PURCHASE AGREEMENTEX-10.4 VICIS CAPITAL RIGHTS AGREEMENTEX-10.5 VICIS STOCK PURCHASE WARRANTEX-10.6 HILCO CREDIT AGREEMENTEX-10.7 HILCO STOCK PURCHASE WARRANTEX-10.8 MICHAEL P. FISCHER EMPLOYMENT AGREEMENTEX-10.9 M. SCOTT DIAMOND EMPLOYMENT AGREEMENTEX-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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Item 1. Financial Statements
 BROOKSIDE TECHNOLOGY HOLDINGS CORP
CONSOLIDATED BALANCE SHEETS
As of September 30, 2007 and December 31, 2006
 September 30
    
    
    December 31,2007
    
    
    2006(Unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    133,685
    
    
    $
    35,666Accounts receivable, net
    
    
    2,559,479
    
    
    
    333,429Inventory
    
    
    790,699
    
    
    
    39,160Deferred contract costs
    
    
    
    
    
    
    10,883Prepaid expenses
    
    
    38,594
    
    
    
    Deferred Finance Charges
    
    
    333,258
    
    
    
    Total current assets
    
    
    3,855,714
    
    
    
    419,138Property and equipmentOffice equipment
    
    
    261,817
    
    
    
    178,424Vehicles
    
    
    53,780
    
    
    
    Furniture, fixtures and leasehold improvements
    
    
    131,861
    
    
    
    12,960447,458
    
    
    
    191,384Less: accumulated depreciation
    
    
    (161,485
    )
    
    
    (127,976
    )Property and equipment, net
    
    
    285,973
    
    
    
    63,408Goodwill
    
    
    14,075,885
    
    
    
    Non-compete agreement
    
    
    100,000
    
    
    
    Deposits and other assets
    
    
    15,568
    
    
    
    TOTAL ASSETS
    
    $
    18,333,139
    
    
    $
    482,546LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)LiabiltiesCurrent liabilitiesAccounts payable and accrued expenses
    
    $
    959,156
    
    
    $
    368,419Billings in excess of revenues
    
    
    1,708,644
    
    
    
    227,195Accrued payroll liabilities
    
    
    331,093
    
    
    
    37,436Current portion of long term debt
    
    
    3,166,051
    
    
    
    623,863Other current liabilities
    
    
    77,777
    
    
    
    71,633Total current liabilites
    
    
    6,242,722
    
    
    
    1,328,546Long term debt net of debt issuance costs, less current portion
    
    
    2,549,027
    
    
    
    Total liabilities
    
    
    8,791,748
    
    
    
    1,328,546Stockholders deficitSeries A Convertible Preferred Stock, 2,175,322 issued
and outstanding at June 30, 2007 at 8% dividend yield.
Liquidation preference of $2,271,672 at September 30, 2007.
    
    
    1,655,493
    
    
    
    Common stock, $.001 par value, 250,000,000 shares
authorized, 87,900,000 shares issued and outstanding at
September 30, 2007, and 63,000,000 shares issued at and
outstanding at December 31, 2006, respectively
    
    
    87,900
    
    
    
    63,000Additional paid in capital
    
    
    12,467,517
    
    
    
    337,927Retained deficit
    
    
    (4,669,519
    )
    
    
    (1,246,927
    )Total stockholders equity (deficit)
    
    
    9,541,391
    
    
    
    (846,000
    )TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY (DEFICIT)
    
    $
    18,333,139
    
    
    $
    482,546
  4




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BROOKSIDE TECHNOLOGY HOLDINGS CORP
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarter and Nine Months Ended September 30, 2007 and 2006
 Quarter Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)REVENUESInstallation and other services
    
    $
    314,469
    
    
    $
    111,168
    
    
    $
    624,495
    
    
    $
    657,713Equipment sales
    
    
    612,567
    
    
    
    1,012,326
    
    
    
    1,303,980
    
    
    
    2,114,727Total revenues
    
    
    927,036
    
    
    
    1,123,494
    
    
    
    1,928,475
    
    
    
    2,772,440COST OF SALES (excluding depreciation)
    
    
    555,217
    
    
    
    576,446
    
    
    
    1,146,865
    
    
    
    1,869,410GROSS PROFIT
    
    
    371,819
    
    
    
    547,048
    
    
    
    781,610
    
    
    
    903,030OPERATING EXPENSESGeneral and administrative
    
    
    841,130
    
    
    
    303,432
    
    
    
    1,634,398
    
    
    
    812,852Stock based compensation expense
    
    
    
    
    
    
    
    
    
    
    915,000
    
    
    
    Provision for doubtful accounts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,984Depreciation expense
    
    
    15,741
    
    
    
    18,209
    
    
    
    37,317
    
    
    
    41,325Total operating expenses
    
    
    856,871
    
    
    
    321,641
    
    
    
    2,586,715
    
    
    
    857,161OTHER INCOME (EXPENSE)Interest expense
    
    
    (34,838
    )
    
    
    (19,988
    )
    
    
    (61,395
    )
    
    
    (42,895
    )Amortization expense
    
    
    (928,701
    )
    
    
    
    
    
    
    (928,701
    )
    
    
    Other income (expenses), net
    
    
    8,815
    
    
    
    18,113
    
    
    
    10,341
    
    
    
    20,886Total other income (expense)
    
    
    (954,724
    )
    
    
    (1,875
    )
    
    
    (979,755
    )
    
    
    (22,009
    )INCOME (LOSS) BEFORE
INCOME TAXES
    
    
    (1,439,776
    )
    
    
    223,532
    
    
    
    (2,784,859
    )
    
    
    23,860Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NET INCOME (LOSS)
    
    $
    (1,439,776
    )
    
    $
    223,532
    
    
    $
    (2,784,859
    )
    
    $
    23,860Preferred Stock Dividends
    
    
    (43,506
    )
    
    
    
    
    
    
    (96,350
    )
    
    
    Net loss attributable to common shareholders
    
    $
    (1,483,282
    )
    
    $
    223,532
    
    
    $
    (2,881,209
    )
    
    $
    23,860Loss per share-basic and fully diluted
    
    $
    (0.018
    )
    
    $
    0.004
    
    
    $
    (0.037
    )
    
    $
    0.000Weighted average shares outstandings
    
    
    81,327,632
    
    
    
    63,000,000
    
    
    
    77,691,575
    
    
    
    63,000,000
  5




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BROOKSIDE TECHNOLOGY HOLDINGS CORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2007 and 2006
 September 30
    
    
    September 302007
    
    
    2006(Unaudited)
    
    
    (Unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (2,784,859
    )
    
    $
    23,860Adjustments to reconcile net income (loss) to net
cash used in operating activities:Depreciation
    
    
    37,317
    
    
    
    41,325Amortization
    
    
    928,701
    
    
    
    Stock based compensation
    
    
    915,000
    
    
    
    Common stock issued for services
    
    
    
    
    
    
    30,000(Increase) decrease in:Accounts receivable
    
    
    (250,551
    )
    
    
    1,086,194Deferred contract costs
    
    
    10,883
    
    
    
    457,667Inventory
    
    
    1,113,770
    
    
    
    Prepaid expenses
    
    
    (8,278
    )
    
    
    Deposits and other assets
    
    
    23,703
    
    
    
    3,534Increase (decrease) in:Accounts payable and accrued expenses
    
    
    117,737
    
    
    
    (870,280
    )Accrued payroll liabilities
    
    
    236,754
    
    
    
    (2,720
    )Billings in excess of revenues
    
    
    (1,291,783
    )
    
    
    (877,886
    )Accrued warranty
    
    
    (793
    )
    
    
    Other current liabilites
    
    
    (84,293
    )
    
    
    50,4511,748,167
    
    
    
    (81,715
    )NET CASH USED IN OPERATING ACTIVITIES
    
    
    (1,036,693
    )
    
    
    (57,855
    )CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of equipment
    
    
    (56,632
    )
    
    
    (5,406
    )Acquisition of US Voice & Data, LLC (USVD),
net of $855,791 in cash received
    
    
    (9,052,899
    )Deposits and other assets related to possible acquisition
    
    
    
    
    
    
    NET CASH USED IN INVESTING ACTIVITIES
    
    
    (9,109,531
    )
    
    
    (5,406
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from long term debt
    
    
    7,442,685
    
    
    
    97,952Cash paid for fees in connection with USVD acquisition financing
    
    
    (463,000
    )Proceeds from Series B Preferred Stock Financing (Series B)
    
    
    3,000,000Cash paid for fees in connection with Series B financing
    
    
    (250,000
    )Deferred finance charges
    
    
    (349,538
    )
    
    
    (2,103
    )Proceeds from issuance of Series A Convertible Preferred Stock,
net of issuance costs of $376,653
    
    
    1,280,337
    
    
    
    Cash paid for fees in connection with the Exchange Transaction
    
    
    (293,963
    )
    
    
    Repayment of long term debt
    
    
    (122,278
    )
    
    
    (20,706
    )NET CASH PROVIDED BY
FINANCING ACTIVITIES
    
    
    10,244,243
    
    
    
    75,143NET INCREASE IN CASH
    
    
    98,019
    
    
    
    11,882CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
    
    
    35,666
    
    
    
    CASH AND CASH EQUIVALENTSAT END OF YEAR
    
    $
    133,685
    
    
    $
    11,882SUPPLEMENTAL DISCLOSUREIncome taxes paid
    
    $
    
    
    
    $
    Interest paid
    
    $
    (34,838
    )
    
    $
    (16,738
    )Non-cash financing and investing activitiesExchange Transaction fee to Venture Fund II for
consulting fees, paid in preferred stock
    
    $
    250,000
    
    
    $
    Accrual of preferred stock dividend
    
    $
    96,350Payment of notes payable paid in Preferred Stock
    
    $
    235,000
    
    
    $
    Note Payable issued in USVD acquisition
    
    $
    3,000,000
    
    
    $
    Value of Common Stock issued in USVD acquisition
    
    $
    2,730,000
    
    
    $
    Prepaid expense to related party for
consulting fees, paid in common stock
    
    $
    
    
    
    $
    30,000Accrued interest added to note payable balance
    
    $
    46,556
    
    
    $
    Conversion of note for 400,000 shares of common stock
    
    $
    60,000
    
    
    $
    Beneficial conversion feature assigned to convertible debt
    
    $
    1,445,006
    
    
    $
    Warrant value assigned
    
    $
    6,751,270
    
    
    $
    
  6




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BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 1  Nature of Business
 Background/Name
Change/Redomestication
     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.
 7




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BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 1  Nature of Business (continued)
 Acquisition of USVD
   Credit Facility
   8




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BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 1  Nature of Business (continued)
 Warrants Issued in Connection with Financing:
   Operations
     Basis of Presentation
  9




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BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 1  Nature of Business (continued)
  Note 2  Going Concern Uncertainties
   Note 3  Significant Accounting Policies
 Reclassifications
  Earnings Per Common Share
   Quarter Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006NumeratorsNumerator for basic
and diluted earnings
per share:Net loss attributable
to common
shareholders
    
    $
    (1,483,282
    )
    
    $
    223,532
    
    
    $
    (2,881,209
    )
    
    $
    23,860DenominatorsDenominators for basic
earnings per share:
    
    
    81,327,632
    
    
    
    63,000,000
    
    
    
    77,691,575
    
    
    
    63,000,000
 10




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BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 3  Significant Accounting Policies (continued)
  Stock-Based Compensation
  Stock options.
 2007 Stock Incentive Plan
    WeightedAverageOptions
    
    Exercise PriceOutstanding at December 31, 2006
    
    
    
    
    
    $
    Granted
    
    
    14,000,000
    
    
    
    0.186Forfeited or expired
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Outstanding at September 30, 2007
    
    
    14,000,000
    
    
    $
    0.186Vested and exercisable at September 30, 2007
    
    
    10,500,000
    
    
    $
    0.186
 11




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BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 3  Significant Accounting Policies (continued)
  Nine MonthsEndedSeptember 30, 2006Expected life (years)
    
    
    5Interest rate
    
    
    4.7
    %Dividend yield
    
    
    Volatility
    
    
    47
    %Forfeiture rate
    
    
    
  2007 Stock Incentive Plan
  Recently Issued Accounting Pronouncements
  Accounting for Registration Payment
Arrangements Accounting for
Contingencies. Accounting for Contingencies
 12




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BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 3  Significant Accounting Policies (continued)
  Note 4  Trade Accounts Receivable
  Nine Months endedSeptember 30,
    
    
    Year ended(Unaudited)
    
    
    December 31,2007
    
    
    2006Gross trade accounts receivable
    
    $
    2,559,479
    
    
    $
    333,429Less: allowance for doubtful accounts
    
    
    
    
    
    
    $
    2,559,479
    
    
    $
    333,429
 Note 5  Billings in Excess of Revenues
  September 30, 2007
    
    
    December 31,(Unaudited)
    
    
    2006Customer deposits and deferred income
    
    $
    1,708,644
    
    
    $
    227,195
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BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 6  Long Term Debt
  September 30,2007
    
    December 31,(Unaudited)
    
    2006Secured note payable to a bank,
accruing interest at a prime rate
plus 2% with monthly payments of
$2,302. Note was paid in full on
September 26, 2007.
    
    $
    
    
    
    $
    32,011Note payable to an individual,
unsecured, accruing interest at 2%
per annum, with monthly payments of
$5,215 due September 1, 2010.
    
    
    167,896
    
    
    
    176,000Note payable to executive officers
and shareholders, unsecured, accruing
interest at 0% per annum, due in
installments over 3 years with a
maturity date of June 30, 2010, less
737,869 value attributable to
beneficial conversion feature, net of
amortization.
    
    
    2,262,131
    
    
    
    Notes payable to an individual,
unsecured, accruing interest at 7%
per annum, with monthly payments of
$1,130 due May 1, 2011
    
    
    43,730
    
    
    
    50,852Note payable to and shareholder,
unsecured, accruing interest at 0%
per annum, due on demand
    
    
    60,000
    
    
    
    Note payable to executive officer and
shareholders, unsecured, accruing
interest at 7% per annum, with
monthly payments of $1,343, due
September 1, 2009
    
    
    30,000
    
    
    
    30,000Notes payable to shareholder,
unsecured, accruing interest at 7%
per annum, with monthly payments of
$6,432 due June 1, 2010
    
    
    192,566
    
    
    
    275,000Notes payable to Hilco Fnancial, LLC,
secured by all assets of the Company,
accruing interest at 15% per annum,
principal and accrued interest due in
full September 26, 2008. Principal
amount due of $6,127,723, less
finance fees of $335,433 and value
attributed to warrants of $3,813,915,
net of amortization
    
    
    1,978,375
    
    
    
    Series B Preferred Stock issued to
Vicis Capital, unsecured, accruing
interest at 16% per annum. The terms
of the Series B Preferred stock
require the full redemption of the
principal by December 26, 2007.
Principal amount of $3,000,000 less
financing fees of $236,688 and value
attributed to warrants and beneficial
conversion feature of $2,230,556, net
of amortization
    
    
    532,756
    
    
    
    Notes payable to Dynamic Decisions
Strategic Opportunities, unsecured,
accruing interest at 10% per annum,
total principal and accrued interest
due September 26, 2008. Less value
attributed to warrants of $564,573,
net of amortization.
    
    
    435,427
    
    
    
    
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BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 6
 Long Term Debt (continued)
 September 30,2007
    
    
    December 31,(Unaudited)
    
    
2006Secured 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 vehicles.
    
    
    12,196
    
    
    
    Note payable to MAJ Ventures, Ltd.,
unsecured, accruing interest at 10% per
annum. Converted to 400,000 shares of
common stock on September 14, 2007.
    
    
    
    
    
    
    60,000Total long term debt
    
    
    5,715,077
    
    
    
    623,863Less current portion
    
    
    (3,166,051
    )
    
    
    (623,863
    )Long term portion
    
    $
    2,549,027
    
    
    $
    
  Nine Months EndingSeptember 30,2008
    

    $
    3,166,0512009
    

    
    1,858,8422010
    

    
    681,3802011
    

    
    8,804$
    5,715,077
  Note 7  Commitments and Contingencies
 Leases
  October through December 2007
    
    $
    69,8682008
    
    
    304,2122009
    
    
    299,4762010
    
    
    234,0252011
    
    
    110,6652012
    
    
    76,870
  15




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BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 7  Commitments and Contingencies (continued)
 Litigation
  Risk Management
  Note 8  Related Party Transactions
  Note 9  Cost of Sales
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Equipment costs
    
    $
    493,614
    
    
    $
    452,452
    
    
    $
    1,021,798
    
    
    $
    1,324,978Contract labor
    
    
    41,005
    
    
    
    76,980
    
    
    
    85,797
    
    
    
    152,280Direct labor
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    238,202Sales commissions and selling costs
selling costs
    
    
    15,277
    
    
    
    43,443
    
    
    
    22,439
    
    
    
    115,443Other costs
    
    
    5,321
    
    
    
    3,571
    
    
    
    16,831
    
    
    
    38,507$
    555,217
    
    
    $
    576,446
    
    
    $
    1,146,865
    
    
    $
    1,869,410
 Note 10  General and Administrative Expenses
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Employee compensation and benefits
    
    $
    470,361
    
    
    $
    257,199
    
    
    $
    1,062,769
    
    
    $
    608,905Telephone
    
    
    12,755
    
    
    
    8,748
    
    
    
    32,827
    
    
    
    40,376Travel expense
    
    
    76,282
    
    
    
    5,370
    
    
    
    110,291
    
    
    
    32,522Occupancy
    
    
    29,971
    
    
    
    16,082
    
    
    
    42,854
    
    
    
    41,647Professional fees
    
    
    145,515
    
    
    
    453
    
    
    
    232,225
    
    
    
    31,177Other
    
    
    106,246
    
    
    
    15,580
    
    
    
    153,432
    
    
    
    58,225$
    841,130
    
    
    $
    303,432
    
    
    $
    1,634,398
    
    
    $
    812,852
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##### Table of Contents



BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 11  Employee Benefit Plan
   Note 12  Common Stock Purchase Agreement, Exchange Agreement, and Preferred Stock Purchase
Agreement
 Exchange Transactions
  Terms of Convertible Preferred Stock and Warrant Financing
      17




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##### Table of Contents



BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 12  Common Stock Purchase Agreement, Exchange Agreement, and Preferred Stock Purchase
Agreement (continued)
   (i)
    
    a series A warrant to purchase 2,664,767 shares of common stock at
an exercise price of $0.1142857,(ii)
    
    a series B warrant to purchase 2,664,767 shares of common stock at
an exercise price of $0.22857, and(iii)
    
    a series C warrant (the series C warrant) to purchase 5,329,534
shares of common stock at an exercise price of $0.0571428.
    (i)
    
    a series A warrant issued to Mr. Phillips to purchase 320,831 shares
of common stock at an exercise price of $0.1142857,(ii)
    
    a series B warrant issued to Mr. Phillips to purchase 320,831 shares
of common stock at an exercise price of $0.22857,(iii)
    
    a series A warrant issued to Apogee Financial Investments, Inc. to
purchase 320,831 shares of common stock at an exercise price of
$0.1142857 and(iv)
    
    a series B warrant issued to Apogee Financial Investments, Inc. to
purchase 320,831 shares of common stock at an exercise price of
$0.22857.
  (i)
    
    a series A warrant issued to Apogee Financial Investments, Inc. to
purchase 1,181,250 shares of common stock at an exercise price of
$0.1142857; and(ii)
    
    a series B warrant issued to Apogee Financial Investments, Inc. to
purchase 1,181,250 shares of common stock at an exercise price of
$0.22857.
  18




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##### Table of Contents



BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 12  Common Stock Purchase Agreement, Exchange Agreement, and Preferred Stock Purchase
Agreement (continued)
  Note 13  Acquisition of US Voice & Data, LLC
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BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 13  Acquisition of US Voice & Data, LLC (continued)
  (1)
    
    No allocation has been made to intangible assets as of the September 30, 2007.
Management will determine the proper value of intangible assets acquired from USVD, Inc. and
allocate a portion of the goodwill to intangible assets within the next twelve months.
   Purchase price -Cash paid
    
    $
    9,938,690Stock issued
    
    
    2,730,000Notes payable issued to seller
    
    
    3,000,000Legal & Other Acquisition Costs
    
    
    Acquisition costs
    
    
    15,668,690Net fair value of assets acquired and liabilities assumed
    
    
    (1,592,873
    )Goodwill acquired
    
    $
    14,075,817
 Fair value of assets acquired and liabilities assumed -Cash acquired
    
    $
    885,791Accounts receivable
    
    
    1,975,499Inventory 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
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##### Table of Contents



BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 13  Acquisition of US Voice & Data, LLC (continued)
  (Unaudited)
    
    
    (Unaudited)Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Pro forma net
revenues
    
    $
    3,861,696
    
    
    $
    4,132,522
    
    
    $
    13,408,115
    
    
    $
    11,592,853Pro forma net
income (loss)
    
    
    (1,398,801
    )
    
    
    420,022
    
    
    
    (1,726,514
    )
    
    
    629,456Pro forma net
income per share:Diluted
    
    $
    (0.02
    )
    
    $
    0.01
    
    
    $
    (0.02
    )
    
    $
    0.01
  Credit Facility
   21




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##### Table of Contents



BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 13  Acquisition of US Voice & Data, LLC (continued)
 Warrants Issued in Connection with Financing:
 
   Notional balance of Hilco 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
    )Convertible Note balance, net of unamortized discount at September
26, 2007
    
    $
    1,659,773
   Notional balance of Convertible Note at September 30, 2007
    
    $
    6,127,723Adjustments:Unamortized discount
    
    
    (4,149,348
    )Convertible Note balance, net of unamortized discount at
September 30, 2007
    
    $
    1,978,375
  Notional balance of Convertible Note at August 31, 2007
    
    $
    1,000,000Adjustments:Discount for Warrant
    
    
    (696,049
    )Convertible Note balance, net of unamortized discount
at August 31, 2007
    
    $
    303,951
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##### Table of Contents



BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 13  Acquisition of US Voice & Data, LLC (continued)
   Notional balance of Convertible Note at September 30, 2007
    
    $
    1,000,000Adjustments:Unamortized discount
    
    
    (564,573
    )Convertible Note balance, net of unamortized discount at
September 30, 2007
    
    $
    435,427
  Notional balance of Series B Preferred stock
    
    $
    3,000,000Adjustments:Discount for Warrants issued
    
    
    (2,054,995
    )Discount for Beneficial conversion feature
    
    
    (695,005
    )Discount for loan fees paid to Vicis
    
    
    (250,000
    )Convertible Note balance, net of unamortized
discount at September 14, 2007
    
    $
    
   Notional balance of Convertible Note at September 30, 2007
    
    $
    3,000,000Adjustments:Unamortized discount
    
    
    (2,467,244
    )Convertible Note balance, net of unamortized discount at
September 30, 2007
    
    $
    532,756
  Notional balance of USVD Sellers Note
    
    $
    3,000,000Adjustments:Discount for Beneficial conversion feature
    
    
    (750,000
    )Convertible Note balance, net of unamortized
discount at September 14, 2007
    
    $
    2,250,000
   Notional balance of USVD Sellers Note at September 30, 2007
    
    $
    3,000,000Adjustments:Unamortized discount
    
    
    (737,869
    )Convertible Note balance, net of unamortized discount at
September 30, 2007
    
    $
    2,262,131
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##### Table of Contents



BROOKSIDE TECHNOLOGY HOLDINGS CORP.
 Note 13  Acquisition of US Voice & Data, LLC (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
    
    5.00 years
    
    5.00 years
    
    5.00 years
  24




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##### Table of Contents



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, 2006 and 2005 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, 2006, and
elsewhere in this report.
 General
 Background/Name Change/Redomestication
     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.
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Acquisition of USVD
   Credit Facility
   Warrants Issued in Connection with Financing:
   26




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##### Table of Contents



Operations
      Results of Operations
  Three and Nine Months Ended September 30, 2007 compared to Three and Nine Months Ended September
30, 2006.
 Revenues, Cost of Sales and Gross Margins
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General and Administrative Expenses
    October through December 2007
    
    $
    69,8682008
    
    
    304,2122009
    
    
    299,4762010
    
    
    234,0252011
    
    
    110,6652012
    
    
    76,870
 Stock Based Compensation
  28




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##### Table of Contents



Number of Shares
    
    Vesting Date2,100,000
    
    April 19, 20081,400,000
    
    April 19, 2009
  Amortization Expense
  Interest Expense
  Net Profit/Net Loss from Operations
  Liquidity and Capital Resources
   29




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Critical Accounting Policies
  30




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Revenue Recognition
    Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes Accounting for
Income Taxes
  Fair Value Measurements
 Considering the Effects of Prior Year Misstatements in Current Year Financial Statements
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##### Table of Contents



The Fair Value Option for Financial Assets
and Financial Liabilities
 Accounting for Registration Payment
Arrangements Accounting for
Contingencies. Accounting for Contingencies
 
 Item 3. Controls and Procedures
  32




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 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
  
 Item 5. Other Information
  
 Item 6. EXHIBITS
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##### Table of Contents



SIGNATURES
  Brookside Technology Holdings CorpBy:
    /s/ Michael NoleMichael Nole, Chief Executive Officer(Principal Executive Officer) Dated: November 14 , 2007
 34