**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      DC 20549**




**FORM
      10-Q**





(Mark
      One)





**x
      QUARTERLY REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**





**For
      the quarterly period ended March 31, 2007**





**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 0-28579**




**BERLINER
      COMMUNICATIONS, INC.**


(Exact
      Name of Registrant as Specified in Its Charter)




**Delaware**
              **75-2233445**(State
                  or Other Jurisdiction of Incorporation)
              (I.R.S.
                  Employer Identification No.)





**20
      Bushes Lane**


**Elmwood
      Park, New Jersey 07407**


(Address
      of Principal Executive Offices)





**(201)
      791-3200**


(Registrant’s
      Telephone Number, Including Area Code)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes x No o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer o  Accelerated filer o  Non-accelerated filer x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Act).


Yes
o
      No x





Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date:





On
      May 9,
      2007, 17,035,357 shares of the registrant's common stock, $0.00002 par value
      per
      share, were outstanding.








**BERLINER
      COMMUNICATIONS, INC.**





**QUARTERLY
      REPORT ON FORM 10-Q**


**INDEX**


PAGE
                  NO.PART
                  I:
              
              FINANCIAL
                  INFORMATIONItem
                  1.
              
              Financial
                  StatementsConsolidated
                  Balance Sheets as of March 31, 2007 (unaudited), and June 30,
                  2006
              
              3Consolidated
                  Statements of Operations for the three and nine months ended March
                  31,
                  2007, and 2006 (unaudited)
              
              4Consolidated
                  Statements of Cash Flows for the nine months ended March 31, 2007,
                  and
                  2006 (unaudited)
              
              5Consolidated
                  Statements of Stockholders’ Equity for the nine months ended March 31,
                  2007 (unaudited)
              
              6Notes
                  to Consolidated Financial Statements
              
              7Item
                  2.
              
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              
              17Item
                  3.
              
              Quantitative
                  and Qualitative Disclosures About Market Risk
              
              22Item
                  4.
              
              Controls
                  and Procedures
              
              23PART
                  II:
              
              OTHER
                  INFORMATIONItem
                  1.
              
              Legal
                  Proceedings
              
              23Item
                  1A.
              
              Risk
                  Factors
              
              23Item
                  2.
              
              Unregistered
                  Sale of Equity Securities and Use of Proceeds
              
              29Item
                  3.
              
              Defaults
                  Upon Senior Securities
              
              29Item
                  4.
              
              Submission
                  of Matters to a Vote of Securities Holders
              
              29Item
                  5.
              
              Other
                  Information
              
              29Item
                  6.
              
              Exhibits
              
              29SIGNATURES
              
              30





2


**BERLINER
      COMMUNICATIONS, INC.**


**CONSOLIDATED
      BALANCE SHEETS**


March
                  31,
              
              June
                  30,2007
              
              2006(Unaudited)ASSETS(In
                  Thousands)CURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              2,214
              
              $
              534Accounts
                  receivable, net of allowance for doubtfulaccounts
                  of $211 at March 31, 2007 and$179
                  at June 30, 2006
              
              
              15,282
              
              
              12,334Inventories
              
              
              758
              
              
              322Prepaid
                  expenses and other current assets
              
              
              458
              
              
              33218,712
              
              
              13,522LONG-TERM
                  ASSETSProperty
                  and equipment, net
              
              
              1,486
              
              
              566Debt
                  issuances costs, net
              
              
              722
              
              
              -Goodwill
              
              
              2,907
              
              
              -Other
                  assets
              
              
              124
              
              
              168$
              23,951
              
              $
              14,256LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIESLine
                  of credit
              
              $
              -
              
              $
              1,111Current
                  portion of long-term debt
              
              
              57
              
              
              374Current
                  portion of capital lease obligations
              
              
              24
              
              
              33Accounts
                  payable
              
              
              4,043
              
              
              5,356Accrued
                  liabilities
              
              
              6,589
              
              
              3,909Accrued
                  income taxes
              
              
              356
              
              
              12811,069
              
              
              10,911LONG-TERM
                  LIABILITIESLong-term
                  debt, net of debt discount and current portion
              
              
              6,214
              
              
              163Long-term
                  capital lease obligations, net of current portion
              
              
              22
              
              
              246,236
              
              
              187COMMITMENTS
                  AND CONTINGENCIES
              
              
              -
              
              
              -STOCKHOLDERS'
                  EQUITYPreferred
                  stock
              
              
              -
              
              
              -Common
                  stock
              
              
              -
              
              
              -Additional
                  paid-in capital
              
              
              15,554
              
              
              13,018Accumulated
                  deficit
              
              
              (8,908
              )
              
              (9,860
              )6,646
              
              
              3,158$
              23,951
              
              $
              14,256


*The
      accompanying notes are an integral part of these financial
      statements.*


3


**BERLINER
      COMMUNICATIONS, INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


Three
                  months ended
              
              Nine
                  months endedMarch
                  31,
              
              March
                  31,2007
              
              2006
              
              2007
              
              2006(Unaudited)
              
              (Unaudited)
              
              (Unaudited)
              
              (Unaudited)(In
                  Thousands: except share and per share data)Revenue
              
              $
              15,394
              
              $
              8,547
              
              $
              36,887
              
              $
              28,312Cost
                  of revenue
              
              
              11,222
              
              
              6,483
              
              
              25,597
              
              
              21,289Gross
                  margin
              
              
              4,172
              
              
              2,064
              
              
              11,290
              
              
              7,023Selling,
                  general and administrative expenses
              
              
              2,977
              
              
              2,362
              
              
              8,841
              
              
              6,647Depreciation
                  and amortization
              
              
              68
              
              
              62
              
              
              188
              
              
              187(Gain)
                  on sale of fixed assets
              
              
              (7
              )
              
              (4
              )
              
              (5
              )
              
              (5
              )Income
                  (loss) from operations
              
              
              1,134
              
              
              (356
              )
              
              2,266
              
              
              194Other
                  (income) expenseInterest
                  expense
              
              
              400
              
              
              15
              
              
              454
              
              
              41Interest
                  income
              
              
              (20
              )
              
              (4
              )
              
              (28
              )
              
              (10
              )Gain
                  on sale of equity of investment, net of losses
              
              
              (4
              )
              
              -
              
              
              (4
              )
              
              (98
              )Other
              
              
              (14
              )
              
              (4
              )
              
              (28
              )
              
              (90
              )Income
                  (loss) before income taxes
              
              
              772
              
              
              (363
              )
              
              1,872
              
              
              351Income
                  tax expense
              
              
              411
              
              
              2
              
              
              920
              
              
              6Net
                  income (loss)
              
              $
              361
              
              $
              (365
              )
              $
              952
              
              $
              345Deemed
                  Series B and D preferred dividends
              
              
              -
              
              
              -
              
              
              -
              
              
              19,936Net
                  income (loss) allocable to common shareholders
              
              $
              361
              
              $
              (365
              )
              $
              952
              
              $
              (19,591
              )Net
                  income (loss) per share - basic and dilutedBasic
              
              $
              0.02
              
              $
              (0.02
              )
              $
              0.06
              
              $
              (1.58
              )Diluted
              
              $
              0.02
              
              $
              (0.02
              )
              $
              0.05
              
              $
              (1.58
              )Weighted
                  average number of shares outstandingBasic
              
              
              17,035,357
              
              
              17,034,857
              
              
              17,035,357
              
              
              12,375,299Diluted
              
              
              19,926,795
              
              
              17,034,857
              
              
              17,673,363
              
              
              12,375,299





*The
      accompanying notes are an integral part of these financial
      statements.*


4


**BERLINER
      COMMUNICATIONS, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS** ****


Nine
                  months endedMarch
                  31,2007
              
              2006(Unaudited)
              
              (Unaudited)(In
                  Thousands)Cash
                  flows from operating activitiesNet
                  income
              
              $
              952
              
              $
              345Adjustments
                  to reconcile net incometo
                  net cash provided by (used in) operationsDepreciation
                  and amortization
              
              
              278
              
              
              186Loss
                  in equity of investments
              
              
              -
              
              
              102Bad
                  debt expense
              
              
              90
              
              
              74Stock
                  based compensation
              
              
              199
              
              
              23Accretion
                  of debt discount associated with warrants
              
              
              213
              
              
              -Loss
                  (gain) on the sale of equity investment
              
              
              -
              
              
              (205
              )Changes
                  in operating assets and liabilitiesAccounts
                  receivable
              
              
              (3,038
              )
              
              (3,797
              )Inventories
              
              
              (87
              )
              
              110Prepaid
                  expenses and other current assets
              
              
              (126
              )
              
              5Other
                  assets
              
              
              44
              
              
              170Accounts
                  payable
              
              
              (1,313
              )
              
              1,458Accrued
                  liabilities
              
              
              2,680
              
              
              2,011Income
                  taxes payable
              
              
              228
              
              
              -Net
                  cash provided by operatingactivities
              
              
              120
              
              
              482Cash
                  flow from investing activitiesPurchase
                  of property and equipment
              
              
              (254
              )
              
              (190
              )Acquisition
                  of Digitcom
              
              
              (2,000
              )
              
              -Acquisition
                  of Comtech
              
              
              (98
              )
              
              -Proceeds
                  from the sale of property and equipment
              
              
              -
              
              
              16Proceeds
                  from the sale of equity investment
              
              
              -
              
              
              200Net
                  cash (used in) provided by investing activities
              
              
              (2,352
              )
              
              26Cash
                  flows from financing activitiesProceeds
                  from line of credit
              
              
              3,923
              
              
              3,021Proceeds
                  from long-term debt
              
              
              6,000
              
              
              97Repayment
                  of line of credit
              
              
              (5,034
              )
              
              (3,093
              )Repayment
                  of long-term debt
              
              
              (368
              )
              
              (246
              )Repayment
                  of capital leases
              
              
              (11
              )
              
              (42
              )Debt
                  issuance costs
              
              
              (598
              )
              
              -Net
                  cash provided by (used in) financing activities
              
              
              3,912
              
              
              (263
              )Net
                  increase in cash and cash equivalents
              
              
              1,680
              
              
              245Cash
                  and cash equivalents at beginning of period
              
              
              534
              
              
              402Cash
                  and cash equivalents at end of period
              
              $
              2,214
              
              $
              647Supplemental
                  disclosure of cash flow informationInterest
                  paid
              
              $
              150
              
              $
              38Income
                  taxes paid
              
              $
              564
              
              $
              5Non-cash
                  investing and financing activitiesAssets
                  acquired under capital leases
              
              $
              20
              
              $
              61Fair
                  value of warrants associated with debtissuances
                  and professional services
              
              $
              2,337
              
              $
              -Note
                  payable issued in connection with the acquisition of
                  Digitcom
              
              $
              1,750
              
              $
              -Purchase
                  of vehicles financed with notes payable
              
              $
              21
              
              $
              -
  The
        accompanying notes are an integral part of these
        financial statements.
  5




**BERLINER
      COMMUNICATIONS, INC.**


**CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ EQUITY**


Preferred
                  Stock
              
              Common
                  Stock2,000,000
                  shares
                authorized;
                $0.00002
                parvalue
              
              100,000,000shares
                authorized
                $0.00002
                parvalueShares
              
              Amount
              
              Shares
              
              Amount
              
              
              Additional
                  Paid-in Capital
              
              
              Accumulated
                  Deficit
              
              
              Total
                  Stockholders' Equity(In
                  Thousands except share data)
              
              
              (Unaudited)
              
              
              (Unaudited)
              
              
              (Unaudited)
              
              
              (Unaudited)
              
              
              (Unaudited)Balance
                  at June 30, 2006
              
              
              -
              
              $
              -
              
              
              17,034,857
              
              $
              -
              
              $
              13,018
              
              $
              (9,860
              )
              $
              3,158Exercise
                  of stock options
              
              
              
              
              
              
              
              
              500
              
              
              -
              
              
              -
              
              
              
              
              
              -Stock
                  based compensation expense
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              199
              
              
              
              
              
              199Value
                  of warrants granted with debt
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              2,337
              
              
              
              
              
              2,337Net
                  income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              952
              
              
              952Balance
                  at March 31, 2007
              
              
              -
              
              $
              -
              
              
              17,035,357
              
              $
              -
              
              $
              15,554
              
              $
              (8,908
              )
              $
              6,646





*The
      accompanying notes are an integral part of these financial
      statements.*





6




**BERLINER
        COMMUNICATIONS, INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  **1.**  **History
        and Description of Business**
 
 Berliner
        Communications, Inc. was originally incorporated in Delaware in 1987 as Adina,
        Inc. (“Adina”). Adina’s corporate existence was permitted to lapse in February
        of 1996 and was subsequently reinstated as eVentures Group, Inc., (“eVentures”)
        in August of 1999. In December of 2000, eVentures changed its name to Novo
        Networks, Inc. (“Novo”).
  On
        February 18, 2005, Novo entered into an asset purchase agreement with the
        former Berliner Communications, Inc. (“Old Berliner”) and BCI Communications,
        Inc. (“BCI”), a Delaware corporation and Novo’s wholly-owned subsidiary, whereby
        BCI acquired (the “Acquisition”) the operations and substantially all of the
        assets (the “Berliner Assets”) and liabilities of Old Berliner. On September 16,
        2005, Novo changed its name to Berliner Communications, Inc. (“Berliner”).
  Founded
        in 1995, Old Berliner originally provided wireless carriers with comprehensive
        real estate site acquisition and zoning services. Over the course of the
        following 10 years, the service offerings were expanded to include radio
        frequency and network design and engineering, infrastructure equipment
        construction and installation, radio transmission base station modification
        and
        project management services. With the consummation of the Acquisition, BCI
        carries on the historical operations of Old Berliner. Unless otherwise specified
        or otherwise clear from the context, each reference to we, us, or BCI in
        this
        Quarterly Report will be deemed to be a reference to both Berliner and
        BCI.
 On
          February 28, 2007, BCI entered into an asset purchase agreement with Digital
          Communication Services, Inc., J&J Leasing Partnership and the shareholders
          at Digitcom for the purchase of certain assets, excluding cash and receivables,
          of Digitcom and property of J&J. On February 19, 2007, we acquired
          substantially all of the assets of Comtech Systems, Inc. The results of
          these
          acquired businesses have been incorporated into our consolidated financial
          statements since the date of acquisition.
 **2.**  **Basis
        of Presentation**
 
 The
        accompanying consolidated financial statements as of March 31, 2007, and
        for the
        three and nine months ended March 31, 2007, and 2006, respectively, have
        been
        prepared by us, without audit, pursuant to the interim financial statements
        rules and regulations of the United States Securities and Exchange Commission
        (“SEC”). In our opinion, the accompanying consolidated financial statements
        include all adjustments necessary to present fairly the results of our
        operations and cash flows at the dates and for the periods indicated. The
        results of operations for the interim periods are not necessarily indicative
        of
        the results for the full fiscal year. The accompanying consolidated financial
        statements should be read in conjunction with the audited consolidated financial
        statements included in our Annual Report on Form 10-K for the fiscal year
        ended
        June 30, 2006.
 On
          February 28, 2007, BCI entered into an asset purchase agreement with Digital
          Communication Services. Inc., J&J Leasing Partnership and the shareholders
          at Digitcom for the purchase of certain assets, excluding cash and receivables,
          of Digitcom and property at J&J. On February 19, 2007, we acquired
          substantially all of the assets of Comtech Systems, Inc. The results of
          these
          acquired businesses have been incorporated into our consolidated financial
          statements since the date of acquisition.
  **3.**  **Accounting
        Policies**
  *Use
        of Estimates.* The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires us to make estimates
        and assumptions that affect the reported amounts of assets and liabilities
        and
        disclosures of contingent assets and liabilities at the date of the financial
        statements and the reported amounts of revenue and expenses during the reporting
        period. Some of the more significant estimates we make include the allowance
        for
        doubtful accounts and percentage of completion of construction projects,
        described in more detail below. Actual results could differ from those
        estimates.
 
 *Revenue
        Recognition.*  Revenue
        from radio frequency and network design and engineering, infrastructure
        equipment construction and installation, radio transmission base station
        modifications and project management services is recognized as work is
        performed. Revenue from real estate acquisition and zoning services is
        recognized upon the identification of an acceptable site and when the lease
        is
        signed between the landlord and customer. Revenue associated with multiple
        element contracts is allocated based on the relative fair value of the services
        included in the contract. Revenue from infrastructure equipment construction
        and
        installation contracts, which are generally completed within 90 days, is
        recorded under the percentage-of-completion method based on the percentage
        that
        total direct costs incurred to date bear to estimated total costs at completion.
        Losses on infrastructure equipment construction and installation contracts
        are
        recognized when such losses become known.
 
 *Risks
        and Uncertainties.* Financial
        instruments that potentially subject us to concentrations of credit risk
        consist
        primarily of accounts receivable. We routinely assess the financial strength
        of
        our customers and do not require collateral or other security to support
        our
        customer receivables. Credit losses are provided for in the consolidated
        financial statements in the form of an allowance for doubtful accounts. Our
        allowance for doubtful accounts is based upon the expected collectibility
        of all
        of our accounts receivable. We determine our allowance by considering a number
        of factors, including the length of time it is past due, our previous loss
        history and the customer’s current ability to pay its obligation. Accounts
        receivable are written off when they are considered uncollectible and any
        payments subsequently received on such receivables are credited to the allowance
        for doubtful accounts.
  7
  *Income
        (Loss) Per Share* .
        We
        calculate earnings (loss) per share in accordance with SFAS No. 128, *Earnings
        Per Share* (“EPS”).
        SFAS No. 128 requires dual presentation of basic EPS and diluted EPS on the
        face
        of the income statement for all entities with complex capital structures.
        Basic
        EPS is computed as net income (loss) divided by the weighted average number
        of
        common shares outstanding for the period. Diluted EPS reflects the potential
        dilution that could occur from common shares issuable through stock options,
        warrants and convertible debentures.
  The
        weighted number of common shares utilized in the basic earnings per share
        computation for the three and nine months ended March 31, 2007, and 2006,
        was
        17,035,357, 17,035,357, 17,034,857 and 12,375,299, **** respectively,
        and takes into account the deemed preferred stock dividends referred to in
        Note
        11 below and a reverse stock split carried out at the time of the Acquisition.
  *Stock-Based
        Compensation.*
  We
        elected to adopt SFAS No. 123(R) using a modified prospective application,
        whereby the provisions of the statement applied going forward only from the
        date
        of adoption to new (issued subsequent to July 1, 2005) stock option awards,
        and
        for the portion of any previously issued and outstanding stock option awards
        for
        which the requisite service is rendered after the date of adoption (all of
        our
        previously issued options had fully vested prior to July 1, 2005).
 
 Compensation
        expense must be recognized for any awards modified, repurchased, or cancelled
        after the date of adoption. Under the modified prospective application, no
        restatement of previously issued results is required.
 
 We
        use
        the Black-Scholes option-pricing model to measure fair value. This is the
        same
        method we used in prior years for disclosure purposes.
  *Recently
        Issued Accounting Pronouncements*
  In
        June
        2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"), "Accounting
        for
        Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109,"
        which establishes that the financial statement effects of a tax position
        taken
        or expected to be taken in a tax return are to be recognized in the financial
        statements when it is more likely than not, based on the technical merits,
        that
        the position will be sustained upon examination. FIN 48 is effective for
        fiscal
        years beginning after December 15, 2006. We
        are
        currently evaluating the potential impact, if any, of the adoption of FIN
        48 on
        the Company’s condensed consolidated financial position, results of operations
        and cash flows or financial statement disclosures.
 
 On
        September 15, 2006, the FASB issued Statement of Financial Accounting Standards
        No. 157, *Fair
        Value Measurements* ("SFAS
        157"), which is effective for fiscal years beginning after November 15, 2007
        and
        for interim periods within those years. SFAS 157 defines fair value,
        establishes a framework for measuring fair value and expands the related
        disclosure requirements. We are currently evaluating the potential impact,
        if
        any, of the adoption of SFAS 157 on the Company’s condensed consolidated
        financial position, results of operations and cash flows or financial statement
        disclosures.
  In
        September 2006, the SEC issued Staff Accounting Bulletin No. 108, *Considering
        the Effects of Prior Year Misstatements when Quantifying Misstatements in
        Current Year Financial Statements* (“SAB
        No.
        108”). SAB No. 108 provides interpretive guidance on how the effects of the
        carryover or reversal of prior year misstatements should be considered in
        quantifying a current year misstatement. Specifically, SAB No. 108 states
        that
        registrants should quantify errors using both a balance sheet and an income
        statement approach and evaluate whether either approach results in quantifying
        a
        misstatement that, when all relevant quantitative and qualitative factors
        are
        considered, is material. SAB No. 108 is effective for fiscal years ending
        after
        November 15, 2006. We do not believe SAB 108 will have a material impact
        on our
        results from operations or financial position.
  8
  **4.**  **Accounts
        Receivable**
 
 Accounts
        receivable at March 31, 2007, and June 30, 2006, consist of the
        following:
 March
                    31,
                
                June
                    30,2007
                
                2006(In
                    Thousands)
                
                (Unaudited)Accounts
                    receivable
                
                $
                11,012
                
                $
                9,723Unbilled
                    receivables
                
                
                4,481
                
                
                2,79015,493
                
                
                12,513Allowance
                    for doubtful accounts
                
                
                (211
                )
                
                (179
                )Total
                
                $
                15,282
                
                $
                12,334
 
 Unbilled
        receivables principally represent the value of services rendered to customers
        not billed as of the balance sheet date. Unbilled receivables are generally
        billed within three months subsequent to the provision of the
        services.
 
 For
        the
        three months ended March 31, 2007, we derived 93% of our total revenue from
        our
        three largest customers. Of those customers, one of them individually
        represented 82% **** of
        revenue for the period. In the three months ended March 31, 2006, six customers
        represented 93% of our total revenue. Of those customers, all of them
        individually represented greater than 5% of net revenue, and four of them
        represented greater than 10% of net revenue for the period.
 
 For
        the
        nine months ended March 31, 2007, we derived 90% of our total revenue from
        our
        three largest customers. Of those customers, one of them represented greater
        than 10% of net revenue for the period. In the nine months ended March 31,
        2006,
        six customers represented 88% of our total revenue. Of those customers, all
        of
        them individually represented greater than 5% of net revenue, and four of
        them
        represented greater than 10% of net revenue for the period.
 
 **5.**  **Inventories**
 
 Inventories
        totaled $758,000 and $322,000 as of March 31, 2007, and June 30, 2006,
        respectively, which consist mainly of raw materials, and are stated at the
        lower
        of cost or market value. Cost is determined using the average cost method.
 
 **6.**  **Debt
        Issuance Costs**
 
 Costs
        associated with the debt issuance discussed in Note 9 below consisted of
        placement fees, advisory fees and legal and other expenses related to the
        transaction. We paid the placement agent of the Note Purchase Agreement
        discussed in Note 9, a cash fee of $310,000. In addition, the placement agent
        received warrants to purchase 428,572 shares of common stock, exercisable
        for a
        period of five years at an exercise price of $0.70 per share. We also entered
        into an advisory services agreement with Sigma Capital Advisors, LLC (“Sigma
        Capital Advisors”), the manager of Sigma Opportunity Fund, LLC (“Sigma”)
        pursuant to which Sigma Capital Advisors will provide us with business, finance
        and organizational strategy, advisory, consulting and other services related
        to
        our business. As consideration for providing the advisory services, we agreed
        to
        pay Sigma Capital Advisors $100,000 and issue warrants to purchase up to
        175,000
        shares of our common stock exercisable for a period of five years at an exercise
        price of $0.55 per share (the “Additional Warrants”). Additionally, we agreed to
        reimburse Sigma for its reasonable out-of-pocket expenses directly related
        to
        its loan, not to exceed $100,000 incurred in connection with the $6.0 million
        of
        debt. The advisory services agreement will remain in effect until Sigma no
        longer holds any of our securities. The placement fee, advisory services
        agreement and the legal and other expenses along with the associated fair
        value
        of the warrants issued will be amortized over the life of the note.
  9
  A
        total
        of $214,000  was
        allocated to the warrants granted to Sigma Capital Advisors and the placement
        agent based on fair value determined using the Black-Scholes model as of
        that
        date issued with a corresponding increase to additional paid in capital.
        The
        costs associated with the debt issuance, which, together with the warrants
        described above, bring the total costs of the debt issuance to $812,000.
  The
        debt
        issuance costs will be amortized over two years, the life of the Note (as
        hereinafter defined).
 
 **7.**  **Accrued
        Liabilities**
  Accrued
        liabilities at March 31, 2007, and June 30, 2006, consist of the
        following:
 March
                    31,
                
                June
                    30,2007
                
                2006(In
                    Thousands)
                
                (Unaudited)Employee
                    compensation
                
                $
                836
                
                $
                536Construction
                    costs
                
                
                4,376
                
                
                3,179Tax
                    liability
                
                
                856
                
                
                175Other
                
                
                521
                
                
                19$
                6,589
                
                $
                3,909
 
 Included
        in accrued liabilities is a potential liability for a state sales tax. In
        January of 2007, we received an informal notice of assessment in the amount
        of
        $1.8 million including unpaid taxes, penalties and interest for the years
        1998
        to 2004. We had previously recorded $175,000 in the year ended June 30, 2006
        related to these potential taxes. We have reviewed their findings and believe
        that certain items that they deemed subject to tax were exempt. Accordingly,
        we
        increased our estimated reserve in the quarter ended December 31, 2006 to
        $600,000 based on our revised best estimate of the potential liability and
        continue to maintain that level of reserve at March 31,
        2007.
 
 **8.**  **Revolving
        Credit Facility**
  In
        September 2003, we entered into a revolving credit facility with Presidential
        Financial Corporation of Delaware Valley (“Presidential”). On April 3, 2007, we
        amended this facility to, among other things, increase the availability under
        the credit facility to $8.0 million. The credit facility is available for
        working capital, capital expenditures and general corporate purposes. The
        credit
        facility interest rate is prime plus one and one-half percent (1.5%). In
        addition, we pay .25% per month on the unpaid balance.
  The
        credit facility is secured by substantially all of BCI’s assets and a guarantee
        from Berliner. The balance outstanding at March 31, 2007, and June 30, 2006,
        was
        $0 and $1.1 million, respectively. The revolving credit facility has a term
        of
        twelve months and currently matures on April 3, 2008, and we can elect to
        renew
        on a month to month basis thereafter.
 
 **9.**  **Note
        Purchase Agreement**
 
 On
        December 29, 2006, we entered into a Note Purchase Agreement (the “Note
        Purchase Agreement”) with Sigma Capital Advisors for the issuance and sale of a
        7% Senior Subordinated Secured Convertible Note due on December 29, 2008,
        in the
        original principal amount of $3.0 million (the “Note”) convertible at $1.10
        per share (subject to adjustment) and a warrant to purchase up to
        1.5 million shares of our common stock with a strike price of $0.01 (the
“Warrant”). The Note is junior to our existing $8.0 million line of credit with
        Presidential.
 
 In
        connection with the Note, we recorded a debt discount equal to the fair value
        of
        the warrants associated with the Note in the amount of $753,000. We reduced
        the
        carrying value of the Note on the books by the $753,000 amount with the
        corresponding entry to paid-in capital. We will accrete this amount over
        the
        life of the Note, charging interest expense whereby the Note balance will
        equal
        $3.0 million at December 29, 2008. If we default on the Note or the Note
        is
        otherwise accelerated, we will charge the balance remaining at that time
        to
        interest expense.
 
 Pursuant
        to the Note Purchase Agreement, we agreed to register the shares of common
        stock
        issuable upon conversion of the Note and upon exercise of the Warrant and
        the
        Additional Warrants (collectively, the “Registrable Shares”) for resale under
        the Securities Act. We agreed to file with the SEC a Registration Statement
        with
        respect to the Registrable Shares, which was filed with the SEC on March
        19,
        2007, and to cause the Registration Statement to become effective on or before
        June 15, 2007.
  10
  We
        will
        be liable for liquidated damages under the following circumstances (each,
        a
“Registration Event”):
 
 ·
              if
                  the Registration Statement is not declared effective by the SEC
                  on or
                  prior to June 15, 2007;
 ·
              if
                  after the effective date of the Registration Statement, sales cannot
                  be
                  made under the Registration Statement, except in certain
                  situations;
 ·
              if
                  after the date on which our securities are listed or included for
                  quotation on any of the Over-the-Counter Bulletin Board, the American
                  Stock Exchange, Nasdaq or New York Stock Exchange (each, a “Trading
                  Market”), our common stock, or the Registrable Securities specifically,
                  are not listed or included for quotation on a Trading Market, or
                  the
                  trading of our common stock is suspended or halted for five or
                  more days
                  on the Trading Market on which our common stock principally trades;
                  or
 ·
              if
                  we fail, refuse or are otherwise unable to timely issue common
                  stock to
                  Sigma upon conversion of the Note or exercise of the Warrant or
                  Additional
                  Warrants, or if we fail, refuse or are otherwise unable to timely
                  transfer
                  any such shares as required under the Note Purchase Agreement or
                  any
                  related document executed
                  therewith.
 
 In
        the
        event of a Registration Event, we shall pay as liquidated damages to Sigma,
        for
        each 30-day period of the Registration Event, an amount in cash equal to
        2% of
        the aggregate purchase price paid by Sigma pursuant to the Note Purchase
        Agreement; provided that in no event will we be required to pay any such
        amount
        for periods after the date that is six (6) months after the Required
        Effective Date. We are required to pay the liquidated damages within five
        days
        of the end of each calendar month during any Registration Event. We have
        also
        agreed that Sigma may register the Registrable Securities if we file a
        registration statement to register securities for our own account or for
        the
        account of others, except for certain specified registration statements,
        subject
        to certain exclusions and restrictions.
 
 On
        February 2, 2007, we entered into a Joinder Agreement to the Note Purchase
        Agreement with Pacific Asset Partners, LLC (“Pacific”) and Operis Partners I,
        LLC (“Operis”) and issued a second 7% Senior Subordinated Secured Convertible
        Note due on December 29, 2008 in the original principal amount of $1.0 million
        and a warrant to purchase up to 500,000 shares of our common stock (with
        a fair
        value of $376,000) to Pacific and a third 7% Senior Subordinated Secured
        Convertible Note due on December 29, 2008 to Operis in the original principal
        amount of $500,000 and a warrant to purchase up to 250,000 shares of our
        common
        stock (with a fair value of $188,000), respectively, all on substantially
        the
        same terms as the Note and Warrant issued to Sigma.
 
 In
        connection with the Pacific
        and Operis notes, we recorded a debt discount equal to the fair value of
        the warrants associated with such notes in the amount of $376,000 and $188,000,
        respectively. We reduced the carrying value of these notes on the books by
        the
        $376,000 and $188,000 amounts with the corresponding entry to paid-in capital.
        We will accrete this amount over the life of the notes, charging interest
        expense whereby the notes balance will equal $1.5 million at December 29,
        2008.
        If we default on a note or a note is otherwise accelerated, we will charge
        the
        balance remaining at that time to interest expense.
 
 In
        connection with the Note Purchase Agreement, on February 8 , 2007, we
        amended our certificate of incorporation to increase the number of shares
        of our
        authorized common stock from twenty million (20,000,000) shares to 100,000,000
        shares.
  On
        February 15, 2007, we entered into a Joinder Agreement to the Note Purchase
        Agreement with Sigma Berliner, LLC (“Sigma Berliner”) to issued a fourth 7%
        Senior Subordinated Secured Convertible Note due on December 29, 2008 in
        the
        original principal amount of $1.5 million (the
        “Sigma Berliner Note”)and a warrant to purchase up to 750,000 shares of
        our common (with a fair value of $564,000) stock to Sigma Berliner, also
        on
        substantially the same terms as the Note and Warrant issued to
        Sigma.
 
 In
        connection with the Sigma
        BerlinerNote, we recorded a debt discount equal to the fair value of the
        warrants associated with this note in the amount of $564,000. We reduced
        the
        carrying value of this note on the books by the $564,000 amount with the
        corresponding entry to paid-in capital. We will accrete this amount over
        the
        life of this note, charging interest expense whereby the note balance will
        equal
        $1.5 million at December 29, 2008. If we default on the note or the note
        is
        otherwise accelerated, we will charge the balance remaining at that time
        to
        interest expense.
 
 11
  **10.**  **Acquisition
        of Assets of Digitcom and Comtech Systems, Inc.**
 
 ***Digitcom***
  On
        February 28, 2007 (the “Digitcom Closing Date”), BCI entered into an Asset
        Purchase Agreement (the “Asset Purchase Agreement”) with Digital Communication
        Services, Inc., a Texas corporation (“Digitcom”), J&J Leasing Partnership, a
        Texas general partnership (“J&J”), and the shareholders of Digitcom for the
        purchase of certain assets, excluding cash and receivables **,** of
        Digitcom and property of J&J.
  Pursuant
        to the Asset Purchase Agreement, BCI acquired substantially all of Digitcom’s
        assets except for cash and accounts receivable (the “Purchased Assets”). In
        exchange for the Purchased Assets, among other things:
  ·
              BCI
                  made an initial cash payment of
                  $2,000,000;
  ·
              BCI
                  executed a limited recourse promissory note in the aggregate principal
                  amount of $1,750,000 (the “Note”) to J&J. The Note bears interest at
                  the prime rate of interest per annum and is due and payable quarterly
                  for
                  a three-year period ending on the third anniversary of the Digitcom
                  Closing Date. The Note is secured by land and buildings purchased
                  from
                  J&J evidenced by a Deed of Trust made for the benefit of J&J (the
                  “Deed of Trust”);
  ·
              We
                  issued Digitcom a warrant to purchase 500,000 shares of our common
                  stock,
                  par value $0.0002 per share (the “Common Stock”) at a per share exercise
                  price of $0.73 (the “Digitcom Warrant”), which was valued at $241,437;
                  and
  ·
              Digitcom
                  and J&J granted BCI a limited, exclusive license to use the name
                  “Digitcom” for a period of one year from the Digitcom Closing Date for
                  certain business-related purposes.
  In
        addition to the foregoing, BCI agreed to pay the Digitcom Shareholders an
        additional $1,000,000 in three annual installments of $333,333 (each, a
“Contingent Purchase Price Payment”) if the following conditions are
        met:
  ·
              certain
                  performance objectives related to the combined operating results
                  of the
                  Digitcom business and our existing business in Texas (the “Texas
                  Business”); and
  ·
              the
                  Digitcom Shareholders are employed by BCI on each of March 1, 2008,
                  2009
                  and 2010, unless terminated “With Cause,” as such term is defined in each
                  Digitcom Shareholder’s respective Employment Agreement with
                  BCI.
  For
        purposes of determining whether the Digitcom Shareholders have earned a
        Contingent Purchase Price Payment, the operating results for the Texas Business
        will be measured for the twelve month periods ending on February 29, 2008,
        February 28, 2009 and February 28, 2010, respectively (each, a “Measurement
        Period”). If the Digitcom Shareholders earn a Contingent Purchase Price Payment
        in any period, BCI is obligated to make such payment to the Digitcom
        Shareholders within thirty days of the end of the applicable Measurement
        Period.
 
 The
        transaction was recorded as a purchase of assets that included real estate,
        vehicles and equipment, and inventory. The allocation of the purchase price
        is a
        preliminary allocation to identifiable net assets acquired, with the excess
        to
        goodwill, and was based on an outside appraisal. The Company is considering
        a
        potential adjustment to the purchase price allocation based on a review of
        the
        value of the customer relationships acquired from Digitcom, however,
        the Company does not believe the
        potential adjustment will be material.
  The
        allocation of the purchase price was as follows:
 Land
                    and Building
                
                $
                402,300Vehicles
                    and Equipment
                
                
                356,400Inventory
                
                
                325,000Goodwill
                
                
                2,907,737$
                3,991,437
  12
  The
        following table summarizes unaudited pro forma financial information for
        the
        three and nine months ended March 31, 2007 and 2006 assuming the Digitcom
        acquisition had occurred on July 1, 2006. The Digitcom fiscal year end was
        December 31. The unaudited pro forma financial information uses data
        corresponding to Berliner's reporting period. This unaudited pro forma
        information does not represent what would have occurred if the transaction
        had
        taken place on July 1, 2006 and does not reflect our future combined results
        of
        operations or financial position.
 For
                    the Three Months
                  Ended
                    March 31,
                
                For
                    the Nine Months
                  Ended
                    March 31,2007
                
                2006
                
                2007
                
                2006(In
                    thousands except per share data)Sales
                
                $
                17,065
                
                $
                9,924
                
                $
                40,730
                
                $
                32,452Net
                    income (Loss)
                
                $
                950
                
                $
                (365
                )
                $
                659
                
                
                (19,413
                )Net
                    income per share-
                    basic
                
                $
                0.06
                
                $
                0.04
                
                $
                0.04
                
                $
                (1.57
                )-
                    diluted
                
                $
                0.05
                
                $
                0.04
                
                $
                0.04
                
                $
                (1.57
                )
  ***Comtech
        Systems***
 
 On
        February 19, 2007, we acquired substantially all of the assets of Comtech
        Systems, Inc., a specialty communications services provider located in Dayton,
        New Jersey, for approximately $98,000 cash plus a commitment to pay an
        additional $40,000 so long as the principal of Comtech remains an employee
        of
        ours through August 20, 2007.
 
 **11.**  **Recapitalization
        of Berliner**
  In
        connection with the Acquisition, we entered into a voting agreement (the
“Voting
        Agreement”), with Old Berliner, as a holder of a majority of our common stock
        and as the sole holder of our newly issued Series E Preferred Stock, holders
        of
        all of our Series D Preferred Stock and more than two-thirds of the holders
        of
        our Series B Preferred Stock. The Voting Agreement provided for, among other
        things, the approval of certain amendments to our Certificate of Incorporation
        and the Certificates of Designation for the Series B Preferred Stock and
        the
        Series D Preferred Stock (“Recapitalization”).
 
 As
        part
        of the Recapitalization, we recorded a deemed dividend of approximately $19.9
        million on the conversion of the Series B and Series D Preferred Stock due
        to
        the reduction in the conversion price that appears on the accompanying
        Consolidated Statement of Operations in computing the net loss allocable
        to
        common shares in the six months ended December 31, 2005. The deemed dividend
        on
        the Series B and D Convertible Preferred Stock was recorded as the excess
        of the
        fair value of the consideration transferred to the preferred holders as of
        the
        date of the Voting Agreement over the carrying value of the preferred stock
        on
        our balance sheet prior to the conversion. This amount is deemed to represent
        a
        return to the preferred holders and therefore is treated in a manner similar
        to
        dividends paid to holders of preferred stock in the calculation of earnings
        per
        share.
 
 **12.**  **Stock
        Compensation**
 
 In
        September 1999, Novo adopted a stock option and incentive plan, which Berliner
        adopted in its acquisition of Novo, as amended (the “Plan”). Pursuant to the
        Plan, our officers, employees and non-employee directors are eligible to
        receive
        awards of incentive and non-qualified stock options, performance awards,
        unrestricted awards, and restricted stock awards. Under
        the
        Plan, we are authorized to issue stock options or awards equal to 15% of
        the
        fully diluted outstanding common shares. The stock plan committee of our
        board
        of directors is responsible for determining the type of award, when and to
        whom
        awards are granted, the number of shares and terms of the awards and the
        exercise price. The options are exercisable for a period not to exceed ten
        years
        from the date of the grant, unless otherwise approved by the committee. Vesting
        periods range from immediately to four years.
 
 Stock
        based compensation expense of approximately $33,000 and -0- was recorded
        during
        the three months ended March 31, 2007, and 2006, respectively. Stock based
        compensation expense of approximately $199,000 and $23,000 was recorded during
        the nine months ended March 31, 2007, and 2006, respectively. The fair value
        of
        each stock option grant is estimated on the grant date using the Black-Scholes
        option-pricing model with the following assumptions: dividend yield of 0%;
        expected volatility of 73% to 78% (derived from peer company implied estimated
        volatility); expected term of five years (based on our best estimate since
        we do
        not have any historical data); and risk-free interest rate between 4.54%
        and
        5.01% based on the yield at the time of grant of a U.S. Treasury security
        with
        an equivalent term.
  13
  The
          following table summarizes share-based award activity under our stock option
          plans:
 Options
                      Activity:
  2001
                      Plan
                  
                  1999
                      Plan
                  
                  Non-PlanNumber
                      of Shares
                  
                  Weighted
                      Average Exercise Price
                  
                  Number
                      of Shares
                  
                  Weighted
                      Average Exercise Price
                  
                  Number
                      of Shares
                  
                  Weighted
                      Average Exercise PriceOutstanding
                      at June 30, 2006
                  
                  
                  17,724
                  
                  $
                  1,387.50
                  
                  
                  483,300
                  
                  $
                  22.53
                  
                  
                  18,704
                  
                  $
                  6,786.00Options
                      granted at fair value value
                  
                  
                  -
                  
                  
                  
                  
                  
                  963,526
                  
                  $
                  0.80
                  
                  
                  -Options
                      exercised
                  
                  
                  -
                  
                  
                  
                  
                  
                  (500
                  )
                  $
                  0.40
                  
                  
                  -Options
                      cancelled
                  
                  
                  -
                  
                  
                  
                  
                  
                  (73,250
                  )
                  $
                  0.40
                  
                  
                  -Outstanding
                      at March 31, 2007
                  
                  
                  17,724
                  
                  $
                  1,387.50
                  
                  
                  1,373,076
                  
                  $
                  8.47
                  
                  
                  18,704
                  
                  $
                  6,786.00Exercisable
                      at March 31, 2007
                  
                  
                  17,724
                  
                  $
                  1,387.50
                  
                  
                  586,451
                  
                  $
                  18.75
                  
                  
                  18,704
                  
                  $
                  6,786.00
  Nonvested
                      Options Activity:
  2001
                        Plan
                    
                    1999
                        Plan
                    
                    Non-PlanNumber
                        of Shares
                    
                    Weighted
                        Average Fair Value
                    
                    Number
                        of Shares
                    
                    Weighted
                        Average Fair Value
                    
                    Number
                        of Shares
                    
                    Weighted
                        Average Fair ValueBalance
                        at June 30, 2006
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    271,125
                    
                    $
                    0.41
                    
                    
                    -
                    
                    $
                    -Granted
                    
                    
                    -
                    
                    
                    
                    
                    
                    963,526
                    
                    $
                    0.80
                    
                    
                    -Vested
                    
                    
                    -
                    
                    
                    
                    
                    
                    (396,251
                    )
                    
                    
                    
                    
                    -Forfeited
                    
                    
                    -
                    
                    
                    
                    
                    
                    (51,775
                    )
                    
                    
                    
                    
                    -Outstanding
                        at March 31, 2007
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    786,625
                    
                    $
                    0.82
                    
                    
                    -
                    
                    $
                    -
  14
 At
        March
        31, 2007, the range of exercise prices, weighted average exercise price and
        weighted average remaining contractual life for options outstanding are as
        follows:
 Options
                    Outstanding and ExercisableWeighted
                
                WeightedNumber
                
                
                
                Average
                
                AverageOption
                    Price
                
                of
                
                
                
                Exercise
                
                RemainingRange
                
                Shares
                
                Exercisable
                
                Price
                
                Contractual
                    Life2001
                    Plan
                
                
                
                
                
                
                
                $
                1,387.50
                
                
                17,724
                
                
                17,724
                
                $
                1,387.50
                
                
                4.50
                
                
                years1999
                    Plan
                
                $
                0.30
                
                
                to
                
                $
                0.55
                
                
                1,005,550
                
                
                557,925
                
                $
                0.49
                
                
                8.97
                
                
                years$
                0.56
                
                
                to
                
                $
                2.00
                
                
                361,026
                
                
                22,026
                
                $
                1.25
                
                
                9.87
                
                
                years$
                7.05
                
                
                167
                
                
                167
                
                $
                7.05
                
                
                7.43
                
                
                years$
                8.01
                
                
                250
                
                
                250
                
                $
                8.01
                
                
                7.00
                
                
                years$
                16.50
                
                
                4,083
                
                
                4,083
                
                $
                16.50
                
                
                6.00
                
                
                years$
                3,000.00
                
                
                1,167
                
                
                1,167
                
                $
                3,000.00
                
                
                3.71
                
                
                years$
                8,550.00
                
                
                833
                
                
                833
                
                $
                8,550.00
                
                
                4.13
                
                
                yearsNon-Plan
                
                
                
                
                
                
                
                $
                3,600.00
                
                
                637
                
                
                637
                
                $
                3,600.00
                
                
                3.88
                
                
                years$
                6,900.00
                
                
                18,067
                
                
                18,067
                
                $
                6,900.00
                
                
                3.92
                
                
                years
  **13.**  **Related
        Party Transactions**
 
 We
        contract with RBI Real Estate, LLC (“RBI”) for the lease of certain vehicles
        used in our operations. This contract resulted in payments in the three months
        ended March 31, 2007, and 2006, to RBI in an amount equal to $24,000, and
        $24,000, respectively and $72,000 and $73,200 during each of the nine months
        ended March 31, 2007, and 2006. Our current chief executive officer, a major
        beneficial owner of us, and a former senior executive officer of Old Berliner
        own RBI equally.
 
 In
        addition, pursuant to the provisions of the Note Purchase Agreement described
        in
        Note 9 above, so long as the Note remains outstanding or Sigma beneficially
        owns
        at least 5% of our common stock, Sigma has the right to nominate a director
        to
        our Board of Directors. On December 29, 2006, Sigma nominated, and our Board
        of
        Directors appointed, Thom Waye to serve as a member of our Board as a Class
        III
        director with his term expiring at the 2008 annual meeting. We are obligated
        to
        use our best efforts to cause Mr. Waye, as well as all reasonably suited
        future
        designees, to continue to serve on our Board of Directors. We paid Sigma
        Capital
        Advisors a one time fee of $100,000 for business, finance and organizational
        strategy, advisory, consulting and other services related to our business
        for as
        long as the Note is outstanding, and issued warrants to them to purchase
        up to
        175,000 shares of our common stock exercisable for a period of five years
        at an
        exercise price of $0.55 per share . We also paid Sigma $100,000 for expenses
        associated with the Note through March 31, 2007.
  On
        February 15, 2007, we entered into a Joinder Agreement to the Note Purchase
        Agreement with Sigma Berliner, LLC (“Sigma Berliner”), an affiliate of Sigma and
        Thom Waye, and issued a fourth 7% Senior Subordinated Secured Convertible
        Note
        due on December 29, 2008 in the original principal amount of $1.5 million
        and a
        warrant to purchase up to 750,000 shares of our common stock to Sigma Berliner,
        also on substantially the same terms as the Note and Warrant issued to Sigma.
        This transaction was the result of Sigma exercising a right that Sigma
        negotiated as part of the December 29, 2006 transaction, at a time at which
        it
        was not an affiliate of Berliner.
  **14.**  **Legal
        Proceedings**
 
 We
        and
        our subsidiaries are involved in legal proceedings from time to time, none
        of
        which we believe, if decided adversely to us or our subsidiaries, would have
        a
        material adverse effect on our business, financial condition or results of
        operations.
  **15.**  **Subsequent
        Events**
  On
        April
        16, 2007 (the “Radian Closing Date”), BCI entered into an Asset Purchase
        Agreement (the “Radian Asset Purchase Agreement”) with Radian Communication
        Services, Inc., a Delaware corporation (“Radian”) to purchase certain of the
        U.S. assets and operations of Radian and assume certain liabilities of Radian.
        Radian, a Canadian based company, will continue its operations in Canada
        and
        other U.S.-based operations relating to construction of television and broadcast
        radio towers in the U.S.
  15
  Pursuant
        to the Radian Asset Purchase Agreement, BCI acquired certain of Radian’s U.S.
        assets and operations (the “Purchased Assets”) for an aggregate purchase price
        of approximately $8.9 million (the “Purchase Price”) and assumed approximately
        $3.0 million of certain liabilities of Radian (the “Assumed Liabilities”). BCI
        paid $600,000 of the Purchase Price into an Escrow Account under the terms
        of
        the Asset Purchase Agreement. The Purchase Price was paid by funds obtained
        from
        BCI’s existing credit facility with Presidential. The Purchase Price includes
        cash consideration of approximately $3.9 million, including the amount escrowed,
        paid on the Closing Date and the remaining $2.0 million, subject to certain
        post-closing adjustments, if and as receivables are collected in accordance
        with
        ordinary business practices. The Radian Asset Purchase Agreement provides
        for a
        closing payment adjustment after closing, which was made on May 13, 2007,
        and an
        additional adjustment to the Purchase Price after six months, both to be
        based
        on a final determination of factors used in calculating the Purchase Price
        paid
        on the Closing Date.
  **16.**  **Segment
        Financial Data**
  We
        currently report our financial results on the basis of two reportable segments:
        (1) infrastructure construction and technical services and (2) real estate
        acquisition and zoning. The
        segments are determined in accordance with how management views and evaluates
        our business based on the aggregation criteria as outlined in FASB Statement
        No. 131, “Disclosures about Segments of an Enterprise and Related
        Information.” Operating income (loss), as presented below, is defined as gross
        margin less selling, general and administrative expenses, depreciation and
        gain
        (loss) on sale of fixed assets. We do not identify or allocate assets, including
        capital expenditures, by operating segment. Accordingly, assets are not reported
        by segment because the information is not available and is not reviewed in
        the
        evaluation of segment performance or in making decisions in the allocation
        of
        resources. The increase in total assets during the nine months ended March
        31,
        2007, was due mainly to the increase in cash, property and equipment and
        goodwill associated with the acquisition of Digitcom and corresponding long-term
        debt associated with the Note Purchase Agreement and debt from the Digitcom
        transaction. Selected
        segment financial information for the three and nine months ended March 31,
        2007, and 2006, is presented below:
 Three
                    months ended
                
                Nine
                    months endedMarch
                    31
                
                March
                    312007
                
                2006
                
                2007
                
                2006(Unaudited)
                
                (Unaudited)
                
                (Unaudited)
                
                (Unaudited)(In
                    Thousands)Revenues:Infrastructure
                    construction and technical services
                
                $
                12,621
                
                $
                7,731
                
                $
                29,348
                
                $
                26,367Real
                    estate acquisition and zoning
                
                
                2,773
                
                
                816
                
                
                7,539
                
                
                1,945Total
                
                $
                15,394
                
                $
                8,547
                
                $
                36,887
                
                $
                28,312Operating
                    income (loss):Infrastructure
                    construction and technical services
                
                $
                602
                
                $
                (121
                )
                $
                860
                
                $
                648Real
                    estate acquisition and zoning
                
                
                532
                
                
                (235
                )
                
                1,406
                
                
                (454
                )$
                1,134
                
                $
                (356
                )
                $
                2,266
                
                $
                194
  16
  **Item
        2.**  **Management's
        Discussion and Analysis of Financial Condition and Results of
        Operations**
 
 **Cautionary
        Statement for the Purposes of the “Safe Harbor” Provisions of the Private
        Securities Litigation Reform Act of 1995**
  Certain
        information included in this Quarterly Report on Form 10-Q and in our other
        reports, SEC filings, statements and presentations is forward-looking within
        the
        meaning of the Private Securities Litigation Reform Act of 1995, including,
        but
        not limited to, statements concerning our anticipated operating results,
        financial resources, growth and expansion and the ability to obtain new
        contracts. Such forward-looking information involves important risks and
        uncertainties that could significantly affect actual results and cause them
        to
        differ materially from expectations expressed herein and in other reports,
        SEC
        filings, statements and presentations. Therefore, this Quarterly Report should
        only be read in context described under “Forward-Looking Statements” and “Risk
        Factors” below.
  **Forward-Looking
        Statements**
 
 The
        SEC
        encourages companies to disclose forward-looking information so that investors
        and stockholders can better understand a company’s future prospects and make
        investment decisions. “Forward-looking” statements appear throughout this
        Quarterly Report. We have based these forward-looking statements on our current
        expectations and projections about future events. We have attempted, wherever
        possible, to identify such statements by using words such as “anticipates,”
“estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and
        terms of similar substance in connection with any discussions of future
        operating or financial performance.
  The
        important factors listed in Part II, Item 1A of this Quarterly Report and
        in our
        Annual Report on Form 10-K for our fiscal year ended June 30, 2006 (the “Annual
        Report”) under the heading entitled “Risk Factors,” as well as all other
        cautionary language in this Quarterly Report, provide examples of risks,
        uncertainties and events that may cause actual results to differ materially
        from
        the expectations described in these “forward-looking” statements. It is
        important to note that the occurrence of the events described in these
        considerations and elsewhere in this Quarterly Report and our Annual Report
        could have an adverse effect on our business, results of operations or financial
        condition.
  Forward-looking
        statements in this Quarterly Report include, without limitation, statements
        concerning:
  ·
              our
                  financial condition and strategic
                  direction;
 ·
              our
                  future capital requirements and our ability to satisfy our capital
                  needs;
 ·
              the
                  potential generation of future revenue;
 ·
              our
                  ability to adequately staff our service
                  offerings;
 ·
              opportunities
                  for BCI from new and emerging wireless
                  technologies;
 ·
              our
                  ability to obtain additional
                  financing;
 ·
              our
                  growth strategy for BCI;
 ·
              trends
                  in the wireless telecommunications
                  industry;
 ·
              key
                  drivers of change in BCI’s
                  business;
 ·
              our
                  competitive position; and
 ·
              other
                  statements that contain words like “believe,” “anticipate,” “expect” and
                  similar expressions are also used to identify forward-looking
                  statements.
 
 It
        is
        important to note that all of our forward-looking statements are subject
        to a
        number of risks, assumptions and uncertainties, such as (and in no particular
        order):
 
 ·
              risk
                  associated with integration of recent business
                  acquisitions;
 ·
              risks
                  associated with competition in the wireless telecommunications
                  industry;
 ·
              risks
                  that we will not be able to generate positive cash
                  flow;
 ·
              risks
                  that we may not be able to obtain additional
                  financing;
 ·
              risks
                  related to a concentration of revenue from a small number of
                  customers;
 ·
              risks
                  that BCI will not be able to take advantage of new and emerging
                  wireless
                  technologies; and
 ·
              risks
                  that BCI will be unable to adequately staff its service
                  offerings.
  17
  This
        list
        is only an example of the risks that may affect the forward-looking statements.
        If any of these risks or uncertainties materialize (or if they fail to
        materialize), or if the underlying assumptions are incorrect, then actual
        results may differ materially from those projected in the forward-looking
        statements.
  Additional
        factors that could cause actual results to differ materially from those
        reflected in the forward-looking statements include, without limitation,
        those
        discussed elsewhere in this Quarterly Report. It is important not to place
        undue
        reliance on these forward-looking statements, which reflect our analysis,
        judgment, belief or expectation only as of the date of this report. We undertake
        no obligation to publicly revise these forward-looking statements to reflect
        events or circumstances that arise after the date of this Quarterly
        Report.
  **Summary
        of Operating Results**
 
 The
        following table presents consolidated selected financial information. The
        statement of operations data for the three and nine months ended March 31,
        2007,
        and 2006, has been derived from unaudited consolidated financial statements
        that, in the opinion of management, include all adjustments, consisting only
        of
        normal recurring adjustments, necessary to state fairly the data for such
        period. We operate in two business segments: providing (1) infrastructure
        equipment construction and technical services and (2) real estate acquisition
        and zoning services to wireless communications carriers.
 Three
                    months ended
                
                Nine
                    months endedMarch
                    31
                
                March
                    312007
                
                2006
                
                2007
                
                2006(Unaudited)
                
                (Unaudited)
                
                (Unaudited)
                
                (Unaudited)(In
                    Thousands)Revenues
                
                $
                15,394
                
                $
                8,547
                
                $
                36,887
                
                $
                28,312Costs
                    of revenues
                
                
                11,222
                
                
                6,483
                
                
                25,597
                
                
                21,289Gross
                    margin
                
                
                4,172
                
                
                2,064
                
                
                11,290
                
                
                7,023Selling,
                    general and administrative expenses
                
                
                2,977
                
                
                2,362
                
                
                8,841
                
                
                6,647Depreciation
                    and amortization
                
                
                68
                
                
                62
                
                
                188
                
                
                187(Gain)
                    loss on sale of fixed assets
                
                
                (7
                )
                
                (4
                )
                
                (5
                )
                
                (5
                )Income
                    (loss) from operations
                
                
                1,134
                
                
                (356
                )
                
                2,266
                
                
                194Other
                    (income) expenseInterest
                    expense
                
                
                400
                
                
                15
                
                
                454
                
                
                41Interest
                    income
                
                
                (20
                )
                
                (4
                )
                
                (28
                )
                
                (10
                )Gain
                    on sale of equity of investment, net of losses
                
                
                (4
                )
                
                -
                
                
                (4
                )
                
                (98
                )Other
                
                
                (14
                )
                
                (4
                )
                
                (28
                )
                
                (90
                )Income
                    (loss) before income taxes
                
                
                772
                
                
                (363
                )
                
                1,872
                
                
                351Income
                    tax expense
                
                
                411
                
                
                2
                
                
                920
                
                
                6Net
                    income (loss)
                
                $
                361
                
                $
                (365
                )
                $
                952
                
                $
                345Deemed
                    Series B and D preferred dividends
                
                
                -
                
                
                -
                
                
                -
                
                
                19,936Net
                    income (loss) allocable to common shareholders
                
                $
                361
                
                $
                (365
                )
                $
                952
                
                $
                (19,591
                )
  **Balance
                    Sheet data:**
                
                March
                    31,(unaudited)2007
                
                2006Cash
                    and cash equivalents
                
                $
                2,214
                
                $
                647Working
                    capital
                
                $
                7,643
                
                $
                1,648Total
                    assets
                
                $
                23,951
                
                $
                11,158Long
                    term liabilities
                
                $
                6,236
                
                $
                187Total
                    liabilities
                
                $
                17,305
                
                $
                8,981Stockholders'
                    equity
                
                $
                6,646
                
                $
                2,176
 18
 **Three
        months ended March 31, 2007, Compared to Three months ended March 31,
        2006**
 
 *Revenue* .  We
        had
        revenue of $15.4 **** million
        for the three months ended March 31, 2007, versus $8.5 million for the three
        months ended March 31, 2006. Revenue from our infrastructure construction
        and
        technical services segment accounted for 82% and 90% for the three months
        ended
        March 31, 2007, and 2006, respectively. ** Revenue
        in our infrastructure construction and technical services segment increased
        63%
        to $12.6 million for the three months ended March 31, 2007 from $7.7 million
        for
        the three months ended March 31, 2006. Revenue from our real estate site
        acquisition and zoning services’ segment accounted for 18% and 10% in the three
        months ended March 31, 2007, and 2006, respectively. Revenue in our real
        estate
        acquisition and zoning segment increased 243% to $2.8 million in the three
        months ended March 31, 2007, from $816,000 for the three months ended March
        31,
        2006. The increase in both segments is primarily due to additional volume
        from
        several large projects from one of our customers. We have been awarded a
        significant new project from this customer, and we believe we will continue
        to
        receive new work from this and other customers over the next 18 to 24 months.
  *Costs
        of Revenue.* Our
        cost
        of revenue was $11.2 **** million
        for the three months ended March 31, 2007, versus $6.5 million for the three
        months ended March 31, 2006. The cost of revenue for our infrastructure
        construction and technical services segment was $9.4 million and $5.7 million
        for the three months ended March 31, 2007, and 2006, respectively. The cost
        of
        revenue for our real estate acquisition and zoning segment was $1.8 million
        and
        $471,000 for the three months ended March 31, 2007, and 2006, respectively.
  19
  *Gross
        Margin.* Our
        gross
        margin for the three months ended March 31, 2007, was $4.2 million as compared
        to $2.1 **** million
        for the three months ended March 31, 2006. Our gross margin as a percentage
        of
        revenue was 27% for the three months ended March 31, 2007, as compared to
        24%
        for the three months ended March 31, 2006, can be attributed to ** higher
        gross margins from our infrastructure construction and technical services
        revenue as well as the increased revenue from site acquisition that
        traditionally has had higher margins. The gross margin for our infrastructure
        construction and technical services segment was $3.2 million and $2.2 million
        for the three months ended March 31, 2007, and 2006, respectively. The gross
        margin for our real estate acquisition and zoning segment was $900,000 and
        $176,000 for the three months ended March 31, 2007, and 2006, respectively.
  *Selling,
        General and Administrative Expenses.* Selling,
        general and administrative expenses increased 26% during the three months
        ended
        March 31, 2007, to $3.0 million from $2.4  million
        in the three months ended March 31, 2006. The increase in selling, general
        and
        administrative expenses resulted primarily from the additional costs associated
        with increased staffing associated with the expansion of our operations.
        In
        addition, we recorded $33,000 in costs associated with stock based compensation
        during the current quarter and $0 in the comparable quarter in
        2006.
  Selling,
        general and administrative expenses for the three months ended March 31,
        2007,
        consisted primarily of (i) $1,872,000 of salaries and benefits, (ii) $58,000
        of
        legal and professional fees, (iii) $147,000  of
        business insurance, (iv) $188,000 **** of
        office
        rents, (v) $119,000  of
        travel
        and entertainment, and (vi) $593,000  of
        other
        general operating expenses. ** Selling,
        general and administrative expenses for the three months ended March 31,
        2006,
        consisted primarily of (i) $1.5 **** million
        of salaries and benefits, (ii) $15,000 of legal and professional fees, (iii)
        $178,000 of business insurance, (iv) $150,000 of office rents, (v) $108,000
        of
        travel and entertainment, and (vi) $411,000 of other general operating expenses.
        We anticipate that selling, general and administrative expenses will increase
        in
        the fourth quarter of fiscal 2007 due to additional costs associated with
        the
        acquisitions completed during the third and fourth fiscal quarters.
  *Depreciation
        and Amortization.* Depreciation
        recorded on fixed assets during the three months ended March 31, 2007, totaled
        $68,000 ** as
        compared to $62,000 resulted for the three months ended March 31, 2006.
  *Gain in
        Equity Investments.* We had
        no loss in equity investments for the three months ended March 31, 2007.
        The
        loss in equity of investments during the three months ended March 31, 2006,
        resulted from our minority ownership interest in a gelato manufacturing,
        retailing and catering business operated under the brand name “Paciugo.” Paciugo
        was accounted for under the equity method of accounting. Under the equity
        method, our proportionate share of each subsidiary’s operating loss is included
        in equity in loss of investments.
  *Income
        Taxes.* ****** At
        June
        30, 2006, we had net operating loss carry forwards for federal and state
        income
        tax purposes of $1.4 million expiring in 2026, which may be applied against
        future taxable income. We can only utilize $64,000 per year due to limitations
        as a result of the Acquisition. ****
 
 **Nine
        months ended March 31, 2007, Compared to Nine months ended March 31,
        2006**
 
 *Revenue* .  We
        had
        revenue of $36.9 **** million
        for the nine months ended March 31, 2007, versus $28.3 million for the nine
        months ended March 31, 2006. Revenue from infrastructure equipment construction
        and technical services was $29.3 million and $26.4 million, and accounted
        for
        80% and 93% of our revenue in the nine months ended March 31, 2007, and 2006,
        respectively. Revenue from real estate site acquisition and zoning services
        was
        $7.5 million and $1.9 million and accounted for 20% and 7% of our revenue
        in the
        nine months ended March 31, 2007, and 2006, respectively. The increase in
        revenue in the nine months ended March 31, 2007, versus the nine months ended
        March 31, 2006, is due primarily to additional volume from several large
        projects from one of our customers.
  *Cost
        of Revenue* .
        Our
        cost of revenue was $25.6 million for the nine months ended March 31, 2007,
        versus $21.3 million for the nine months ended March 31, 2006. The cost of
        revenue for our infrastructure construction and technical services segment
        was
        $21.0 million and approximately $19.6 million for the nine months ended March
        31, 2007, and 2006, respectively. The cost of revenue for our real estate
        acquisition and zoning segment was $4.6 million and $1.7 million for the
        nine
        months ended March 31, 2007, and 2006, respectively.
  *Gross
        Margin.* Our
        gross
        margin for the nine months ended March 31, 2007, was $11.3 million as compared
        to $7.0 million or for the nine months ended March 31, 2006. The increase
        in
        gross margin as a percentage of revenue of 6% can be attributed to the shift
        in
        the type of revenue from installation and construction to site acquisition
        generated in the nine months ended March 31, 2007, as compared to the nine
        months ended March 31, 2006. Historically, we have had higher margins on
        our
        real estate acquisition and zoning services than on infrastructure and equipment
        construction and technical services.
  20
  *Selling,
        General and Administrative Expenses* .
        Selling, general and administrative expenses increased 33% during the nine
        months ended March 31, 2007, to $8.8 million from $6.6 million in the nine
        months ended March 31, 2006. The increase in selling, general and administrative
        expenses resulted primarily from the additional costs associated with increased
        staffing and the additional $425,000 relative to our potential state sales
        tax
        liability for prior years.
  Selling,
        general and administrative expenses for the nine months ended March 31, 2007,
        consisted primarily of (i) $5,294,000 of salaries and benefits, (ii) $293,000
        of
        legal and professional fees, (iii) $560,000 of business insurance, (iv)
        $490,000 **** of
        office
        rents, (v) $350,000 of travel and entertainment, and (vi) $1,854,000 of other
        general operating expenses (including the $425,000 of additional potential
        sales
        tax liability). Selling, general and administrative expenses for the nine
        months
        ended March 31, 2006, consisted primarily of (i) $4.2 million of salaries
        and
        benefits, (ii) $199,000 of legal and professional fees, (iii) $539,000 of
        business insurance, (iv) $443,000 of office rents, (v) $334,000 of travel
        and
        entertainment, and (vi) $932,000 of other general operating expenses. We
        anticipate that selling, general and administrative expenses will increase
        in
        the fourth quarter of fiscal 2007 due to additional costs associated with
        the
        acquisitions completed during the third and fourth fiscal quarters .
  *Depreciation
        and Amortization* .
        Depreciation recorded on fixed assets during the nine months ended March
        31,
        2007, totaled approximately $188,000, as compared to approximately $187,000
        for
        nine months ended March 31, 2006.
  *Gain
        in Equity Investments* .
        We had
        no loss in equity investments for the nine months ended March 31, 2007. Loss
        in
        equity investments for the nine months ended March 31, 2006, results from
        our
        minority ownership interest in Paciugo that was accounted for under the equity
        method of accounting. Under the equity method, our proportionate share of
        each
        subsidiary’s operating loss is included in equity in loss of investments. We
        sold
        our interest in Paciugo on December 30, 2005 and recorded a gain of
        $200,000.
  *Other
        (Income)* .
        Other
        income during the nine months ended March 31, 2006, includes a recovery of
        approximately $88,000 of legal fees previously expensed, which had been paid
        on
        behalf of a third party.
  *Income
        Taxes.* ****** At
        June
        30, 2006, we had net operating loss carry forwards for federal and state
        income
        tax purposes of $1.4 million expiring in 2026, which may be applied against
        future taxable income. We can only utilize $64,000 per year due to limitations
        as a result of the Acquisition. ****
 
 **Liquidity
        and Capital Resources**
  At
        March
        31, 2007, we had consolidated current assets of $18.7 million, including
        cash and cash equivalents of approximately $2.2 million and net working capital
        of approximately $7.6 million. Historically, we funded our operations
        primarily through the proceeds of private placements of our common and preferred
        stock and borrowings under loan and capital lease agreements. Principal uses
        of
        cash during the nine months ended March 31, 2007, have been to fund (i) working
        capital requirements; (ii) capital expenditures; (iii) acquisition costs,
        and (iv) reductions in our line of credit.
  In
        November 2005, we renewed our revolving credit facility, which initially
        provided for borrowings up to $1,250,000 and was subsequently amended in
        July of
        2006 and April of 2007 to increase the availability to $8.0 million. We used
        this increase in availability, in part, to fund our acquisition of the U.S.
        operations of Radian Communication Services, Inc. The credit facility is
        also
        available for working capital, capital expenditures and general corporate
        purposes. The credit facility interest rate is prime plus 1.5 percent.
        Additionally, we pay .25% per month on the outstanding balance. The credit
        facility is secured by substantially all of BCI’s assets and a guarantee from
        Berliner. The balance outstanding at March 31, 2007 and June 30, 2006, was
        approximately $0, and $1.1 million, respectively. The revolving credit facility
        is for a period of twelve months and currently matures on April 3, 2008,
        and we
        can elect to renew on a month-to-month basis thereafter.
  On
        December 29, 2006, we entered into a Note Purchase Agreement with Sigma
        Opportunity Fund, L.P. (“Sigma”) for the issuance and sale of a 7% Senior
        Subordinated Secured Convertible Note due on December 29, 2008, in the original
        principal amount of $3.0 million due on December 29, 2008. In addition, on
        February 2, 2007, we entered into Joinder Agreements to the Note Purchase
        Agreement with Pacific Asset Partners, LLC and Operis Partners I, L.P. to
        issue
        a second and third 7% Senior Subordinated Secured Convertible Note due on
        December 29, 2008 in the original principal amounts of $1.0 and $0.5 million,
        respectively. In addition, on February 15, 2007, we entered into a fourth
        and
        final agreement with Sigma Berliner, LLC, an affiliate of Sigma, to raise
        an
        additional $1.5 million through the issuance of another 7% Senior Subordinated
        Secured Convertible Note pursuant to the same terms and conditions as the
        December 29, 2006 Note Purchase Agreement. We will make periodic payments
        of
        interest throughout the life of the notes and may be subject to liquidating
        damages in the maximum amount of $720,000 if we do not meet certain registration
        rights requirements.
  21
  Our
        ability to satisfy our current obligations is dependent upon our cash on
        hand,
        borrowings under our credit facility and the operations of BCI. Our current
        obligations consist of capital expenditures, funding working capital and
        repayment of debt. In the event we do not generate positive cash flow in
        the
        near term, or if we incur unanticipated expenses for operations and are unable
        to acquire additional capital or financing, we will likely have to reassess
        our
        strategic direction, make significant changes to our business operations
        and
        substantially reduce our expenses until such time as we achieve positive
        cash
        flow.
  As
        of
        March 31, 2007, our backlog was approximately $17.0 million as compared to
        $12.2
        million as of March 31, 2006, and we currently anticipate completing those
        backlog orders by June 30, 2007.
  The
        net
        cash provided by (used in) ** operating,
        investing and financing activities for the nine months ended March 31, 2007,
        and
        2006, is summarized below:
  Net
        cash
        provided by operating activities in the nine months ended March 31, 2007,
        and
        2006, totaled $120,000 and $482,000, respectively . During
        the nine months ended March 31, 2007, cash flow used in operating activities
        primarily resulted from operating income, net of non-cash charges, of $952,000,
        an increase in accounts receivable of $3.0 million  due
        to
        increased revenue during the nine months ended March 31, 2007, a decrease
        in
        inventories of $87,000, an increase in prepaid and other assets of $126,000,
        a
        decrease in accounts payable of $1.3 million, an increase in accrued liabilities
        of $2.7 million and an increase in income taxes payable of $228,000. ** In
        the
        nine months ended March 31, 2006, cash provided by operating activities
        primarily resulted from operating income, net of non-cash charges, of $345,000,
        an increase in accounts receivable of $3.8 million, a decrease in inventories
        of
        $110,000, a decrease in prepaid expenses and other assets of $5,000 and an
        increase in accounts payable and accrued liabilities of $3.5
        million. **
  Net
        cash
        used in investing activities was $2.4 million in the nine months ended March
        31,
        2007, and net cash provided by investing activities was $26,000 in the nine
        months ended March 31, 2006.
  Net
        cash
        provided by financing activities was $3.9 million  in
        the
        nine months ended March 31, 2007, and net cash used in financing activities
        was
        $263,000 in the nine months ended March 31, 2006. During the nine months
        ended
        March 31, 2007, net cash provided by financing activities consisted of the
        proceeds from the Note Purchase Agreement of $6.0 million, reduced by payments
        against our credit facility net of borrowings of $1.1 million, reductions
        of
        other debt obligations of $368,000, and debt issuance costs of $598,000.
        During
        the nine months ended March 31, 2006, net cash used in financing activities
        consisted of net borrowings from ** our
        credit facility of approximately $72,000 and payments net of borrowings from
        long-term debt and capital leases of approximately $191,000.
  We
        believe our existing cash, cash equivalents and line of credit will be
        sufficient to meet our cash requirements in the near term. However, we may
        elect
        to seek additional funding or an expanded line of credit in the next twelve
        months in addition to the above referenced $6.0 million in financing
        transactions for additional growth and any potential acquisitions that require
        funding in excess of our current sources. Our future capital requirements
        will
        depend on many factors, including our rate of revenue growth, the costs of
        integrating the operations of our recent acquisitions, the timing and extent
        of
        capital expenditures to support our contracts and expansion of our sales
        and
        marketing efforts. We cannot assure you that additional equity or debt financing
        will be available on acceptable terms, or at all. Our sources of liquidity
        beyond twelve months, in management’s opinion, will be our then current cash
        balances, funds from operations, if any, and our current credit facility
        and any
        additional equity or credit facilities we can arrange. We have no existing
        agreements with third parties to provide us with sources of liquidity and
        capital resources beyond twelve months.
  **Item
        3.**  **Quantitative
        and Qualitative Disclosures About Market Risk**
 
 We
        are
        exposed to the impact of interest rates and other risks. We have investments
        in
        money market funds of $2.0 million at March 31, 2007 and no borrowings under
        our
        line of credit as of that date. We believe that the effects of changes in
        interest rates are limited and would not materially affect
        profitability.
  22
  **Item
        4.**  **Controls
        and Procedures**
  Our
        Chief
        Executive Officer and Chief Financial Officer have evaluated the effectiveness
        of our disclosure controls and procedures as defined in Rule 13a-15(e) and
        15(d)-15(e) of the Securities Exchange Act of 1934 as well as those of BCI.
        Based upon that evaluation, such officers have concluded that our disclosure
        controls and procedures are effective, as of the end of the period covered
        by
        this report, in timely alerting them to material information relating to
        us
        (including our consolidated subsidiaries) required to be included in this
        Quarterly Report. There have been no significant changes in our internal
        controls over financial reporting or in other factors, which could significantly
        affect such internal controls, subsequent to the date that we carried out
        our
        evaluation.
  **PART
        II: OTHER INFORMATION**
  **Item
        1.**  **Legal
        Proceedings**
  We
        and
        our subsidiaries are involved in legal proceedings from time to time, none
        of
        which we believe, if decided adversely to us or our subsidiaries, would have
        a
        material adverse effect on our business, financial condition or results of
        operations.
  **Item
        1A. Risk Factors**
  *Old
        Berliner had a history of losses, and although we have had net income in
        prior
        periods, we may never achieve sustained profitability.*
  Although
        we had net income during the nine months ended March 31, 2007, and the year
        ended June 30, 2006, we may not be profitable in future periods, either on
        a
        short or long-term basis. Prior to our most recent fiscal year end, Old Berliner
        had historically incurred net losses. Old Berliner incurred a net loss of
        approximately $836,800 and $1.2 million for 2004 and the six months ended
        June
        30, 2005, respectively. We can provide no assurances that losses will not
        recur
        in the future or that we will ever sustain profitability on a quarterly or
        annual basis. To the extent that revenue declines or does not grow at
        anticipated rates, increases in operating expenses precede or are not
        subsequently followed by commensurate increases in revenue or we are unable
        to
        adjust operating expense levels accordingly, your investment could be
        jeopardized.
  *We
        generate a substantial portion of our revenue from a limited number of
        customers, and if our relationships with such customers were harmed, our
        business would suffer.*
  For
        the
        nine months ended March 31, 2007, we derived 90% of our total revenue from
        our
        three largest customers with one customer representing 82% **.** For the
        year ended June 30, 2006, we derived 83% of our total revenue from our four
        largest customers. For the six months ended June 30, 2005, we derived 86%
        of our
        total revenue from our four largest customers. We believe that a limited
        number
        of clients will continue to be the source of a substantial portion of our
        revenue for the foreseeable future. Key factors in maintaining our relationships
        with such customers include, without limitation, our performance on individual
        contracts and the strength of our professional reputation. To the extent
        that
        our performance does not meet client expectations, or our reputation or
        relationships with one or more key customers are impaired, our revenue and
        operating results could be materially harmed.
  *Our
        recent rapid growth has created significant challenges for our management,
        systems and resources, and we may be unable to effectively control future
        growth, if any, as a result.*
 
 We
        have
        grown since our acquisition by Novo Networks, Inc. in February 2005. In 2007
        we
        acquired two new businesses which have significantly expanded our operations,
        increased our number of employees, and extended our geographic footprint,
        and we
        are in the process of integrating these businesses into our existing operations.
        This rapid growth has placed a strain on our systems, processes, resources,
        management and other infrastructure and support mechanisms. We expect that
        any
        future growth that we experience will place an even greater strain on these
        resources. To manage the anticipated growth of our operations, we will be
        required to:
 
 ·
              improve
                  existing and implement new operational, financial and management
                  information controls, reporting systems and
                  procedures;
 ·
              establish
                  relationships with additional vendors, suppliers and strategic
                  partners
                  and maintain and expand our existing relationships;
                  and
 ·
              hire,
                  train, manage and retain additional personnel, especially qualified
                  sales
                  and marketing, business development and financial reporting
                  personnel.
  23
  To
        the
        extent we are unable to assemble the personnel, controls, systems, procedures
        and relationships necessary to manage our future growth, if any, management
        resources may be diverted and our opportunity for success limited.
  *If
        the percentage of our revenue derived from construction-related activities
        increases, our gross margins may suffer.*
  We
        have
        historically earned lower relative gross margins on engineering and
        construction-related activities. We typically perform our own network
        design-related, site acquisition-related services and hire subcontractors
        to
        perform engineering and construction services under our direct management.
        Subcontracted work generally carries lower profit margins than self- performed
        work. If the proportion of construction-related services we deliver increases,
        then our gross margins and net income may suffer.
  *Recent
        and continuing consolidations among wireless service providers may result
        in a
        significant reduction in our existing and potential customer base, and, if
        we
        are unable to maintain our existing relations with such providers or expand
        such
        relationships, we could have a significant decrease in our revenue, which
        would
        negatively impact our ability to generate income as well as result in lower
        profitability.*
  The
        level
        of merger activity among telecommunications operators has increased markedly
        in
        the past three years and this trend is continuing. One of our customers,
        Sprint,
        has merged with Nextel. These consolidations have and will reduce the number
        of
        companies composing that portion of our customer base consisting of wireless
        service providers. To the extent that these combined companies decide to
        reduce
        the number of their service providers, our already highly competitive market
        environment will become more competitive, at least in the short term, as
        the
        same number of service providers will seek business from a reduced number
        of
        potential customers. Because we have historically derived a significant portion
        of our revenue in any given year from a limited number of customers, we may
        not
        be able to reduce costs in response to any decrease in our revenue. If we
        are
        unable to maintain our existing relations with these companies or expand
        such
        relationships, we could have a significant decrease in our revenue, which
        would
        negatively impact our ability to generate income as well as result in lower
        profitability.
  *We
        may need additional working capital, the lack of which would likely have
        a
        significant negative impact on our ability to grow our
        business.*
  Although
        we have increased our current working capital, we may require additional
        working
        capital in order to fund the growth of our operations. If adequate funds
        are not
        available on terms acceptable to us, we may not be able to effectively grow
        our
        operations and expand our business. Our ability to fund our operations and
        corporate infrastructure is directly related to the continued availability
        of
        these and other funding sources.
  In
        order
        to grow our business, we may incur significant operating, borrowing and other
        costs. Should our operations require additional funding or our capital
        requirements exceed current estimates, we could be required to seek additional
        financing in the future. We can provide no assurances that we would be able
        to
        raise such financing when needed or on acceptable terms. As a result, we
        may be
        forced to reduce or delay additional expenditures or otherwise delay, curtail
        or
        discontinue some or all of our operations. Further, if we are able to access
        additional capital through borrowings, such debt would increase our debt
        obligations, which could have a material adverse effect on our financial
        condition, results of operation or cash flows.
  *If
        we
        experience delays and or defaults in customer payments, we could be unable
        to
        cover all expenditures.*
  Because
        of the nature of our contracts, at times we commit resources to projects
        prior
        to receiving payments from our customer in amounts sufficient to cover
        expenditures on client projects as they are incurred. Delays in customer
        payments may require us to make a working capital investment. If a customer
        defaults in making its payments on a project in which we have devoted
        significant resources, it could have a material negative effect on our results
        of operations.
  *Many
        of our customers face difficulties in obtaining financing to fund the expansion
        of their wireless networks, including deployments and upgrades, which may
        reduce
        demand for our services.*
  Due
        to
        downturns in the financial markets which began in 2000, and specifically
        within
        the telecommunications financial markets, many of our customers or potential
        customers have had and may continue to have trouble obtaining financing to
        fund
        the expansion or improvement of their wireless networks. Some customers have
        also found it difficult to predict demand for their products and services.
        Most
        vulnerable are customers that are new licensees and wireless service providers
        who have limited sources of funds from operations or have business plans
        that
        are dependent on funding from the capital markets. Our customers may slow
        or
        postpone deployment of new networks and development of new products, which
        reduces the demand for our services.
  24
  *Our
        business is dependent upon our ability to keep pace with the latest
        technological changes.*
  The
        market for our services is characterized by rapid change and technological
        improvements. Failure to respond in a timely and cost-effective way to these
        technological developments will result in serious harm to our business and
        operating results. We have derived, and we expect to continue to derive,
        a
        substantial portion of our revenue from creating wireless networks that are
        based upon today’s leading technologies and that are capable of adapting to
        future technologies. As a result, our success will depend, in part, on our
        ability to develop and market service offerings that respond in a timely
        manner
        to the technological advances of our customers, evolving industry standards
        and
        changing client preferences.
  *Our
        success is dependent on growth in the deployment of wireless networks and
        new
        technology upgrades, and to the extent that such growth slows, our business
        may
        be harmed.*
  Telecommunications
        carriers are constantly re-evaluating their network deployment plans in response
        to trends in the capital markets, changing perceptions regarding industry
        growth, the adoption of new wireless technologies, increasing pricing
        competition for subscribers and general economic conditions in the United
        States
        and internationally. If the rate of network deployment slows and carriers
        reduce
        their capital investments in wireless infrastructure or fail to expand into
        new
        geographic areas, our business may be significantly harmed.
  The
        uncertainty associated with rapidly changing telecommunications technologies
        may
        also negatively impact the rate of deployment of wireless networks and the
        demand for our services. Telecommunications service providers face significant
        challenges in assessing consumer demand and in acceptance of rapidly changing
        enhanced telecommunications capabilities. If telecommunications service
        providers perceive that the rate of acceptance of next generation
        telecommunications products will grow more slowly than previously expected,
        they
        may, as a result, slow their development of next generation technologies.
        Moreover, increasing price competition for subscribers could adversely affect
        the profitability of carriers and limit their resources for network deployment.
        Any significant sustained slowdown will further reduce the demand for our
        services and adversely affect our financial results.
  *Further
        delays in the adoption and deployment of next generation wireless networks
        could
        negatively affect the demand for our services and our ability to grow our
        revenue.*
  Wireless
        service providers may continue to delay their development of next generation
        technology if, among other things, they expect slow growth in the adoption
        of
        such technology, reduced profitability due to price competition for subscribers
        or regulatory delays. For example, even though wireless service providers
        have
        made substantial investments worldwide in acquiring third generator, or 3G
        licenses, many providers have delayed deployment of 3G networks. Since we
        expect
        that a substantial portion of our growth will be derived from our services
        related to new technologies, further delays in the adoption and deployment
        of
        these technologies, such as 3G and fourth generator, or 4G, would negatively
        affect the demand for our services and our ability to grow our revenue.
  *We
        bear the risk of cost overruns in some of our contracts.*
  We
        conduct our business under various types of contractual arrangements. In
        terms
        of dollar-value, a majority of our contracts are guaranteed maximum or lump
        sum
        contracts, where we bear a significant portion of the risk for cost overruns.
        Under such contracts, prices are established, in part, on cost and scheduling
        estimates, which are based on a number of assumptions, including, without
        limitation, assumptions about future economic conditions, prices and
        availability of labor, equipment and materials, and other exigencies. If
        those
        estimates prove inaccurate, or circumstances change, cost overruns may occur,
        and we could experience reduced profits or, in some cases, a loss for that
        project.
  *Our
        dependence on subcontractors and equipment manufacturers could adversely
        affect
        us.*
  We
        rely
        on third-party subcontractors as well as third-party equipment manufacturers
        to
        complete our projects. To the extent that we cannot engage subcontractors
        or
        acquire equipment or materials, our ability to complete a project in a timely
        fashion or at a profit may be impaired. If the amount we are required to
        pay for
        these goods and services exceeds the amount we have estimated in bidding
        for
        fixed-price contracts, we could experience losses in the performance of these
        contracts. In addition, if a subcontractor or a manufacturer is unable to
        deliver its services, equipment or materials according to the negotiated
        terms
        for any reason, including the deterioration of its financial condition, we
        may
        be required to purchase the services, equipment or materials from another
        source
        at a higher price. This may reduce the profit to be realized or result in
        a loss
        on a project for which the services, equipment or materials were
        needed.
  25
  *If
        we
        guarantee the timely completion or performance standard of a project, we
        could
        incur significant, additional costs.*
  In
        some
        instances and in many of our fixed-price contracts, we guarantee a customer
        that
        we will complete a project by a scheduled date. The contract sometimes provides
        that the project, when completed, will also achieve certain performance
        standards. If we subsequently fail to complete the project as scheduled,
        or if
        the project falls short of guaranteed performance standards, we may be held
        responsible for cost impacts to the client resulting from any delay or the
        costs
        to cause the project to achieve such performance standards. In some cases,
        where
        we fail to meet those performance standards, we may also be subject to
        agreed-upon liquidated damages. To the extent that these events occur, the
        total
        costs of the project would exceed its original estimates and we could experience
        reduced profits or, in some cases, a loss for that project.
  *The
        nature of our engineering and construction business exposes us to potential
        liability claims and contract disputes that may negatively affect our results
        of
        operations.*
  We
        engage
        in engineering and construction activities for wireless networks where design,
        construction or systems failures can result in substantial injury or damage
        to
        third parties. Any liability in excess of insurance limits at locations
        engineered or constructed by us could result in significant liability claims
        against us, which claims may negatively affect our results of operations,
        perhaps materially. In addition, if there is a customer dispute regarding
        our
        performance of project services, the customer may decide to delay or withhold
        payment to us. If we were ultimately unable to collect on these payments,
        our
        results of operations would be negatively impacted, perhaps materially.
  *We
        maintain a workforce based upon current and anticipated workloads. If we
        do not
        receive future contract awards or if these awards are delayed, we may incur
        significant costs in meeting workforce demands.*
  Our
        estimates of future performance depend on, among other matters, whether and
        when
        we will receive certain new contract awards. While our estimates are based
        upon
        our good faith judgment, they can be unreliable and may frequently change
        based
        on newly available information. In the case of our larger projects where
        timing
        is often uncertain, it is particularly difficult to project whether and when
        we
        will receive a contract award. The uncertainty of contract award timing can
        present difficulties in matching our workforce size with our contract needs.
        If
        an expected contract award is delayed or not received, we could incur costs
        resulting from reductions in staff or redundancy of facilities that would
        have
        the effect of negatively impacting our operating performance.
  *We
        may not be able to hire or retain a sufficient number of qualified engineers
        and
        other employees to meet our contractual obligations or maintain the quality
        of
        our services.*
  As
        a
        service business, our ultimate success depends significantly on our ability
        to
        attract, train and retain engineering, system deployment, managerial, marketing
        and sales personnel who have excellent technical and interpersonal skills.
        Competition for employees with the required range of skills fluctuates,
        depending on customer needs, and can be intense, particularly for radio
        frequency engineers. At times, we have had difficulty recruiting and retaining
        qualified technical personnel to properly and quickly staff large customer
        projects. In addition to recruitment difficulties, we must fully and properly
        train our employees according to our customers’ technology requirements and
        deploy and fully integrate each employee into our customers’ projects. Increased
        competition in the wireless industry is increasing the level of specific
        technical experience and training required to fulfill customer-staffing
        requirements. This process is costly and resource constraints may impede
        our
        ability to quickly and effectively train and deploy all of the personnel
        required to staff a large project.
  *Intense
        competition in the engineering and construction industry could reduce our
        market
        share.*
  We
        serve
        markets that are highly competitive and in which a large number of multinational
        companies compete. In particular, the engineering and construction markets
        are
        highly competitive and require substantial resources and capital investment
        in
        equipment, technology and skilled personnel. Competition also places downward
        pressure on our contract prices and profit margins. Intense competition is
        expected to continue in these markets. If we are unable to meet these
        competitive challenges, we could lose market share to our competitors and
        experience an overall reduction in our operating performance.
  *We
        are vulnerable to the cyclical nature of the market we serve.*
  The
        demand for our services and products is dependent upon the existence of projects
        with engineering, procurement, construction and management needs. The
        telecommunications market, where we principally compete, is particularly
        cyclical in nature. Such industries have historically been and will continue
        to
        be vulnerable to general downturns and are cyclical in nature. As a result,
        our
        past results have varied considerably and our performance may continue to
        be
        volatile, depending upon the demand for future projects in the industry.
  26
   *We
        may experience significant fluctuations in our quarterly results as a result
        of
        uncertainties relating to our ability to generate additional revenue, manage
        expenditures and other factors, certain of which are outside of our control.*
  Our
        operating results have varied considerably in the past, and are likely to
        continue to do so, due to a number of factors. Many of these factors are
        outside
        our control and include, without limitation, the following:
  ·
              financing
                  provided to potential customers;
 ·
              the
                  commencement, progress, completion or termination of contracts
                  during any
                  particular quarter;
 ·
              the
                  availability of equipment to deploy new technologies, such a 4G
                  and
                  broadband;
 ·
              the
                  growth rate of wireless subscribers, which has a direct impact
                  on the rate
                  at which new cell sites are developed and built;
                  and
 ·
              telecommunications
                  market conditions and economic conditions
                  generally.
  Due
        to
        these factors, our results for a particular quarter, and therefore, our combined
        results for that same period, may not meet the expectations of investors,
        which
        could cause the price of our common stock to decline significantly.
  *Our
        stock price is volatile and purchasers of our common stock could incur
        substantial losses.*
 
 Our
        stock
        price is volatile. The stock market in general, and the market for
        telecommunications companies in particular, has experienced extreme volatility
        that has often been unrelated to the operating performance of particular
        companies. As a result of this volatility, investors may not be able to sell
        their common stock at or above their respective purchase prices. The market
        price for our common stock may be influenced by many factors, including,
        but not
        limited to, variations in our financial results or those of companies that
        are
        perceived to be similar to us, investors’ perceptions of us, the number of our
        shares available in the market, future sales of our common stock, and general
        economic, industry and market conditions.
  *There
        is a lack of a public market for our shares, which limits our shareholders'
        ability to sell their shares.*
  There
        is
        currently a limited public market for our shares, and we cannot assure you
        that
        a more active market for our stock will develop. Consequently, investors
        may not
        be able to liquidate their shares at a suitable price, or at all.
  *We
        have experienced, and expect to continue to experience, long sales cycles,
        we
        expect to incur significant costs to generate new business and our customer
        base
        may not experience growth commensurate with such costs.*
  Historically,
        purchases of our services and our services by customers often entailed a
        lengthy
        decision-making process for the customer. Selecting wireless network deployment
        services involves substantial costs and has strategic implications. Senior
        management of the customer is often involved in this process, given the
        importance of the decision, as well as the risks faced by the customer if
        the
        services do not meet the customer’s particular needs. We may expend substantial
        funds and effort to negotiate agreements for these services, but may ultimately
        be unable to consummate agreements for services and expand our customer base.
        As
        a result of lengthy sales cycles, we expect to continue to incur relatively
        high
        costs to generate new business.
  *If
        we
        are unable to identify and complete future acquisitions, we may be unable
        to
        continue our growth.*
  We
        may
        not be able to identify suitable acquisition opportunities. Even if we identify
        favorable acquisition targets, there is no guarantee that we can acquire
        them on
        reasonable terms or at all. If we are unable to complete attractive
        acquisitions, the growth that we have experienced over the last three fiscal
        years may decline.
 
 *We
        may be subject to additional liability for state sales tax.*
 
 In
        January 2007, we received an informal notice of assessment in the amount
        of $1.8
        million from a state tax authority, including unpaid sales taxes, penalties
        and
        interest for the years 1998 through 2004. We had previously recorded $175,000
        in
        the year ended June 30, 2006 related to these potential taxes, and have
        increased our estimated reserve for the nine months ended March 31, 2007
        to
        $600,000 based on the notice from the taxing authority and our revised best
        estimate of the potential liability. Our best estimate may not be correct,
        and
        we could be required to pay the entire $1.8 million, with the possibility
        of
        additional penalties and interest, and also additional amounts for tax periods
        dating after 2004. If we owe any amounts over and above our estimate of
        $600,000, we will revise our accrued liabilities, and increase our selling,
        general and administrative expenses in the period when we become aware of
        these
        additional amounts, and this could materially impact our results of operations
        for that period.
  27
  **Risk
        Factors Related to** **Financing Activities**
  *We
        may not be able to register the shares of common stock issuable upon conversion
        of our 7% Senior Subordinated Secured Convertible Notes Due 2008 and exercise
        of
        certain of our outstanding warrants, which may subject us to financial
        penalties.*
  The
        Note
        Purchase Agreement we entered into in connectio n
        with
        our financings with Sigma Opportunity Fund, LLC (“Sigma”) ,
        Pacific
        Asset Partners, LP (“Pacific”) and Operis Partners I, LLC (“Operis”) and
        Sigma Berliner, LLC  **** requires
        that we file and make effective a registration statement with the SEC covering
        the shares of common stock issuable upon conversion of each of the 7% Senior
        Subordinated Secured Convertible Notes Due 2008 and exercise of the accompanying
        warrants. We
        were
        required to file this registration statement no later than March 15, 2007. The registration statement
        was filed on March 19, 2007, and our selling shareholders have waived any
        liquidated damages which otherwise would gave accrued because of this filing
        delay. We are now required to use our best efforts to cause it to become
        effective prior to June 15, 2007 and remain effective for a period of three
        years, or earlier if the selling shareholders do not meet ownership thresholds
        set forth in the Note Purchase Agreement .
        If we
        are unable to comply with this registration requirement, we will be subject
        to
        damages equal to 2% of the aggregate purchase price paid by each purchaser
        for
        each of the first six months that we fail to meet the requirement. We cannot
        guarantee that we will be able to cause a registration statement covering
        the
        shares to be declared effective within the time provided, or at all. If
        we are
        unable to meet the registration requirements set forth in the Note Purchase
        Agreement, our net income will be reduced by the amount of damages we are
        required to pay.
  *Our
        7% Senior Subordinated Secured Convertible Notes Due 2008 and the related
        Note
        Purchase Agreement contain restrictions that may limit our flexibility to
        take
        certain actions in the future, including raising additional capital.*
  Our
        7%
        Senior Subordinated Secured Convertible Notes Due 2008 contain provisions
        that,
        among other things, limit our ability to:
  ·
              incur
                  additional indebtedness;
  ·
              transfer
                  or sell substantially all of our assets;
  ·
              incur
                  liens;
  ·
              issue
                  certain securities; and
  ·
              enter
                  into transactions with affiliates.
  In
        addition, if we issue any securities at prices below their fair market value
        on
        the date of issue (as defined in the Notes), the conversion price of the
        Notes
        and the exercise price of our outstanding warrants will be reduced
        proportionately, causing further dilution to our common shareholders. The
        Note
        Purchase Agreement also gives the
        purchasers preemptive rights to participate in any subsequent issuances of our securities.
        These and other restrictions in the Notes and the Note Purchase Agreement
        may
        prevent us from raising capital in the future on advantageous terms, or at
        all,
        and may restrict some of our operating flexibility.
  *A
        default on our debt obligations could result in foreclosure on all of our
        assets.*
 
 At
        March
        31, 2007, we had issued an aggregate of $6.0 million of our 7% Senior
        Subordinated Secured Convertible Notes Due December 29, 2008, which is secured
        by in substantially all of our accounts, inventory, furniture, fixtures,
        equipment, general intangibles, patents, licenses, investment property,
        promissory notes, instruments, documents and tangible and electronic chattel
        paper (collectively, the “Collateral”), and all proceeds, products, rents and
        profits from the Collateral. An Event of Default with respect to such
        obligations and could result in, among other things, the acceleration and
        demand
        for payment of all principal and interest due and the foreclosure on the
        Collateral. The sale of such Collateral at foreclosure would result in a
        substantial disruption in our ability to operate our business and could
        significantly lower our revenues and profitability. We may be able to refinance
        or obtain extensions of the maturities of all or some of such debt only on
        terms
        that significantly restrict our ability to operate, including terms that
        place
        limitations on our ability to incur other indebtedness, to pay dividends,
        to use
        our assets as collateral for other financings, to sell assets or to make
        acquisitions or enter into other transactions. Such restrictions may adversely
        affect our ability to finance our future operations or to engage in other
        business activities. If we finance the repayment of our outstanding indebtedness
        by issuing additional equity or convertible debt securities, such issuances
        could result in substantial dilution to our stockholders.
  28
  **Item
        2.**  **Unregistered
        Sale of Equity Securities and Use of Proceeds**
 
 Other
        than as reported in our Reports on Form 8-K dated February 2, 2007, February
        15,
        2007 and February 28, 2007, there were no sales of unregistered securities
        during the quarter ended March 31, 2007.
 
 **Item
        3.**  **Defaults
        Upon Senior Securities**
 
 None.
 
 **Item
        4.**  **Submission
        of Matters to a Vote of Security Holders**
 
 None.
 
 **Item
        5.**  **Other
        Information**
 
 The
        Notes
        we issued to Sigma Opportunity Fund, LLC, Pacific Asset Partners, LP, Operis
        Partners I, LLC and Sigma Berliner, LLC **** contained
        provisions that would have reduced the conversion price for the Notes to
        as low
        as $0.50 if the Company failed to achieve certain revenue and EBITDA targets
        for
        the year ending June 30, 2007. Due to the Company’s performance since the
        issuance of the Notes, the Selling Shareholders have waived this adjustment
        provision under the terms of the Notes.
 
 **Item
        6.**  **Exhibits**
 
 (a)
              Exhibits
  4.1
              Letter
                  Agreement, dated May 14, 2007, to waive certain conversion adjustments
                  of  Berliner Communications, Inc.'s 7% Senior Subordinated Secured
                  Convertible Note Due 2008. *
  31.1
              Certification
                  of the Principal Executive Officer pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002. *
 
 31.2
              Certification
                  of the Principal Accounting Officer pursuant to Section 302 of
                  the
                  Sarbanes-Oxley Act of 2002. *
  32.1
              Certification
                  of our Principal Executive Officer, Principal Financial Officer
                  and
                  Principal Accounting Officer pursuant to 18 U.S.C. Section 1350,
                  as
                  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
                  *
  *
        Filed
        herewith.
  29
  **SIGNATURES**
 
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, Berliner
        Communications, Inc. has duly caused this report to be signed on its behalf
        by
        the undersigned, thereunto duly authorized.
  BERLINER
                  COMMUNICATIONS, INC.Date: May 15, 2007
              By:
              /s/
                Richard B. BerlinerRichard
                  B. Berliner
                Chief
                  Executive Officer
                (Principal
                  Executive Officer)  Date: May 15, 2007
                By:
                /s/
                  Albert E. GencarellaAlbert
                      E. Gencarella
                    Chief
                      Financial Officer
                    (Principal
                      Financial Officer)
  30