##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2006
 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.
  Delaware
    
    75-2233445(State or Other Jurisdiction of Incorporation)
    
    (I.R.S. Employer Identification No.)
 20 Bushes Lane
Elmwood Park, New Jersey 07407
 (201) 791-3200
 Yes þ No o
  o o þ
 Yes o No þ




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##### 



BERLINER COMMUNICATIONS, INC.
 QUARTERLY REPORT ON FORM 10-Q
INDEX
 PAGE NO.PART I:
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsConsolidated Balance Sheets as of September 30, 2006, and June 30, 2006
    
    
    3Consolidated Statements of Operations for the three months ended September 30, 2006, and 2005
    
    
    4Consolidated Statements of Cash Flows for the three months ended September 30, 2006, and 2005
    
    
    5Consolidated Statements of Stockholders Equity
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    18Item 4.
    
    Controls and Procedures
    
    
    18PART II:
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    18Item 1A.
    
    Risk Factors
    
    
    18Item 2.
    
    Unregistered Sale of Equity Securities and Use of Proceeds
    
    
    23Item 3.
    
    Defaults Upon Senior Securities
    
    
    23Item 4.
    
    Submission of Matters to a Vote of Securities Holders
    
    
    23Item 5.
    
    Other Information
    
    
    23Item 6.
    
    Exhibits
    
    
    23SIGNATURES
    
    
    24Exhibit 10.24Exhibit 10.25Exhibit 31.1Exhibit 31.2Exhibit 31.3Exhibit 32.1
   2




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BERLINER COMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    June 30,2006
    
    
    2006(Unaudited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    413,428
    
    
    $
    534,350Accounts receivable, net of allowance for doubtful
accounts of $199,525 at September 30, 2006 and
$179,535 at June 30, 2006
    
    
    9,197,607
    
    
    
    12,333,892Inventories
    
    
    315,785
    
    
    
    322,029Prepaid expenses and other current assets
    
    
    418,890
    
    
    
    331,54610,345,710
    
    
    
    13,521,817LONG-TERM ASSETSProperty and equipment, net
    
    
    522,467
    
    
    
    565,592Other assets
    
    
    95,729
    
    
    
    168,210$
    10,963,906
    
    
    $
    14,255,619LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESLine of credit
    
    $
    633,904
    
    
    $
    1,110,803Current portion of long-term debt
    
    
    213,152
    
    
    
    373,856Current portion of capital lease obligations
    
    
    30,213
    
    
    
    33,105Accounts payable
    
    
    4,012,160
    
    
    
    5,355,827Accrued liabilities
    
    
    3,181,836
    
    
    
    3,908,803Accrued income taxes
    
    
    8,817
    
    
    
    127,9278,080,082
    
    
    
    10,910,321LONG-TERM LIABILITIESLong-term debt, net of current portion
    
    
    148,854
    
    
    
    162,769Long-term capital lease obligations, net of current portion
    
    
    17,324
    
    
    
    24,081166,178
    
    
    
    186,850COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    STOCKHOLDERS EQUITYPreferred stock
    
    
    
    
    
    
    Common stock
    
    
    341
    
    
    
    341Additional paid-in capital
    
    
    13,139,133
    
    
    
    13,018,241Accumulated deficit
    
    
    (10,421,828
    )
    
    
    (9,860,134
    )2,717,646
    
    
    
    3,158,448$
    10,963,906
    
    
    $
    14,255,619
 The accompanying notes are an integral part of these financial statements.
  3




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BERLINER COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
 Three months endedSeptember 30,2006
    
    
    2005(Unaudited)
    
    
    (Unaudited)Revenues
    
    $
    7,805,165
    
    
    $
    8,657,365Costs of revenues
    
    
    5,716,580
    
    
    
    6,217,550Gross margin
    
    
    2,088,585
    
    
    
    2,439,815Selling, general and administrative
expenses
    
    
    2,580,908
    
    
    
    2,043,747Depreciation
    
    
    56,879
    
    
    
    61,136(Gain) loss on sale of fixed assets
    
    
    2,517
    
    
    
    (250
    )Income (loss) from operations
    
    
    (551,719
    )
    
    
    335,182Other (income) expenseInterest expense
    
    
    29,073
    
    
    
    9,571Interest income
    
    
    (4,610
    )
    
    
    (2,846
    )Loss in equity of investments
    
    
    
    
    
    
    65,747Other
    
    
    (14,488
    )
    
    
    400Income (loss) before income taxes
    
    
    (561,694
    )
    
    
    262,310Income tax expense
    
    
    
    
    
    
    800Net income (loss)
    
    
    (561,694
    )
    
    
    261,510Deemed Series B and D preferred dividends
    
    
    
    
    
    
    19,935,779Net loss allocable to common shareholders
    
    $
    (561,694
    )
    
    $
    (19,674,269
    )Net loss per share  basic and diluted
    
    $
    (0.03
    )
    
    $
    (5.90
    )Weighted average number of shares
outstanding  basic and diluted
    
    
    17,034,857
    
    
    
    3,335,393
 The accompanying notes are an integral part of these financial statements.
  4




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BERLINER COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three months endedSeptember 30,2006
    
    
    2005(Unaudited)
    
    
    (Unaudited)Cash flows from operating activitiesNet income (loss)
    
    $
    (561,694
    )
    
    $
    261,510Adjustments to reconcile net income (loss)
to net cash provided by operationsDepreciation
    
    
    56,879
    
    
    
    61,136Loss in equity of investments
    
    
    
    
    
    
    65,747Bad debt expense
    
    
    20,000
    
    
    
    44,186Stock based compensation
    
    
    120,892
    
    
    
    (Gain) loss on sale of fixed assets
    
    
    2,517
    
    
    
    (250
    )Changes in operating assets and liabilitiesAccounts receivable
    
    
    3,116,285
    
    
    
    (2,137,012
    )Inventories
    
    
    6,244
    
    
    
    26,097Prepaid expenses and other current assets
    
    
    (87,343
    )
    
    
    96,167Other assets
    
    
    72,481
    
    
    
    39,270Accounts payable
    
    
    (1,343,667
    )
    
    
    728,211Accrued liabilities
    
    
    (726,967
    )
    
    
    962,254Income taxes payable
    
    
    (119,110
    )
    
    
    Net cash provided by operating
activities
    
    
    556,517
    
    
    
    147,316Cash flow from investing activitiesPurchase of property and equipment
    
    
    (16,272
    )
    
    
    (110,592
    )Proceeds from the sale of property and equipment
    
    
    1
    
    
    
    250Net cash used in investing activities
    
    
    (16,271
    )
    
    
    (110,342
    )Cash flows from financing activitiesProceeds from line of credit
    
    
    1,444,189
    
    
    
    798,011Proceeds from long-term debt
    
    
    
    
    
    
    44,033Proceeds from capital leases
    
    
    
    
    
    
    17,370Repayment of line of credit
    
    
    (1,921,088
    )
    
    
    (745,496
    )Repayment of long-term debt
    
    
    (174,619
    )
    
    
    (87,185
    )Repayment of capital leases
    
    
    (9,650
    )
    
    
    (12,129
    )Net cash (used in) provided by financing activities
    
    
    (661,168
    )
    
    
    14,604Net (decrease) increase in cash and cash equivalents
    
    
    (120,922
    )
    
    
    51,578Cash and cash equivalents at beginning of period
    
    
    534,350
    
    
    
    402,432Cash and cash equivalents at end of period
    
    $
    413,428
    
    
    $
    454,010Supplemental disclosure of cash flow informationInterest paid
    
    $
    29,073
    
    
    $
    9,571Income taxes paid
    
    $
    119,110
    
    
    $
    800
 The accompanying notes are an integral part of these financial statements.
  5




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##### Table of Contents



BERLINER COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 Preferred Stock
    
    
    Common Stock25,000,000 shares authorized;
    
    
    200,000,000 shares authorized
    
    
    Additional
    
    
    
    
    
    
    Total$0.00002 par value
    
    
    $0.00002 par value
    
    
    Paid-in
    
    
    Accumulated
    
    
    Stockholders'Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Equity(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Balance at June 30, 2006
    
    
    
    
    


$
    
    
    
    
    17,034,857
    
    
    $
    341
    
    
    $
    13,018,241
    
    
    $
    (9,860,134
    )
    
    $
    3,158,448Stock based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120,892
    
    
    
    
    
    
    
    120,892Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (561,694
    )
    
    
    (561,694
    )Balance at September 30, 2006
    
    
    
    
    
    $
    
    
    
    
    17,034,857
    
    
    $
    341
    
    
    $
    13,139,133
    
    
    $
    (10,421,828
    )
    
    $
    2,717,646
 The accompanying notes are an integral part of these financial statements.
  6




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##### Table of Contents



BERLINER COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. History and Description of Business
    2. Basis of Presentation
  3. Accounting Policies
 Use of Estimates.
 Revenue Recognition.
 Risks and Uncertainties.
  7




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Income (Loss) Per Share Earnings Per Share
 ,
 Stock-based Compensation. Accounting for Stock Issued to
Employees Accounting for Stock-Based
Compensation
 Share-Based Payment,
   4. Accounts Receivable
  September 30,
    
    
    June 30,2006
    
    
    2006(Unaudited)Accounts receivable
    
    $
    7,586,435
    
    
    $
    9,723,178Unbilled receivables
    
    
    1,810,697
    
    
    
    2,790,2499,397,132
    
    
    
    12,513,427Allowance for doubtful accounts
    
    
    (199,525
    )
    
    
    (179,535
    )Total
    
    $
    9,197,607
    
    
    $
    12,333,892
  8




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##### Table of Contents



5. Inventories
  6. Accrued Liabilities
  September 30,
    
    
    June 30,2006
    
    
    2006(Unaudited)Employee compensation
    
    $
    392,379
    
    
    $
    536,015Construction costs
    
    
    2,562,914
    
    
    
    3,179,061Other
    
    
    226,543
    
    
    
    193,727$
    3,181,836
    
    
    $
    3,908,803
 7. Revolving Credit Facility
   8. Recapitalization of Berliner Communications
  
    
    To increase the aggregate number of shares that we will have the authority to
issue from
225,000,000 to 6,600,000,000 shares, of which 6,000,000,000 shares will be shares of
Common Stock, and 600,000,000 shares will be shares of Preferred Stock;
    
    To change the name from Novo Networks, Inc. to Berliner Communications, Inc.;
  9




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##### Table of Contents




    
    To amend the Certificate of Designation, Preferences and Rights of Series B
Convertible Preferred Stock to reduce the conversion price of the Series B
Convertible Preferred Stock to $0.014018, and thereby increase the number of shares
of Common Stock issuable upon conversion of such shares of the Series B Convertible
Preferred Stock to 321,015,546 (in the quarter ended September 30, 2005, we
recorded a deemed dividend of approximately $6.4 million 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 shareholders);
    
    To amend the Certificate of Designation, Preferences and Rights of Series D
Convertible Preferred Stock to reduce the conversion price of the Series D
Convertible Preferred Stock to $0.014018, and thereby increase the number of shares
of Common Stock issuable upon conversion of such shares of the Series D Convertible
Preferred Stock to 675,773,394 (in the quarter ended September 30, 2005, we
recorded a deemed dividend of approximately $13.5 million 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 shareholders);
    
    To provide that, upon the filing of the Certificate of Amendment, all shares of
the Series B Convertible Preferred Stock, Series D Convertible Preferred Stock, and
Series E Convertible Preferred Stock will be automatically converted into Common
Stock;
    
    To effect a 1:300 reverse stock split, such that the outstanding shares of
Common Stock and Convertible Preferred Stock will be reclassified and one new share
of Common Stock will be issued for every 300 shares of existing Common Stock (which
has been retroactively reflected in the accompanying Balance Sheet); and
    
    To amend the Certificate of Incorporation, such that, after giving effect to the
reverse stock split, the aggregate number of shares that we will have the authority
to issue is 22,000,000 shares, of which 20,000,000 shares will be shares of Common
Stock, and 2,000,000 shares will be shares of Preferred Stock.
  9. Stock Compensation
    10




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2001 Plan
    
    
    1999 Plan
    
    
    Non-PlanWeighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageNumber
    
    
    Exercise
    
    
    Number
    
    
    Exercise
    
    
    Number
    
    
    Exerciseof Shares
    
    
    Price
    
    
    of Shares
    
    
    Price
    
    
    of Shares
    
    
    PriceOutstanding at June 30, 2006
    
    
    17,724
    
    
    $
    1,387.50
    
    
    
    483,300
    
    
    $
    22.53
    
    
    
    18,704
    
    
    $
    6,786.00Options granted at fair value value
    
    
    
    
    
    
    
    
    
    
    338,026
    
    
    $
    0.60
    
    
    
    Options exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    Options cancelled
    
    
    
    
    
    
    
    
    
    
    (26,825
    )
    
    $
    0.40
    
    
    
    Outstanding at September 30, 2006
    
    
    17,724
    
    
    $
    1,387.50
    
    
    
    794,501
    
    
    $
    13.94
    
    
    
    18,704
    
    
    $
    6,786.00Exercisable at September 30, 2006
    
    
    17,724
    
    
    $
    1,387.50
    
    
    
    435,751
    
    
    $
    25.09
    
    
    
    18,704
    
    
    $
    6,786.00
  2001 Plan
    
    
    1999 Plan
    
    
    Non-PlanWeighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageNumber
    
    
    Fair
    
    
    Number
    
    
    Fair
    
    
    Number
    
    
    Fairof Shares
    
    
    Value
    
    
    of Shares
    
    
    Value
    
    
    of Shares
    
    
    ValueBalance at June 30, 2006
    
    
    
    
    
    $
    
    
    
    
    271,125
    
    
    $
    0.41
    
    
    
    
    
    
    $
    Granted
    
    
    
    
    
    
    
    
    
    
    338,026
    
    
    $
    0.60
    
    
    
    Vested
    
    
    
    
    
    
    
    
    
    
    (238,026
    )
    
    $
    0.62
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    (12,375
    )
    
    $
    0.40
    
    
    
    Outstanding at September 30, 2006
    
    
    
    
    
    $
    
    
    
    
    358,750
    
    
    $
    0.44
    
    
    
    
    
    
    $
    
  11




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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
    
    $
    0.40
    
    
    to
    
    $
    0.55
    
    
    
    765,975
    
    
    
    205,675
    
    
    $
    0.40
    
    
    9.50 years$
    0.56
    
    
    to
    
    $
    2.00
    
    
    
    22,026
    
    
    
    22,026
    
    
    $
    1.46
    
    
    9.92 years$
    7.05
    
    
    
    167
    
    
    
    167
    
    
    $
    7.05
    
    
    7.79 years$
    8.01
    
    
    
    250
    
    
    
    250
    
    
    $
    8.01
    
    
    7.33 years$
    16.50
    
    
    
    4,083
    
    
    
    4,083
    
    
    $
    16.50
    
    
    6.33 years$
    3,000.00
    
    
    
    1,167
    
    
    
    1,167
    
    
    $
    3,000.00
    
    
    4.04 years$
    8,550.00
    
    
    
    833
    
    
    
    833
    
    
    $
    8,550.00
    
    
    4.46 yearsNon-Plan
    
    
    
    
    
    
    
    
    
    $
    3,600.00
    
    
    
    639
    
    
    
    639
    
    
    $
    3,600.00
    
    
    4.46 years$
    6,900.00
    
    
    
    18,065
    
    
    
    18,065
    
    
    $
    6,900.00
    
    
    4.50 years
 10. Related Party Transactions
  11. Legal Proceedings
   12




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##### Table of Contents



12. Segment Financial Data
  Three months endedSeptember 30,2006
    
    
    2005(Unaudited)
    
    
    (Unaudited)Revenues:Infrastructure construction and network services
    
    $
    5,372,013
    
    
    $
    7,956,641Real estate acquisition and zoning
    
    
    2,417,474
    
    
    
    689,160Other
    
    
    15,678
    
    
    
    11,564Total
    
    $
    7,805,165
    
    
    $
    8,657,365Operating income (loss):Infrastructure construction and network services
    
    $
    (845,870
    )
    
    $
    422,482Real estate acquisition and zoning
    
    
    284,998
    
    
    
    (88,250
    )Other
    
    
    9,153
    
    
    
    950$
    (551,719
    )
    
    $
    335,182
 
 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
  Forward-Looking Statements
   13




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##### Table of Contents




    
    our financial condition and strategic direction;
    
    our ability to continue as a going concern;
    
    our future capital requirements and our ability to satisfy our capital needs;
    
    the potential generation of future revenues;
    
    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 position in the wireless telecommunications industry;
    
    our competitive position; and
    
    other statements that contain words like believe, anticipate, expect and similar
expressions are also used to identify forward-looking statements.
  
    
    risks inherent in our ability to continue as a going concern;
    
    risks associated with competition in the wireless
telecommunications industry;
    
    risks that we will not be able to generate positive cash flow;
    
    BCIs function as an early stage company;
    
    risks that we may not be able to obtain additional financing;
    
    risks associated with Old Berliners history of losses;
    
    risks related to a concentration in revenues 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.
    14




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Summary of Operating Results
  Operating Data:
 Three months endedSeptember 30,2006
    
    
    2005(Unaudited)
    
    
    (Unaudited)Revenues
    
    $
    7,805,165
    
    
    $
    8,657,365Costs of revenues
    
    
    5,716,580
    
    
    
    6,217,550Gross margin
    
    
    2,088,585
    
    
    
    2,439,815Selling, general and
administrative expenses
    
    
    2,580,908
    
    
    
    2,043,747Depreciation
    
    
    56,879
    
    
    
    61,136(Gain) loss on sale of fixed assets
    
    
    2,517
    
    
    
    (250
    )Income (loss) from operations
    
    
    (551,719
    )
    
    
    335,182Other (income) expenseInterest expense
    
    
    29,073
    
    
    
    9,571Interest income
    
    
    (4,610
    )
    
    
    (2,846
    )Loss in equity of investments
    
    
    
    
    
    
    65,747Other
    
    
    (14,488
    )
    
    
    400Income (loss) before income taxes
    
    
    (561,694
    )
    
    
    262,310Income tax expense
    
    
    
    
    
    
    800Net income (loss)
    
    
    (561,694
    )
    
    
    261,510Deemed Series B and D preferred dividends
    
    
    
    
    
    
    19,935,779Net loss allocable to common shareholders
    
    $
    (561,694
    )
    
    $
    (19,674,269
    )Net loss per share  basic and diluted
    
    $
    (0.03
    )
    
    $
    (5.90
    )Weighted average number of shares
outstanding  basic and diluted
    
    
    17,034,857
    
    
    
    3,335,393Balance Sheet data:Cash and cash equivalents
    
    $
    413,428
    
    
    $
    454,010Working capital
    
    $
    2,265,628
    
    
    $
    1,428,473Total assets
    
    $
    10,963,906
    
    
    $
    9,482,772Long term liabilities
    
    $
    166,178
    
    
    $
    133,259Total liabilities
    
    $
    8,246,260
    
    
    $
    7,414,126Stockholders equity
    
    $
    2,717,646
    
    
    $
    2,068,646
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##### Table of Contents



Three months ended September 30, 2006, Compared to Three months ended September 30, 2005
 Revenues
 Costs of Revenues.
 Gross Margin.
 Selling, General and Administrative Expenses.
  Depreciation.
 Loss in Equity of Investments.
  16




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Income Taxes.
 Liquidity and Capital Resources
          17




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##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4.
    
    Controls and Procedures
  
 PART II: OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
 We may need additional working capital, the lack of which would likely have a significant negative
impact on our ability to grow our business.
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##### Table of Contents



Old Berliner has had a history of losses and may never achieve sustained profitability.
  If the percentage of our revenues derived from construction-related activities increases, our gross
margins may suffer.
  We generate a substantial portion of our revenues from a limited number of customers, and if our
relationships with such customers were harmed, our business would 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 revenues, which would negatively impact our ability to generate income as well as
result in lower profitability.
  If we experience delays and or defaults in customer payments, we could be unable to cover all
expenditures.
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##### Table of Contents



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.
  Our business is dependent upon our ability to keep pace with the latest technological changes.
  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.
   Further delays in the adoption and deployment of next generation wireless networks could negatively
affect the demand for our services and its ability to grow our revenues.
  We bear the risk of cost overruns in some of our contracts.
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##### Table of Contents



Our dependence on subcontractors and equipment manufacturers could adversely affect us.
  If we guarantee the timely completion or performance standard of a project, we could incur
significant, additional costs.
  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 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.
  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.
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##### Table of Contents



Intense competition in the engineering and construction industry could reduce our market share.
  We are vulnerable to the cyclical nature of the market we serve.
  We may experience significant fluctuations in our quarterly results as a result of uncertainties
relating to our ability to generate additional revenues, manage expenditures and other factors,
certain of which are outside of our control.
  
    
    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 generally.
  Our
stock price is volatile and purchasers of our common stock could
incur substantial losses.
  There is a lack of a public market for our common shares, which limits
our shareholders ability to sell their shares.
  Because Old Berliner experienced, and we 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.
  If we are unable to identify and complete future acquisitions, we may be unable to continue our
growth.
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##### Table of Contents



Item 2.
    
    Unregistered Sale of Equity Securities and Use of Proceeds
  
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
  
 Item 5.
    
    Other Information
  
 Item 6.
    
    Exhibits
  10.24
    
    Employment Agreement, dated as of August 1, 2005, between BCI
Communications, Inc. and Michael S. Guerriero. (compensatory agreement)10.25
    
    Employment Agreement, dated as of March 11, 2005, between BCI
Communications, Inc. and Robert Bradley. (compensatory agreement)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 Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002. *31.3
    
    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.
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##### Table of Contents



SIGNATURES
   Date: November 14, 2006
    By:
    /s/ Richard B. BerlinerRichard B. BerlinerChief Executive Officer
(Principal Executive Officer)Date: November 14, 2006
    By:
    /s/ Albert E. GencarellaAlbert E. GencarellaChief Financial Officer
(Principal Financial Officer)Date: November 14, 2006
    By:
    /s/ Patrick G. MackeyPatrick G. MackeySenior Vice President
(Principal Accounting Officer)  24




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description10.24
    
    
    Employment Agreement, dated as of August 1, 2005, between BCI
Communications, Inc. and Michael S. Guerriero. (compensatory agreement)10.25
    
    
    Employment Agreement, dated as of March 11, 2005, between BCI
Communications, Inc. and Robert Bradley. (compensatory agreement)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 Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.3
    
    
    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.
  25