UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)

þ		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the quarterly period ended September 30, 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 .


þ		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2008


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: 0-21213

LCC International, Inc.

(Exact name of registrant as specified in its charter)

Delaware		54-1807038
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)
(State or Other Jurisdiction of		(I.R.S. Employer Identification Number)
Incorporation or Organization)
7900 Westpark Drive, McLean, VA		22102
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (703) 873-2000

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 ~~o No~~ þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See ~~definition~~the definitions of “large accelerated filer,” ~~and large~~ “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer þ Non-accelerated filer o ~~Smaller reporting company o~~ (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in ~~Rule 12b~~ Rule12b-2 of the ~~Exchange~~ Exchange Act). Yes o No þ

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

As of ~~February~~ June 823, 2008, the registrant had outstanding 26,~~074~~594,~~687~~ 705 shares of Class A Common Stock, par ~~value~~ value $0.01 per share ~~(the “Class A Common Stock”)~~.

LCC INTERNATIONAL, INC. AND SUBSIDIARIES QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED March 31, 2008 INDEX

QUARTERLY REPORT ON FORM 10-Q


	Page
	Number
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
Condensed consolidated statements of operations for the three months ended March 31, 2008 and 2007 (unaudited)		3
Condensed consolidated balance sheets as of March 31, 2008 (unaudited) and December 31, 2007		4
Condensed consolidated statements of cash flows for the three months ended March 31, 2008 and 2007 (unaudited)		5
Notes to condensed consolidated financial statements (unaudited)		6
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		19
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		29
ITEM 4: CONTROLS AND PROCEDURES		30

PART II: OTHER INFORMATION
ITEM 1: Legal Proceedings		31
ITEM 1A: Risk Factors		31
ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds		31
ITEM 3: Defaults upon Senior Securities		31
ITEM 4: Submission of Matters to a Vote of Security Holders		31
ITEM 5: Other Information		31
ITEM 6: Exhibits		31

SIGNATURE		32

FOR THE QUARTER ENDED SEPTEMBER 30, 2007

INDEX

		Page
		Number
PART I:	FINANCIAL INFORMATION
ITEM 1:	FINANCIAL STATEMENTS		3
	Condensed consolidated statements of operations for the three and nine months ended September 30, 2007 and 2006 (unaudited)		3
	Condensed consolidated balance sheets as of September 30, 2007 (unaudited) and December 31, 2006		4
	Condensed consolidated statements of cash flows for the nine months ended September 30, 2007 and 2006 (unaudited)		5
	Notes to condensed consolidated financial statements (unaudited)		6
ITEM 2:	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		24
ITEM 3:	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		36
ITEM 4:	CONTROLS AND PROCEDURES		37
PART II:	OTHER INFORMATION		39
ITEM 1:	Legal Proceedings		39
ITEM 1A:	Risk Factors		39
ITEM 2:	Unregistered Sales of Equity Securities and Use of Proceeds		39
ITEM 3:	Defaults Upon Senior Securities		39
ITEM 4:	Submission of Matters to a Vote of Security Holders		39
ITEM 5:	Other Information		39
ITEM 6:	Exhibits		39

PART I: FINANCIAL INFORMATION Item 1: Financial Statements

Item 1: Financial Statements

LCC INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

	Three Months						Nine Months Ended
	Three Months Ended
	Ended September 30,						September 30,
	March 31,
	2007			2006			2007			2006
	2008			2007
REVENUES	$	41,~~834~~934		$	3124,~~933~~640		$	~~96,191~~		$	~~101,673~~
COST OF REVENUES (exclusive of depreciation shown separately below)		3531,~~543~~981			2220,~~671~~939			~~80,825~~			~~74,796~~
GROSS PROFIT		69,~~291~~953			93,~~262~~701			~~15,366~~			~~26,877~~
OPERATING EXPENSE:
Sales and marketing		3,~~899~~919			12,~~635~~907			~~10,453~~			~~5,325~~
General and administrative		67,~~364~~228			6,~~082~~340			~~18,834~~			~~18,545~~
Restructuring charge		~~303~~426			—			~~1,366~~			~~108~~
Depreciation and amortization		~~917~~1,242			~~673~~623			~~2,411~~			~~2,033~~
		11,483			8,390			33,064			26,011
		12,815			9,870
OPERATING INCOME (LOSS)		(5,192	)		872			(17,698	)		866
OPERATING LOSS		(2,862	)		(6,169	)
OTHER INCOME (EXPENSE):
Interest income		84			755			75			46
Interest expense		(1,~~258~~427	)		(~~171~~208	)		~~(1,999~~	)		~~(576~~	)
Other		(1,~~759~~438	)		~~934~~(265	)		~~(1,907~~	)		~~1,239~~
		(3,009	)		770			(3,831	)		709
		(2,861	)		(418	)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(8,201	)		1,642			(21,529	)		1,575
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(5,723	)		(6,587	)
PROVISION FOR INCOME TAXES		~~(633~~139	)		~~1,511~~647			~~355~~			~~3,379~~
INCOME (LOSS) FROM CONTINUING OPERATIONS		(7,568	)		131			(21,884	)		(1,804	)
LOSS FROM CONTINUING OPERATIONS		(5,862	)		(7,234	)
DISCONTINUED OPERATIONS:
Loss from discontinued operations (net of applicable taxes of zero)		(~~329~~327	)		(~~1,638~~502	)		~~(1,205~~	)		~~(2,707~~	)
Gain on disposal of discontinued operations (net of applicable taxes of zero)		—			—			—			922
Loss from disposal of discontinued operations (net of applicable taxes of zero)		—			(1,550	)
Adjustment to gain on disposal of discontinued operations (net of applicable taxes of zero)		—			(63	)		(1,550	)		(63	)
LOSS FROM DISCONTINUED OPERATIONS		(327	)		(2,052	)
LOSS FROM DISCONTINUED OPERATIONS		(329	)		(1,701	)		(2,755	)		(1,848	)
NET LOSS	$	(6,189	)	$	(9,286	)
NET LOSS	$	(7,897	)	$	(1,570	)	$	(24,639	)	$	(3,652	)
NET LOSS PER SHARE:
NET INCOME (LOSS) PER SHARE:
Continuing operations
Continuing operations
Basic and diluted	$	(0.22	)	$	(0.28	)
Basic and diluted	$	(0.24	)	$	0.01		$	(0.76	)	$	(0.07	)
Discontinued operations
Discontinued operations
Basic and diluted	$	(0.01	)	$	(0.08	)
Basic and diluted	$	(0.01	)	$	(0.07	)	$	(0.09	)	$	(0.08	)
Net loss per share
Net loss per share
Basic and diluted	$	(0.23	)	$	(0.36	)
Basic and diluted	$	(0.25	)	$	(0.06	)	$	(0.85	)	$	(0.15	)
WEIGHTED AVERAGE SHARES USED IN CALCULATION OF NET LOSS PER SHARE:
WEIGHTED AVERAGE SHARES USED IN CALCULATION OF NET (LOSS) PER SHARE:
Basic and diluted		26,813			25,679
Basic and diluted		31,090			24,981			28,979			24,848

See accompanying notes to condensed consolidated financial statements.

LCC INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

CONDENSED CONSOLIDATED BALANCE SHEETS


	March 31,			December 31,
	2008			2007
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	5,662		$	9,630
Restricted cash		437			220
Receivables, net of allowance for doubtful accounts of $387 and $279 at March 31, 2008 and December 31, 2007, respectively
Trade accounts receivable		38,346			43,943
Unbilled receivables		24,125			21,979
Due from related parties and affiliates		54			32
Due from disposal of business		—			1,800
Prepaid expenses and other current assets		4,335			4,100
Prepaid tax receivable and prepaid taxes		68			13
Assets held for sale		429			269

Total current assets		73,456			81,986
Property and equipment, net		5,276			5,949
Deferred income taxes, net		2,482			1,952
Goodwill		44,512			44,080
Other intangible assets net		15,535			15,875
Other assets		1,498			1,608

Total assets	$	142,759		$	151,450

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Lines of credit	$	24,590		$	2,561
Note payable		4,438			5,788
Accounts payable		18,257			14,287
Accrued expenses		12,105			19,706
Accrued employee compensation and benefits		6,838			7,171
Deferred revenue		699			1,767
Income taxes payable		1,934			1,921
Accrued restructuring		393			261
Other current liabilities		6,347			6,087
Liabilities held for sale		666			411

Total current liabilities		76,267			59,960
Lines of credit		79			22,025
Note payable		23,965			23,965
Accrued restructuring non-current		282			78
Other liabilities		793			735

Total liabilities		101,386			106,763

Commitments and contingencies
Shareholders’ equity:
Preferred stock:
10,000 shares authorized; 5,738 convertible shares issued and outstanding		57			57
Class A common stock; $.01 par value:
70,000 shares authorized; 26,433 shares issued and 26,273 shares outstanding and 26,234 shares issued and 26,074 shares outstanding at March 31, 2008 and December 31, 2007, respectively		265			262
Class B common stock; $.01 par value:
20,000 shares authorized; -0- shares issued and outstanding		—			—
Paid-in capital		133,339			133,089
Accumulated deficit		(102,441	)		(96,252	)

Subtotal		31,220			37,156
Accumulated other comprehensive income — foreign currency translation adjustments		11,035			8,413
Treasury stock (159 shares)		(882	)		(882	)

Total shareholders’ equity		41,373			44,687

Total liabilities and shareholders’ equity	$	142,759		$	151,450

(In thousands)

	September 30,			December 31,
	2007			2006
	(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents	$	5,459		$	6,445
Restricted cash		212			883
Receivables, net of allowance for doubtful accounts of $280 and $200 at September 30, 2007 and December 31, 2006, respectively
Trade accounts receivable		43,685			34,755
Unbilled receivables		25,657			24,807
Due (to)/from related parties and affiliates		69			3
Due from disposal of business		2,863			7,610
Deferred income taxes, net		23			118
Prepaid expenses and other current assets		4,701			3,798
Prepaid tax receivable and prepaid taxes		159			356
Assets held for sale		321			587
Total current assets		83,149			79,362
Property and equipment, net		5,931			2,779
Deferred income taxes, net		2,356			1,453
Goodwill		58,056			13,989
Other intangibles		44			293
Other assets		1,101			547
	$	150,637		$	98,423
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Lines of credit	$	1,325		$	1,038
Note payable		—			3,188
Accounts payable		14,533			17,224
Accrued expenses		19,069			13,867
Accrued employee compensation and benefits		7,123			6,545
Deferred revenue		1,924			119
Income taxes payable		1,726			2,082
Accrued restructuring current		988			949
Other current liabilities		6,108			597
Liabilities held for sale		454			263
Total current liabilities		53,250			45,872
Lines of credit		28,592			—
Note payable		21,584			—
Accrued restructuring noncurrent		149			87
Other liabilities		644			368
Total liabilities		104,219			46,327
Commitments and contingencies
Shareholders’ equity:
Preferred stock:
10,000 shares authorized; -0- shares issued and outstanding		—			—
Class A common stock; $.01 par value:
70,000 shares authorized; 31,288 shares issued and 31,129 shares outstanding and 25,803 shares issued and 25,644 shares outstanding at September 30, 2007 and December 31, 2006, respectively		313			258
Class B common stock; $.01 par value:
20,000 shares authorized; 0 shares and 0 shares issued and outstanding at September 30, 2007 and December 31, 2006, respectively		—			—
Paid-in capital		130,215			112,762
Accumulated deficit		(90,133	)		(63,470	)
Subtotal		40,395			49,550
Accumulated other comprehensive income — foreign currency translation adjustments		6,905			3,428
Treasury stock (159 shares)		(882	)		(882	)
Total shareholders’ equity		46,418			52,096
	$	150,637		$	98,423

See accompanying notes to condensed consolidated financial statements.

LCC INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)


	Three Months Ended
	March 31,
	2008			2007
Cash flows from operating activities:
Net loss	$	(6,189	)	$	(9,286	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		881			593
Provision (recovery) for doubtful accounts		129			(11	)
Loss on disposal of Network Deployment business		—			1,550
Non-cash share-based compensation		360			742
Restructuring charge		426			—
Loss on disposal of fixed assets		5			—
Changes in operating assets and liabilities:
Trade, unbilled, and other receivables		7,241			2,273
Accounts payable and accrued expenses		(6,346	)		(3,769	)
Other current assets and liabilities		1,576			3,860
Other non current assets and liabilities		10			1,129

Net cash used in operating activities		(1,907	)		(2,919	)

Cash flows from investing activities:
Purchases of property and equipment		(727	)		(1,324	)
Business acquisitions and investments		—			(4,094	)
Increase in restricted cash		(211	)		—

Net cash used in investing activities		(938	)		(5,418	)

Cash flows from financing activities:
Repurchase of common stock – restricted stock plan		(115	)		(263	)
Proceeds from exercise of options		—			110
Borrowings on lines of credit and notes payable		109			8,133
Payments on lines of credit and notes payable		(1,405	)		(2,370	)

Net cash provided by (used in) financing activities		(1,411	)		5,610

Effect of exchange rate changes on cash and equivalents		288			29
Net decrease in cash and cash equivalents		(3,968	)		(2,698	)
Cash and cash equivalents at beginning of period		9,630			6,445

Cash and cash equivalents at end of period	$	5,662		$	3,747

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	381		$	181
Income taxes	$	821		$	777
Supplemental disclosure of non-cash investing and financing activities:
Reduction in due from disposal of business and related note payable	$	—		$	2,611

	Nine Months Ended September 30,
Cash flows from operating activities:		2007			2006
Net loss	$	(24,639	)	$	(3,652	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,463			2,164
Provision (recovery) for doubtful accounts		(363	)		(29	)
Non-cash share-based compensation		1,329			1,303
Loss from investments in joint ventures, net		—			108
Loss on disposal of Network Deployment business		1,550			—
Loss on disposal of fixed assets		5			—
Restructuring charge (reversal)		1,361			(859	)
Changes in operating assets and liabilities:
Trade, unbilled, and other receivables		4,217			10,784
Accounts payable and accrued expenses		(5,938	)		(18,380	)
Other current assets and liabilities		6,046			(2,712	)
Other non current assets and liabilities		(4,456	)		223
Net cash used in operating activities		(18,425	)		(11,050	)
Cash flows from investing activities:
Purchases of property and equipment		(3,835	)		(974	)
Business acquisitions and investments, net of cash acquired		(24,113	)		—
Proceeds from sale of business		—			985
Net cash used in investing activities		(27,948	)		11
Cash flows from financing activities:
Proceeds from issuance of common stock, net		15,838			—
Proceeds from exercise of options		341			608
Proceeds from line of credit		37,515			11,182
Payments on line of credit		(8,777	)		(13,230	)
Proceeds from note payable					4,200
Net cash provided by financing activities		44,917			2,760
Effect of exchange rate changes on cash and equivalents		470			314
Net decrease in cash and cash equivalents		(986	)		(7,965	)
Cash and cash equivalents at beginning of period		6,445			14,196
Cash and cash equivalents at end of period	$	5,459		$	6,231
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	1,475		$	515
Income taxes	$	1,964		$	2,382
Supplemental disclosures of non cash investing and financing activities:
Reduction in due from disposal of business and related note payable	$	3,188		$	—
Note payable issued in connection with business acquisition	$	21,584		$	—

See accompanying notes to condensed consolidated financial statements

LCC INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (UNAUDITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. DESCRIPTION OF OPERATIONS AND BASIS OF PRESENTATION

LCC International, Inc., a Delaware corporation, was formed in 1983. Unless the context indicates otherwise, the terms the “Company”, “we”, “us”, and “our” refer herein to LCC International, Inc. and its subsidiaries.

The Company provides integrated end-to-end solutions for wireless voice and data communications networks with offerings ranging from high level technical consulting, to system ~~design~~ design and optimization services, toongoing ~~deployment~~operations and ~~ongoing~~maintenance ~~operations~~ services and, ~~maintenance~~in certain countries, deployment services. The Company has been successful in using initial opportunities to provide high level technical consulting services to secure later-stage system design and ~~network~~ network optimization contracts. Engagements to provide design services also ~~assist~~create inopportunities ~~securing~~for ~~ongoing~~the Company ~~deployment~~to aspropose ~~well~~on as operations and maintenance projects including network optimization contracts as well as other services. The Company’s technical consulting, system design and network optimization practices position it well to capitalize on additional opportunities as new technologies are developed and wireless service providers upgrade their existing networks, deploy the latest available technologies, and respond to changes in how customers use wireless services.

The accompanying condensed consolidated financial statements include the results of LCC International, Inc. and its direct and indirect wholly-owned subsidiaries that provide services outside Europe, the Middle East and Africa (collectively the “Americas”) and the results of LCC United Kingdom, Ltd., and its affiliated companies that provide services in Europe, the Middle East and Africa (collectively “EMEA”); and other non service related subsidiaries. LCC International , Inc. and its subsidiaries are collectively referred to as the “Company.” All material ~~intercompany~~ inter-company transactions and balances have been eliminated in the condensed consolidated financial statements.

The accompanying financial data as of ~~September~~March 3031, ~~2007~~ 2008 and for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2007~~ 2008 and ~~2006~~2007 have been prepared by the Company, without audit, in accordance with U.S. ~~generally~~ generally accepted accounting principles (“U.S. GAAP”) and disclosure requirements for interim financial information and the requirements of Form 10-Q. Certain information and footnote disclosures normally included in audited financial statements prepared in accordance with ~~generally~~ ~~accepted~~U.S. ~~accounting~~GAAP ~~principles~~ have been condensed or omitted pursuant to such rules and regulations. These ~~condensed~~ condensed consolidated financial statements should be read in conjunction with the Company’s audited December 31, ~~2006~~2007 financial statements, including the notes thereto, and the other information set forth in the Company’s Annual Report on Form 10-K.

As of March 31, 2008, the Company had an accumulated deficit of approximately $102.4 million, has incurred a loss in the quarter then ended of $6.2 million and used $1.9 million in operating cash flows for the three months then ended. The Company had approximately $5.7 million in cash, a significant portion of which is not readily available due to being located in certain foreign locations and approximately $1.3 million of borrowing availability under its debt facilities.

Despite a working capital deficit of $2.8 million, the Company believes that the availability under its bank lines of credit and working capital, excluding the $21.9 million of debt that was reclassified in accordance with U.S. GAAP, will provide sufficient cash flow to carry out its operations for the next 12 months.

Should the Company not have access to certain cash balances or be able to convert working capital, mentioned above, to cash when needed the Company will raise additional funding to continue to pursue its current business plan.

Should this occur, Management believes that the Company has access to capital resources through possible public or private equity offerings or debt financings The Company is not currently in any discussions with potential lenders to raise any such additional funds. As such, it cannot provide any assurance that new financing will be available on commercially acceptable terms, if at all. If the Company needs to raise such additional capital and is unable to, it will be required to curtail its operations and if these measures fail, it may not be able to continue its business. Curtailment of operations would cause significant delays in the Company’s efforts to realize its business plan and potentially impact future operations of the Company.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates are used in accounting for, among other things, long-term contracts, allowance for doubtful accounts, accrual of income taxes, recoverability of investments in affiliates and ~~the~~ the accrual of restructuring charges. Actual results could differ from these estimates.

In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation of the Company’s financial ~~condition~~position, the results of its operations and its cash flows for the periods indicated. The results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, 2008 ~~2007~~ are not necessarily indicative of the operating results that may be expected for the year ending December 31, ~~2007~~2008.

Significant accounting policies are as follows:

Cash Equivalents and Restricted Cash Cash equivalents include all highly liquid investments purchased with original maturities of three months or less and include overnight repurchase agreements, short-term notes, and short-term money market funds. Restricted cash is composed primarily of performance and or bid bonds in our EMEA region. At September 30, 2007, the Company had $4.3 million in foreign bank accounts.

~~Concentration~~Significant ofaccounting ~~Credit~~policies ~~Risk Financial instruments~~are ~~that~~as potentially expose us to concentration of credit risk consist primarily of trade receivables. The Company sells services globally. Generally, the Company does not require collateral or other security to support customer receivables. The Company performs ongoing credit evaluations of its customers’ financial condition and maintains a provision for doubtful accounts related to potential credit losses. The Company had the following significant concentrations of trade receivables from customers located outside the United States at September 30, 2007 and December 31, 2006follows:

	September 30,		December 31,
	2007		2006
	(in thousands)
Europe	$	13,705	$	10,206
Middle East/Africa	$	17,742	$	19,990
Asia-Pacific	$	110	$	288

Cash Equivalents and Restricted Cash. Cash equivalents include all highly liquid investments purchased with original maturities of three months or less and include overnight repurchase agreements, short-term notes, and short-term money market funds. At March 31, 2008 and December 31, 2007, the Company had $5.6 million and $4.6 million of cash in foreign bank accounts, respectively. Restricted cash is composed primarily of performance and or bid bonds in our EMEA region.

~~The~~ Concentration ~~Company’s~~of ~~existing~~Credit ~~and~~Risk ~~potential~~Financial ~~customer~~instruments ~~base~~that ~~is diverse~~potentially ~~and~~expose ~~includes start-up companies~~us ~~and~~to ~~foreign~~concentration of ~~enterprises.~~credit ~~The~~risk ~~Company~~consist ~~derived approximately~~primarily ~~64.6%~~of ~~and~~trade 81receivables.8% ofThe ~~its~~Company ~~revenues~~sells ~~from~~services ~~its ten~~globally. ~~largest~~Generally, ~~customers~~the ~~for~~Company ~~the~~does ~~three~~not ~~months~~require ~~ended~~collateral ~~September 30, 2007~~or ~~and~~other ~~September 30,~~security ~~2006,~~to ~~respectively~~support customer receivables. The Company ~~derived~~ ~~approximately~~performs ~~64.7%~~ongoing ~~and~~credit ~~82.6%~~evaluations of its ~~revenues~~customers’ ~~from~~financial ~~its~~condition ~~ten~~and ~~largest~~maintains ~~customers~~an allowance for ~~the~~doubtful ~~nine~~accounts ~~months~~related ~~ended September 30,~~to ~~2007~~potential ~~and~~credit ~~September 30,~~losses. ~~2006,~~The Company ~~respectively.~~had ~~These~~the ~~ten~~following ~~largest~~significant ~~customers~~concentrations ~~constituted~~of ~~63.8%~~trade ~~and 80.3%~~receivables offrom ~~our~~customers ~~net~~located ~~receivable~~outside the ~~balance~~United asStates ofat ~~September~~March 3031, ~~2007~~ 2008 and December 31, ~~2006, respectively.~~2007:

Although the Company believes that the diversity of its customer base has historically minimized the risk of incurring material losses due to concentrations of credit risk, the Company may be exposed to a declining customer base in periods of market downturns, severe competition, exchange rate fluctuations or other international developments.


	March 31,		December 31,
	2008		2007
	(in thousands)
Europe	$	16,563	$	14,934
Middle East/Africa	$	13,954	$	16,085
Asia-Pacific	$	110	$	110

~~Fair~~ The ~~Value~~Company’s ofexisting ~~Financial~~and ~~Instruments The carrying~~potential ~~amounts~~customer ofbase ~~financial~~is ~~instruments,~~diverse ~~including~~and ~~cash~~includes ~~and~~start-up companies ~~cash~~and ~~equivalents,~~foreign ~~receivables,~~enterprises. ~~restricted~~The ~~cash,~~Company ~~accrued expenses,~~derived ~~and~~approximately ~~accounts~~61.4% ~~payable,~~and ~~approximated~~75.3% ~~fair~~of ~~value~~its asrevenues offrom its ~~September 30,~~ten ~~2007~~largest ~~and~~customers ~~December 31,~~for ~~2006~~the ~~because~~three ofmonths ~~the relatively~~ended ~~short~~March 31, ~~duration~~2008 ofand ~~these~~2007, ~~instruments~~respectively. ~~The~~These ~~carrying~~ten ~~value~~largest ofcustomers ~~the~~constituted ~~borrowing~~33.9% ~~facilities~~and ~~approximated~~62.9% ~~the~~of ~~fair~~our ~~value~~net ~~as the~~receivable ~~instruments~~balance ~~included~~as aof ~~market~~March 31, ~~rate~~2008 and ofDecember 31, ~~interest~~2007, respectively.

~~Inventory Inventories~~ Although ~~are~~the ~~stated~~Company atbelieves that the ~~lower~~ diversity of ~~cost~~its orcustomer ~~market,~~base ~~net~~may minimize the risk of incurring anmaterial ~~allowance~~losses ~~for~~due ~~excess,~~to ~~slow-moving and~~concentrations ~~obsolete~~of ~~inventory~~credit risk, ~~and~~the ~~are~~Company ~~included~~may inbe ~~prepaid~~exposed ~~expenses~~to ~~and~~a ~~other~~declining ~~current~~customer ~~assets~~base in ~~the~~periods ~~accompanying~~of ~~consolidated~~market ~~balance sheet.~~downturns, ~~Cost~~severe ~~typically~~competition, ~~includes~~exchange ~~materials and equipment supplies~~rate ~~and~~fluctuations isor onother ~~a first-in, first-out~~international ~~basis~~developments.

Fair Value of Financial Instruments The carrying amounts of financial instruments, including ~~Property~~cash and ~~Equipment Property~~cash equivalents, receivables, restricted cash, accrued expenses, and ~~equipment~~accounts payable, ~~are~~approximated ~~stated~~fair atvalue ~~cost~~as of March 31, ~~less~~2008 anand ~~allowance~~December 31, ~~for~~2007 ~~depreciation~~because ~~and~~of the relatively short ~~amortization~~duration of these instruments. ~~Replacements~~The ~~and~~carrying ~~major~~value ~~improvements~~of ~~are~~the borrowing facilities approximated the fair ~~capitalized;~~value ~~maintenance~~as ~~and~~the ~~repairs~~instruments ~~are~~included ~~charged~~a tomarket ~~expense~~rate ~~as incurred~~of interest.

Inventory Inventories are stated at the lower of cost or market, net of an allowance for excess, slow-moving and obsolete inventory, and are included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheet. Cost typically includes materials and equipment supplies and is on a first-in, first-out basis.

Property and Equipment Property and equipment are stated at cost, less an allowance for depreciation and amortization. Replacements and major improvements are capitalized; maintenance and repairs are charged to expense as incurred. Internally developed software costs are capitalized in accordance with the American Institute of Certified Public Accountants Statement of Position 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.”

Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets per the table below.


Computer equipment		3 years
Software		3 years
Furniture and office equipment		3 to 7 years
Leasehold improvements		Shorter of the term of the lease or estimated useful life
Vehicles		5 years

Impairment of Long-Lived Assets The Company’s policy is to review its long-lived assets, (other than goodwill, see below) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with Statement of of Financial Accounting Standards (“SFAS”), ~~SFAS~~ No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets”, (“SFAS No. 144”). The Company recognizes an impairment loss when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. ~~The~~ The measurement of the impairment losses to be recognized is based upon the difference between the fair value and the carrying amount of the assets.

Business Combinations. The Company is required to allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. This valuation requires management to make significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain of the intangible assets and subsequently assessing the realizability of such assets include, but are not limited to, future expected cash flows from the revenues, customer contracts and discount rates. Management’s estimates of fair value are based on assumptions believed to be reasonable but which are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate and unanticipated events and circumstances may occur.

Other estimates associated with the accounting for these acquisitions and subsequent assessment of impairment of the assets may change as additional information becomes available regarding the assets acquired and liabilities assumed.

Goodwill and Other Intangible Assets Goodwill represents the excess of costs over fair value of assets of businesses acquired. The Company adopted the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”), as of January 1, 2002. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144.

Allowance for Doubtful Accounts. The Company makes estimates of the probability of collection of accounts receivable by specifically analyzing customer balances concentrations, credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts.

~~Goodwill~~ Revenue ~~and~~Recognition ~~Other~~The ~~Intangible~~Company’s ~~Assets Goodwill represents~~principal ~~the~~sources ~~excess~~ of ~~costs~~revenues ~~over~~are ~~fair~~technical ~~value~~consulting, engineering ofdesign ~~assets~~and ~~of businesses~~optimization ~~acquired~~and, in EMEA, network deployment services. The Company recognizes ~~adopted~~revenues ~~the~~from ~~provisions~~long-term ~~of SFAS No. 142,~~fixed-price ~~“Goodwill~~contracts ~~and~~using ~~Other~~the ~~Intangible Assets”,~~percentage-of-completion ~~(“SFAS No~~method. ~~142”),~~ Under asthe percentage-of ~~January 1~~-completion method, ~~2002.~~revenues ~~Goodwill~~are ~~and~~recognized ~~intangible~~based ~~assets~~on ~~acquired~~the inratio of individual contract costs incurred to date on a ~~purchase~~project ~~business~~compared ~~combination~~with ~~and~~total ~~determined~~estimated tocontract ~~have~~costs. anThe ~~indefinite~~Company ~~useful~~compares ~~life~~costs ~~are~~incurred ~~not~~to ~~amortized,~~date ~~but~~to ~~instead~~progress ~~tested~~achieved ~~for~~against project milestones to ~~impairment~~determine atif ~~least~~the ~~annually~~percentage inof ~~accordance~~completion ~~with~~is ~~the~~reasonable. ~~provisions~~Anticipated contract losses are recognized ofas ~~SFAS No. 142.~~soon ~~SFAS No~~as they become known and estimable. ~~142~~ The Company also ~~requires~~recognizes revenues on time and ~~that~~materials ~~intangible~~contracts ~~assets~~as ~~with~~the ~~estimable~~services ~~useful~~are ~~lives~~performed. beRevenues ~~amortized~~earned but not yet billed are reflected ~~over~~as ~~their~~unbilled ~~respective~~receivables ~~estimated~~in ~~useful~~the ~~lives~~accompanying tocondensed ~~their~~consolidated ~~estimated~~balance sheets. The Company ~~residual~~expects ~~values,~~substantially all unbilled and ~~reviewed~~billed ~~for~~receivables ~~impairment~~to inbe ~~accordance~~collected ~~with SFAS No~~within one year. ~~144.~~

~~Revenue~~ In ~~Recognition~~EMEA, ~~The~~the Company’s ~~principal sources~~generally ofreceives ~~revenues~~purchase ~~are~~orders ~~technical~~for ~~consulting,~~individual ~~engineering~~cell ~~design and~~sites ~~optimization~~based ~~and, in EMEA, network deployment services. The~~on ~~Company~~agreed ~~recognizes~~upon ~~revenues from long-term~~ fixed~~-price~~ ~~contracts using~~prices ~~the percentage-of-completion method.~~for ~~Under~~types ~~the percentage-~~of~~-completion~~ ~~method,~~standard ~~revenues~~cell ~~are recognized~~sites. ~~based~~Non-standard onservices ~~the~~related ~~ratio~~to ofa ~~individual contract costs~~cell ~~incurred~~site toare ~~date~~priced on a ~~project~~variable ~~compared~~basis ~~with~~using ~~total~~either ~~estimated contract~~agreed ~~costs.~~upon ~~The~~rates ~~Company~~per ~~compares~~hour ~~costs~~or ~~incurred~~a torate ~~date~~schedule tofor ~~progress~~such ~~achieved~~non-standard ~~against~~services. ~~project~~Deployment ~~milestones to determine if the percentage~~ of ~~completion~~cell issites ~~reasonable.~~may ~~Anticipated~~take ~~contract losses~~up ~~are~~to ~~recognized~~several asmonths ~~soon as they become known~~ and ~~estimable.~~ ~~The Company also recognizes~~ revenues ~~on time~~ and ~~materials~~costs ~~contracts as the services~~ are ~~performed.~~recognized ~~Revenues earned~~on ~~but~~a ~~not~~percentage ~~yet~~of ~~billed~~completion ~~are~~basis ~~reflected~~based asupon ~~unbilled receivables in~~ the ~~accompanying consolidated balance sheets. The~~ Company ~~expects~~’s ~~substantially all unbilled and billed receivables to be~~engineering ~~collected within one year~~estimates.

Income Taxes Income taxes are determined in accordance with SFAS No. 109, “Accounting for Income Taxes.” Under this statement, temporary differences arise as a result of the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Certain of the Company’s international operations are subject to local income taxation. Currently, the Company is subject to taxation on income from certain operations in Europe, Latin America, the Far East, the Middle East and the non-U.S. portions of North America where the Company has subsidiaries, has established branch offices or has performed significant services that constitute a “permanent establishment” for tax reporting purposes. The foreign taxes paid or accrued by the Company may represent a potential credit for the Company against our U.K. or U.S. federal income taxes.

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes — An Interpretation of FASB ~~Statement~~ Statement No. 109”", which clarifies the accounting for uncertainty in tax positions. FIN 48 requires that the Company recognize the impact of a tax position in the Company’s financial statements if that position is more likely than not to be sustained on audit, based on the technical merits of the position. FIN 48 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The provisions of FIN 48 ~~are~~ were effective as of the beginning of the Company’s 2007 fiscal year, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. See Note 11, Income Taxes - Adoption of FIN 48.

Foreign Currency Translation The Company’s foreign operations are subject to exchange rate fluctuations and foreign currency transaction costs. The majority of the Company’s foreign sales transactions are denominated in Euros, ~~and~~ British Pounds and Saudi Riyals.

The financial statements of the Company’s foreign subsidiaries have been translated into U.S. dollars in accordance with SFAS No. 52, “Foreign Currency Translation.” For foreign operations with the local currency as the functional currency, assets and liabilities denominated in non-U.S. dollar functional currencies are translated using the period-end spot exchange rates. Revenues and expenses are translated at monthly-average exchange rates. The effects of translating operations with a functional currency other than the reporting currency are reported as a component of accumulated other comprehensive income included in consolidated shareholders’ equity. The determination of functional currency is based on the subsidiary’s relative financial and operational independence from the Company.

The Company is also subject to foreign currency transaction gains or losses due to inter-company payables and receivables denominated in foreign currency. Foreign subsidiaries with amounts owed from the London operations at March 31, 2008 (denominated in Euros) include Italy, Algeria and Saudi Arabia. Foreign subsidiaries with amounts owed to the McLean operations at March 31, 2008 (denominated in Euros or British Pounds) include Italy and the United Kingdom. For the three months ended March 31, 2008 and 2007, these balances generated a foreign exchange loss of $1.4 million and $0.3 million, respectively. These amounts are included in other income (expenses) in the condensed consolidated statements of operations.

Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the reporting period. Estimates are used in accounting for, among other things, long term contracts, allowance for doubtful accounts, accrual of income taxes, recoverability of investments in affiliates and the accrual of restructuring charges. Actual results could differ from these estimates.

Share -Based Compensation On January 1, 2006, the Company adopted SFAS No. 123 (revised 2004), "Share-Based Payment” (“SFAS No. 123(R)”). SFAS No. 123(R) requires companies to measure all employee share-based compensation awards using a fair value method and record such expense in the consolidated results of operations. The Statement eliminated the ability to account for share-based compensation using the intrinsic value method as prescribed by the Accounting Principles Board, or APB, Opinion No. 25, “Accounting For Stock Issued to Employees.”

The Company adopted SFAS No. 123(R) using the modified prospective method, which requires the application of the accounting standard as of January 1, 2006. Under this application, the Company is required to record compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remain outstanding at the date of adoption. Share-based compensation expense recognized since adoption is based on the value of the portion of the share-based payment awards that are ultimately expected to vest and reduced for estimated forfeitures. SFAS No. 123(R) requires the estimation of forfeitures when recognizing compensation expense. Estimated forfeitures should be adjusted over the requisite service period should actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized in the period of change and would have an impact on the amount of unamortized compensation expense to be recognized in future periods.

~~The~~ Other ~~Company~~Comprehensive isIncome ~~also~~(Loss) ~~subject~~Comprehensive toincome ~~foreign~~(loss) is ~~currency~~defined ~~transaction gains~~as ornet ~~losses~~income ~~due~~(loss) plus tothe ~~intercompany~~changes ~~payables~~in ~~and~~equity ~~receivables denominated~~of ina ~~foreign~~business ~~currency.~~enterprise ~~Foreign~~during ~~subsidiaries~~a ~~with amounts~~period ~~owed~~ from ~~the~~transactions ~~London~~and ~~operations at~~other ~~September 30,~~events ~~2007~~and ~~(denominated~~circumstances infrom ~~Euros)~~non-owner ~~include Italy, Algeria and Saudi Arabia~~sources. ~~Foreign~~Other ~~subsidiaries~~comprehensive ~~with~~income ~~amounts~~(loss) refers ~~owed~~ to ~~the~~ ~~McLean~~revenues, ~~operations at September 30~~expenses, ~~2007~~gains ~~(denominated in Euros or British Pounds) include Italy~~ and ~~the~~losses ~~United~~that ~~Kingdom~~under U. ~~For~~S. ~~the~~GAAP ~~three~~are ~~months~~included ~~ended~~in ~~September 30,~~comprehensive ~~2007 and~~income ~~September 30~~(loss), ~~2006,~~but ~~these~~excluded ~~balances~~from ~~generated~~net aincome ~~foreign exchange gain~~ (loss) ~~of $(0~~.~~9) million~~ ~~and $1.0 million,~~Other ~~respectively.~~comprehensive ~~For~~income ~~the nine months ended September 30, 2007 and September 30, 2006, these balances generated a foreign exchange gain~~ (loss) consists solely of ~~$(0.9) million~~foreign ~~and~~currency ~~$1.1 million,~~translation ~~respectively~~adjustments. ~~These amounts~~Changes ~~are~~in ~~included~~components inof other ~~income~~comprehensive income (~~expense~~loss) are inreported ~~the consolidated~~net ~~statements~~ of ~~operations~~income tax.

~~Use~~ Earnings of(Loss) ~~Estimates~~Per Common Share. The ~~preparation~~calculation of ~~the consolidated~~earnings ~~financial~~(loss) per ~~statements~~common inshare ~~conformity~~is ~~with U.S. GAAP~~based ~~requires~~on ~~management~~the toweighted ~~make~~average ~~estimates~~number ~~and~~of ~~assumptions~~shares ~~that affect~~outstanding during the ~~reported~~applicable ~~amount~~period. ofThe ~~assets and liabilities and~~calculation ~~disclosure~~for ofdiluted ~~contingent~~earnings ~~assets~~(loss) per ~~and~~common ~~liabilities~~share atrecognizes the ~~date~~effect of ~~the~~ ~~financial~~all ~~statements~~potential ~~and~~dilutive ~~the~~common shares ~~reported~~that ~~amounts~~were ofoutstanding ~~revenues and~~during ~~expenses~~the ~~during~~respective periods, unless the ~~reporting~~impact ~~period~~would be anti-dilutive.

Share-Based Compensation On January 1, 2006, the Company adopted SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123(R)”). SFAS No. 123(R) requires companies to measure all employee share-based compensation awards using a fair value method and record such expense in the consolidated results of operations. The statement eliminates the ability to account for share-based compensation using the intrinsic value method as prescribed by the Accounting Principles Board, or APB, Opinion No. 25, “Accounting For Stock Issued to Employees.”

The Company adopted SFAS No. 123(R) using the modified prospective method, which requires the application of the accounting standard as of January 1, 2006. Under this application, the Company is required to record compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remain outstanding at the date of adoption. Share-based compensation expense recognized since adoption is based on the value of the portion of the share-based payment awards that are ultimately expected to vest and reduced for estimated forfeitures. SFAS No. 123(R) requires the estimation of forfeitures when recognizing compensation expense. Estimated forfeitures should be adjusted over the requisite service period should actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized though a cumulative adjustment, which is recognized in the period of change and would have an impact on the amount of unamortized compensation expense to be recognized in future periods.

Other Comprehensive Income (Loss) Comprehensive income (loss) is defined as net income (loss) plus the changes in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Other comprehensive income (loss) refers to revenues, expenses, gains and losses that under GAAP are included in comprehensive income (loss), but excluded from net income (loss). Other comprehensive income (loss) consists solely of foreign currency translation adjustments. Changes in components of other comprehensive income (loss) are reported net of income tax.

Factoring of Accounts Receivable During the second quarter of 2007, the Company entered into an accounts receivable factoring agreement with a financial institution in EMEA whereby the Company may sell eligible accounts receivable. The Company accounts for the program under SFAS 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities,” as amended by SFAS 156, “Accounting for Servicing of Financial Assets — An Amendment of FASB Statement No. 140.” See Note 10, Lines of Credit and Notes Payable.

Reclassifications Certain immaterial items in the prior period’s consolidated financial statements, included herein, have been reclassified to conform to the current period’s consolidated financial statement presentation.

NOTE 3. NEW ACCOUNTING STANDARDS

In ~~December 2007~~September 2006, the ~~Financial~~FASB ~~Accounting~~issued ~~Standards~~SFAS ~~Board~~ No. 157, Fair Value Measurements, (“~~FASB~~SFAS No. 157”). SFAS ~~issued~~No. 157 establishes a formal framework for measuring fair value under generally accepted accounting principles. Although SFAS No. ~~141~~157 applies (Ramends), the provisions of existing FASB and ~~“Business~~other ~~Combinations~~accounting pronouncements,” it does not require any new fair value measurements nor does it (“establish valuation standards. SFAS No. ~~141~~157 is effective for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued FASB Staff Position 157-1 (R)“FSP 157-1”), which ~~replaces~~excludes SFAS No. ~~141~~13, Accounting for Leases , and ~~issued~~its related pronouncements that address leasing transactions from the scope of SFAS No. ~~160, “Noncontrolling~~157. ~~Interests~~Also in ~~Consolidated~~February 2008, ~~Financial~~the FASB issued FASB Staff ~~Statements,”~~Position 157-2 (“FSP 157-2”) which delays the effective date of SFAS No. ~~160”)~~157 for all non-financial assets and liabilities, anexcept those items recognized or disclosed at fair value on a recurring ~~amendment~~basis (at least annually). FSP 157-2 defers the effective date of ~~ARB~~SFAS No. ~~51.~~157 ~~These~~for ~~two~~non-financial assets ~~new~~and ~~standards~~non-financial ~~will~~liabilities to fiscal years beginning after November 15, 2008. The FASB ~~change~~has ~~the~~issued ~~accounting~~a ~~for~~proposed ~~and~~FASB ~~the~~Staff ~~reporting~~Position ~~for~~157-c, ~~business~~(“FSP 157-c”), that would provide guidance on ~~combination~~measuring ~~transactions~~liabilities ~~and~~under ~~noncontrolling~~SFAS No. 157. Management has concluded that there is no material impact on financial assets at March 31, 2008.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, (“SFAS No. 159”), which provides companies with an option to report selected 9financial assets and liabilities at fair value. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. Management has adopted SFAS 159 but did not make an election to apply it to any eligible financial assets or liabilities.

~~(minority)~~ In ~~interests~~December 2007, in the ~~consolidated~~FASB ~~financial~~issued ~~statements~~SFAS No. 141 (revised 2007), Business Combinations, (“SFAS ~~respectively~~No. 141R”) and SFAS No. ~~141~~160, Non-controlling Interests in Consolidated Financial Statements, (R“SFAS No. 160”). ~~will~~SFAS ~~change~~No. 141R ~~how~~replaces ~~business acquisitions~~SFAS ~~are~~No. 141. ~~accounted~~SFAS ~~for~~No. 141R ~~and~~applies ~~will~~to ~~impact~~all ~~financial~~transactions or other ~~statements~~events ~~both~~in onwhich an entity (the ~~acquisition~~acquirer) ~~date~~obtains ~~and~~control inof ~~subsequent periods~~one or more businesses. SFAS No. 160 amends ~~will~~Accounting ~~change~~Research ~~the~~Bulletin ~~accounting~~(“ARB”) ~~and reporting~~No. 51, ~~for~~Consolidated ~~minority~~Financial ~~interests,~~Statements. ~~which~~SFAS ~~will~~No. 160 establishes beaccounting ~~re-characterized as~~and ~~noncontrolling~~reporting ~~interests~~standards ~~and~~for ~~classified~~the asnon-controlling interest in a ~~component~~subsidiary ofand ~~equity~~for ~~These~~the ~~two~~deconsolidation ~~standards~~of ~~will~~a besubsidiary. ~~effective~~Both ~~for~~SFAS ~~the~~No. 141R ~~Company~~and ~~for financial~~SFAS ~~statements~~No. 160 ~~issued~~are ~~for~~effective for fiscal years beginning after December 3115, 2008. ~~Early~~SFAS ~~adoption~~No. 141R will have an impact on accounting for business combinations once adopted, but the effect is ~~prohibited.~~dependent ~~The~~upon acquisitions at that time. ~~Company~~Management is currently evaluating the impact ~~of SFAS No. 141(R)~~that ~~and~~ SFAS No. 160 will have on ~~its consolidated~~the Company’s financial position, or results of operations ~~and cash flows~~.

In Other ~~February~~new ~~2007,~~pronouncements ~~the FASB~~ issued ~~SFAS No. 159, “The~~during ~~Fair~~the ~~Value~~first ~~Option~~quarter ~~for Financial Assets and Financial Liabilities — Including an Amendment~~ of ~~Statement~~2008 ~~of Financial~~are ~~Accounting~~not ~~Standards~~applicable ~~No. 115” (“SFAS No. 159”). SFAS No. 159 permits companies~~ to ~~choose to measure, on an~~the ~~instrument-by-instrument basis,~~Company ~~financial instruments~~ and ~~certain other items at fair value that~~ are not ~~currently~~anticipated ~~required~~ to behave ~~measured~~an ateffect ~~fair value. Unrealized gains and losses~~ on ~~items for which~~ the ~~fair value option is elected will be recognized in earnings at each subsequent reporting date. SFAS No. 159 is effective for the~~ Company’s ~~as of January 1, 2008. The Company is in the process of determining the effect of the adoption of SFAS No. 159 on its consolidated~~ financial position~~, results~~ ~~of operations~~ or ~~cash~~results ~~flows~~of operations.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, (“SFAS No. 157”) which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company is in the process of determining the effect of the adoption of SFAS No. 157 on the Company’s consolidated financial position, results of operations or cash flows.

NOTE 4. BUSINESS COMBINATIONS

On March 9, 2007, the Company completed the purchase of the equity interests in the Europe, Middle East and Africa wireless engineering services business of Wireless Facilities, Inc., (“WFI~~”),~~— ~~for a cash purchase price of~~EMEA $4.0 million. Transaction and other related costs of approximately $0.5 million (including $0.1 million of third quarter costs) were incurred in connection with the transaction. On March 9, 2007, in connection with the acquisition, the Company entered into a revolving credit facility with Bank of America, N.A. (“Bank of America”). See also Note 10, Lines of Credit and Notes Payable.

~~The~~ On ~~acquisition~~March 9, ~~was~~2007, ~~accounted~~the ~~for~~Company ~~under~~completed the purchase ~~method~~ of ~~accounting.~~ ~~Goodwill~~certain ~~totaling~~equity ~~$3.7 million~~interests ~~was~~in ~~recorded on~~the ~~acquisition~~Europe, ~~based~~Middle onEast aand ~~preliminary~~Africa ~~purchase~~(“WFI-EMEA”) ~~price~~wireless ~~allocation~~engineering ~~by management.~~services ~~Goodwill~~business isof ~~recognized~~Wireless Facilities, asInc., ~~the~~(“WFI”), ~~excess~~for a purchase price ~~over~~of ~~the fair~~$4.0 million, ~~value~~$3.3 million ofin ~~net~~cash ~~assets~~at ~~acquired~~closing and $0.7 million ~~The~~(included ~~portions~~in ofother ~~the~~current ~~purchase price~~liabilities ~~allocation~~in ~~that~~the ~~are~~condensed ~~not~~consolidated ~~yet~~balance sheet) ~~finalized~~due ~~relate~~March 31, to2008, ~~the valuation~~pending settlement of ~~intangible~~outstanding ~~assets~~claims. ~~which~~Transaction ~~may~~and ~~include~~other ~~trade names,~~related ~~customer~~costs ~~lists~~of ~~and~~approximately ~~backlog~~$0.4 million ~~The~~were ~~preliminary~~incurred ~~purchase~~in ~~price allocation,~~connection ~~including~~with the ~~allocation~~transaction. ofOn ~~goodwill~~March 9, 2007, ~~will~~in ~~be updated~~connection aswith ~~additional~~the ~~information~~acquisition, ~~becomes~~the ~~available.~~Company ~~The goodwill~~entered ~~recorded~~into isa ~~not~~revolving ~~deductible~~credit ~~for~~facility ~~tax~~with Bank ~~purposes~~of America, N.A. ~~The following~~(“Bank ~~table~~of ~~represents~~America”). ~~the~~See ~~preliminary~~also ~~allocation~~Note of9, ~~the~~Borrowings.

The acquisition was accounted for under the purchase method of accounting. Goodwill totaling $2.1 million was recorded on acquisition based on a purchase price allocation by management. 10Goodwill is recognized as the excess purchase price over the fair value of net assets acquired. The goodwill recorded is not deductible for U.S. tax purposes.

~~purchase~~ The ~~price~~Company ~~for~~paid a premium over the ~~equity~~fair ~~interests~~value of the ~~Europe,~~net ~~Middle East~~assets ~~and~~acquired ~~Africa~~for ~~business~~a ofnumber ~~WFI~~of reasons, ~~(“WFI~~primarily ~~EMEA”)~~to ~~based~~expand ~~on management~~its ~~estimates~~professional workforce and geographic markets not previously served.

	(in thousands)
Fair value of tangible net assets acquired:
Cash and cash equivalents	$	250
Trade accounts receivable (net)		1,681
Unbilled receivables		1,637
Fixed assets		854
Other assets		487
Liabilities assumed		(4,102	)
Excess cost of acquiring WFI EMEA over fair value of identified net assets acquired (goodwill)		3,709
	$	4,516

The Company did not present pro forma information as this acquisition was immaterial to the Company’s consolidated results of operations and financial position. The results of operations of WFI-EMEA have been included in the results of operations since the acquisition date.

9 ~~The Company paid a premium over the fair value of the net tangible assets acquired for a number of reasons, primarily to expand its professional workforce and geographic markets not previously served.~~

~~The~~WFI— ~~Company did not present pro forma information as the acquisitions was immaterial to the Company’s consolidated results of operations and financial position~~U.S.

On May 29, 2007, the Company acquired certain assets and liabilities of the USU.S. wireless engineering services business of WFI (“WFI-U.S.”), which included customer contracts, tools, other assets and approximately 350 employees. The purchase consideration was approximately $38.6 million, (calculated principally as the difference between $46.0 million and the amount of certain ~~working~~ working capital to be retained by WFI, estimated to be approximately $7.4 million), $17.0 million of which was paid in cash and $21.6 million of which was paid by the issuance by the Company to WFI of a promissory note (the “Note”), which Note is subordinated to the Company’s obligations under the amended and restated credit facility discussed in Note 10 9, ~~Lines~~Borrowings. Such amount was subsequently increased to $23.9 million as result of ~~Credit~~a ~~and~~purchase ~~Note~~price adjustment agreed to by the Company on ~~Payable~~January 22, 2008, related to the value of certain assets transferred. Transaction and other related costs of approximately $23.80 million (including $0.5 million of severance costs ~~and $0.1 million that was incurred in the third quarter of 2007~~) were incurred in connection with the transaction. On July 5, 2007, WFI entered into an assignment agreement with SPCP Group L.L.C. (“SPCP”) whereby the rights, title and interest in the Note were transferred to SPCP. A portion of the cash consideration was funded by the Company’s borrowings under the ~~revolving~~ revolving credit facility with Bank of America, N.A., which was amended on May 29, 2007, in connection with the Company’s purchase. See Note 10 9, ~~Lines of Credit and Note Payable~~Borrowings.

The acquisition was accounted for under the purchase method of accounting. Goodwill totaling $3927.73 million was recorded on acquisition based on a ~~preliminary~~ purchase price allocation by management. Goodwill is recognized as the excess purchase price over the fair value of net assets acquired. ~~The portions of the~~and ~~purchase~~is ~~price~~deductible ~~allocation~~for ~~that are not yet finalized relate to the valuation of intangible assets which may include trade names, customer lists and backlog~~U.S. ~~The~~tax ~~preliminary purchase price allocation, including the allocation of goodwill, will be updated as additional information becomes available~~purposes.

The ~~following~~Company ~~table~~paid ~~represents~~a premium over the ~~preliminary~~fair ~~allocation~~value of the ~~purchase~~ ~~price~~net ~~for~~assets ~~the~~acquired ~~selected~~for ~~assets~~a ~~and~~number ~~liabilities~~ of reasons, ~~the~~primarily ~~US wireless~~to ~~engineering~~expand ~~services~~its ~~business~~professional ofworkforce ~~WFI~~and ~~acquired~~geographic bymarkets ~~the~~not previously ~~Company:~~served.

	(in thousands)
Fair value of tangible assets acquired	$	3,368
Liabilities assumed		(1,617	)
Excess cost of acquiring net assets over fair value of identified net assets acquired (goodwill)		39,727
	$	41,478

The results of operations of WFI-U.S. have been included in the results of operations since the acquisition date. The following table summarizes unaudited pro forma financial information assuming the WFI U.S. acquisition had occurred on January 1, 2007. This unaudited pro forma financial information does not necessarily represent what would have occurred if the transaction had taken place on the dates presented and should not be taken as representative of our future consolidated results of operations or financial position:

The Company paid a premium over the fair value of the net tangible assets acquired for a number of reasons, primarily to expand its professional workforce and geographic markets not previously served.


	Three Months Ended
	March 31, 2007
Revenue	$	38,009
Operating loss	$	(6,485	)
Loss from continuing operations	$	(8,253	)
Loss per share (basic and diluted)	$	(0.32	)

The following table summarizes unaudited pro forma financial information assuming the US WFI acquisition had occurred on January 1, 2006. The Company did not present pro forma information for WFI EMEA as this acquisition was immaterial to the Company’s consolidated results of operations and financial position. This unaudited pro forma financial information does not necessarily represent what would have occurred if the transaction had taken place on the dates presented and should not be taken as representative of our future consolidated results of operations or financial position:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
Revenue	$	41,834		$	47,060		$	117,106		$	152,644
Operating (loss) income	$	(5,192	)	$	153		$	(19,187	)	$	763
Net loss	$	(7,897	)	$	(3,013	)	$	(27,087	)	$	(5,659	)
Loss per share (basic and diluted)	$	(0.25	)	$	(0.12	)	$	(0.93	)	$	(0.23	)

NOTE 5. DISCONTINUED OPERATIONS

In 2006, the Company made the decision to sell its U.S. Network Deployment operations and its ~~Brazilian~~ Brazilian Subsidiary, LCC do Brasil Ltda. (“LCCI Brazil”). In accordance with SFAS No. 144, “ "Accounting for the Impairment or Disposal of Long-Lived Assets”, the operating results of these operations have been classified as discontinued operations in the accompanying condensed consolidated statements of operations. All prior periods have been restated to reflect these operations as discontinued. In addition, assets and liabilities of these operations that were not sold as of March 31, 2008 and December 31, 2007, were reflected as assets and liabilities held for sale in the accompanying condensed consolidated balance sheets.

The revenue, gross margin and pre-tax operating loss relating to the Company’s discontinued operations for the three months ended March 31, 2008 and 2007 are as follows: 11

discontinued operations in the accompanying consolidated statements of operations. All prior periods have been restated to reflect these operations as discontinued. In addition, assets and liabilities of these operations that were not sold as of June 30, 2007 and December 31, 2006, were reflected as assets and liabilities held for sale in the accompanying consolidated balance sheets.


	Three Months Ended March 31,
	2008			2007
	(in thousands)
Revenue	$	431		$	501

Gross margin	$	39		$	47

Loss from discontinued operations (net of applicable taxes of zero)	$	(327	)	$	(502	)
Loss on disposal of discontinued operations (net of applicable taxes of zero)		—			(1,550	)

Total loss from discontinued operations	$	(327	)	$	(2,052	)

The ~~revenue,~~following ~~gross~~businesses ~~margin~~have ~~and~~been ~~pre~~reflected ~~tax~~as ~~operating loss relating to the Company’s~~ discontinued operations ~~for~~in the ~~three and~~accompanying ~~nine~~condensed ~~months~~consolidated ~~ended~~statements ~~September 30,~~of ~~2007~~operations ~~and~~for ~~September 30, 2006~~all ~~are~~periods ~~as follows~~presented:

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2007			2006			2007			2006
				(in thousands)
Revenue	$	459		$	664		$	1,449		$	14,420
Gross margin (loss)	$	(88	)	$	(1,243	)	$	(98	)	$	(1,343	)
Loss from discontinued operations (net of applicable taxes of zero)	$	(329	)	$	(1,638	)	$	(1,205	)	$	(2,707	)
Gain on disposal of discontinued operations (net of applicable taxes)		—			(63	)		(1,550	)		859
Total loss from discontinued operations	$	(329	)	$	(1,701	)	$	(2,755	)	$	(1,848	)

The following businesses have been reflected as discontinued operations in the accompanying consolidated statements of operations for all periods presented:

Sale of U.S. Network Deployment Business

During the second quarter of 2006, the Company made the decision to sell the Company’s U.S. Network Deployment operations. The operations of the network deployment business in the U.S. consisted primarily of activities involved in the construction of cell sites and related preconstruction and post construction services (site acquisition, system design, etc.) that are directly related to and integral to the construction of cell sites for which the Company was contracted to construct. Where the Company performs certain preconstruction or post ~~construction~~ construction related activities that are not performed in connection with the Company’s construction of cell sites, revenues and expenses related thereto are included in the Company’s Radio Frequency (“RF”) engineering business in the Americas and are not considered network deployment services.

Prior to this decision, the results of these operations were reported in the Americas segment. Nokia Inc. (“Nokia”) acquired certain assets, including all unbilled accounts receivable and certain fixed assets and assumed certain liabilities, contracts, and personnel associated with the U.S. ~~network~~ Network Deployment business, for a total consideration of $10.2 million. The consideration included approximately $~~985,000~~1.0 million of cash proceeds, with the remainder to be ~~paid~~collected upon final settlement. AtThe ~~September 30,~~Company ~~2007,~~and Nokia reached a definitive agreement on the amount receivable (reported in the Company’s condensed consolidated financial statements as Due from Disposal of Business) for $21.98 million which was ~~due~~ ~~from~~paid ~~Nokia~~ in ~~connection~~March 2008. ~~with~~As a result of this ~~transaction~~definitive agreement, the Company recognized a charge to Discontinued Operations of $1.5 million at March 31, 2007.

~~The~~ In conjunction with the sale, the Company ~~and~~entered into a loan agreement with Nokia ~~have~~whereby Nokia ~~reached~~would advance up to a ~~definitive~~maximum of $4.2 million. In consideration for Nokia providing advances under the loan agreement, onthe Company accrued an initial fee of $0.2 million. Advances to the ~~amount~~Company ~~receivable~~under ~~(reported~~the inloan agreement will be repaid as Nokia collects, and remits to the Company’s, ~~consolidated~~the ~~financial~~unbilled ~~statements~~accounts asreceivable ~~Due~~transferred ~~from~~at ~~Disposal~~closing. ofThe ~~Business~~Company asreceived advances of approximately $3.4.2 million), ~~for~~which ~~1.8 million.~~were Asused ato ~~result~~repay amounts payable to vendors of ~~this~~the deployment business. The ~~definitive~~payments ~~agreement,~~to these vendors were pre-approved by Nokia. During the ~~Company~~period ~~recognized~~from aclosing ~~charge~~of the transaction to ~~Discontinued Operations~~June 30, of2007, Nokia applied $13.58 million atof ~~March~~collections from transferred accounts receivables to the note payable. The note payable was repaid in full as of June 3130, 2007. See also Note 9, Borrowings.

In The ~~conjunction with the sale, the~~ Company also entered into a ~~loan agreement~~transition ~~with~~services ~~Nokia~~agreement whereby ~~Nokia~~the ~~would~~Company ~~advance up to a maximum~~provided ofNokia ~~$4.2 million.~~with Intransitional ~~consideration~~services for ~~Nokia~~a ~~providing advances~~period ~~under~~of ~~the~~up ~~loan~~to ~~agreement, the Company accrued an initial fee of $0.2~~12 ~~million~~months. ~~Advances~~For tosuch ~~the~~transitional ~~Company under~~services, ~~the loan agreement will be repaid as~~ Nokia ~~collects,~~paid ~~and remits to~~ the Company, ~~the~~a ~~unbilled~~monthly ~~accounts~~fee ~~receivable transferred at closing. The Company received advances of approximately $4.2 million,~~ which ~~were~~escalated ~~used~~after ~~to repay amounts payable to vendors of~~ the ~~deployment~~first ~~business.~~six ~~The~~months ~~payments~~and ~~to these~~escalated ~~vendors~~further ~~were~~after ~~pre-approved~~nine ~~by Nokia~~months. ~~The~~During ~~Note~~the ~~payable~~three ~~was~~months ~~repaid in~~ended ~~full as of June~~March 3031, 2007., ~~See~~monthly ~~also~~fees ~~Note 10,~~billed under ~~Lines~~this ofagreement ~~Credit~~amounted ~~and~~to ~~Notes~~approximately ~~Payable~~$0.1 million.

The ~~Company~~following ~~also~~table ~~entered~~presents ~~into~~revenues, agross ~~transition~~margin ~~services~~and ~~agreement whereby~~pre ~~the~~tax ~~Company~~operating ~~provides~~loss ~~Nokia with transitional services~~ for athe ~~period of up to 12 months~~U. ~~For such transitional~~S. ~~services,~~Network ~~Nokia~~Deployment ~~pays~~business ~~the~~for ~~Company a monthly fee which escalates after~~ the ~~first six months and escalates further after nine months. During the~~ three ~~and nine~~ months ended ~~September~~March 3031, ~~2007~~ 2008 and ~~2006, monthly fees billed under this~~2007: ~~agreement were not significant.~~


	Three Months Ended March 31,
	2008			2007
	(in thousands)
Revenues	$	—		$	61

Gross margin (loss)	$	—		$	61

Income (loss) from discontinued operations (net of applicable taxes of zero)	$	(4	)	$	49

Loss from disposal of discontinued operations (net of applicable taxes of zero)		—			(1,550	)

Total loss from discontinued operations	$	(4	)	$	(1,501	)

As ~~The~~of ~~following~~March 31, ~~table~~2008, ~~presents~~there ~~revenue,~~were ~~gross~~no ~~margin~~assets ~~(loss)~~or ~~and~~liabilities ~~pre~~related to ~~tax~~the ~~operating~~discontinued ~~loss~~operations ~~for~~of the U.S. Network Deployment business ~~for the three and nine~~. ~~months ended September 30, 2007 and September 30, 2006:~~

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2007			2006			2007			2006
	(in thousands)
Revenue	$	—		$	162		$	91		$	12,761
Gross margin (loss)	$	—		$	(868	)	$	91		$	(1,055	)
Income (loss) from discontinued operations (net of applicable taxes of zero)	$	(9	)	$	(967	)	$	68		$	(1,756	)
Gain (loss) on disposal of discontinued operations (net of applicable taxes)		—			(63	)		(1,550	)		859
Total income (loss) from discontinued operations	$	(9	)	$	(1,030	)	$	(1,482	)	$	(897	)

Additionally, certain assets and liabilities related to the discontinued operations of the U.S. Network Deployment business are included in the balance sheet as of September 30, 2007 and December 31, 2006 and are as follows:

	September 30,		December 31,
	2007		2006
	(in thousands)
Billed accounts receivable	$	82	$	183
Accounts payable	$	360	$	1,087
Accrued expenses	$	594	$	623

Sale of Brazilian Subsidiary

In July 2006, the Company made the decision to sell or liquidate ~~its~~ LCCI Brazil. LCCI Brazil provided mainly network deployment services and to a lesser degree RF Engineering. RF Engineering services include the design, optimization and performance improvement of wireless networks. In August 2006, after evaluating both options, the Company committed to a plan to sell LCCI Brazil to ~~the~~ the management of the operation.

On October 27, 2006, the Company entered into a definitive Sale and Purchase Agreement with management, subject to approval of the Board of Directors of the Company. The Board of Directors of the Company approved the transaction ~~and the Company’s determination to no longer operate in Brazil~~ on November 2, 2006. Prior to this decision, the results of these operations were reported in the Americas segment.

11 On November 12, 2007, the Company received notice from the buyers that they had decided not to proceed with the acquisition of LCCI Brazil. The Company is exploring other alternatives including the opportunity to sell to another interested party that has submitted a non-binding letter of intent to purchase LCCI Brazil. On October 5, 2007, The Company entered into a non-binding letter of intent for the sale of LCCI Brazil. See also Note 18, Subsequent Events.

On November 12, 2007, the Company received notice from the buyers that they had decided not to proceed with the acquisition of LCCI Brazil. The Company is working on other alternatives, including the opportunity to sell to another interested party with whom the Company has entered into a due diligence exclusivity period that ends on June 30, 2008. The Company continues to be in negotiation with this party for the sale of LCCI Brazil.

The revenues, gross margin (loss) and pre tax operating loss for LCCI Brazil for the three months ended March 31, 2008 and 2007 are as follows:


	Three Months Ended
	March 31,
	2008			2007
	(in thousands)
Revenues	$	431		$	440

Gross margin (loss)	$	39		$	(14	)

Loss from discontinued operations (net of applicable taxes of zero)	$	(323	)	$	(551	)

Additionally, certain assets and liabilities related to LCCI Brazil included in the condensed consolidated balance sheets as of March 31, 2008 and December 31, 2007 are as follows:


	March 31,		December 31,
	2008		2007
	(in thousands)
Other receivables		218		117
Other current assets		76		62
Fixed assets		145		138

Assets held for sale	$	439	$	317


Accounts payable		366	$	179
Accrued employee compensation and benefits		235		205
Other accrued expenses		75		75

Liabilities held for sale	$	676	$	459

NOTE 6. ACCOUNTS RECEIVABLE

The Company is party to various long-term contracts for which revenues are recognized on the percentage-of-completion method. Certain of these contracts have large amounts of unbilled receivables associated with them and will be performed over a period of more than one year. As of March 31, 2008 and December 31, 2007, the Company had $2.6 million and $4.0 million, respectively, billed but not paid by customers under retainage provisions in contracts. As of March 31, 2008 and December 31, 2007, the Company had $10.1 million and $14.8 million billed, respectively, and $8.5 million and $6.7 million unbilled but anticipated to be billed within one year, respectively, under long-term contracts.

During May 2007, the Company entered into a factoring agreement (the “Agreement”) with Barclays Factoring, S.A., (“Barclays”) whereby the Company’s Spanish subsidiary may sell its eligible accounts receivable to Barclays on a revolving basis up to a maximum of 0.8 million Euros. Under the terms of the Agreement, accounts receivable are sold to Barclays without recourse at their face value less interest of EURIBOR at 90 days plus 0.9% and a commission of 0.15%. Accounts receivable sales were approximately 0.3 million Euros during the three months ended March 31, 2008.

NOTE 7. PROPERTY AND EQUIPMENT

At March 31, 2008 and December 31, 2007, property and equipment consisted of the following:


	March 31,			December 31,
	2008			2007
	(in thousands)
Computer equipment	$	3,458		$	4,613
Software		9,154			9,448
Furniture and office equipment		14,186			15,744
Leasehold improvements		1,890			1,836
Vehicles		133			163

Property and equipment		28,821			31,804
Less accumulated depreciation and amortization		(23,545	)		(25,855	)

Property and equipment, net	$	5,276		$	5,949

Depreciation and amortization expense related to property and equipment for the three months ended March 31, 2008 and 2007 was $0.9 million and $0.6 million, respectively.

NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS

As of March 31, 2008 and December 31, 2007, goodwill and other intangible assets consisted of the following:


	March 31,			December 31,
	2008			2007
	(in thousands)
Goodwill	$	44,512		$	44,080

Other intangible assets:
Customer relationships	$	17,546		$	17,531
Trade names		247			230
Patents		43			43
Other		265			265

Other Intangibles		18,101			18,068

Less: Accumulated amortization		(2,566	)		(2,194	)

Other intangibles, Net	$	15,535		$	15,875

Goodwill increased by $0.4 million as of March 31, 2008 due to the foreign currency translation effect on goodwill balances maintained in British Pounds and Euros. Goodwill by segment was $27.3 million for the U.S. and $17.2 million for EMEA at March 31, 2008. The Company performs its annual impairment review in the fourth quarter, or earlier if changes in circumstances indicate a potential impairment. No change in circumstances were noted in the first quarter.

Amortization expense of other intangibles was $0.4 million and $22,000 for the three months ended March 31, 2008 and 2007, respectively. The estimated aggregate amortization expense for each of the five succeeding years is approximately $1.1 million. The weighted average amortization period for customer relationships is 15 years, 10 years for patents, 5 years for trade names, 1 year for other and 14.8 years in the aggregate.

NOTE 9. BORROWINGS

As discussed in Note 5, Discontinued Operations, in connection with the sale of the U.S. Network Deployment business, the Company entered into a loan agreement with Nokia, whereby Nokia would advance up to a maximum of $4.2 million. Advances to the Company under the loan agreement will be repaid as Nokia collects, and remits to the Company, the unbilled accounts receivable transferred at closing. In consideration for Nokia providing advances under the loan agreement, the Company accrued an initial fee of $0.2 million as interest expense. The note payable was repaid in full as of June 30, 2007.

In December 2007, LCC Belgium entered into a credit agreement with ING Bank. Under this agreement, LCC Belgium may borrow annually up to approximately $66,000, which amount was advanced to the Company at an interest rate of 5.6% per year, repayable in twelve monthly payments, the final payment being due in December 2008. As of March 31, 2008 and December 31, 2007, LCC Belgium had $0.1 million outstanding under this credit facility.

In January 2007, LCC Netherlands entered into a credit agreement with ABN AMRO Bank (“ABN AMRO”) whereby the Company was the beneficiary of an overdraft credit facility (“Facility A”) and a loan facility (“Facility B”). The maximum amount which LCC Netherlands may have outstanding under Facility A is 1.5 million Euros such that this is not to exceed 70% of the accounts receivable that were pledged as security for the loan. In August 2007, the maximum amount which LCC Netherlands can have outstanding on Facility A was increased 1.0 million Euros to 2.5 million Euros. The increase will cover working capital requirements for a project awarded in August 2007. The project will end September 2008 and at which time the credit facility will be reduced to original credit facility limit of 1.5 million Euros. Interest on amounts outstanding under this Facility A are calculated at a rate equal to ABN AMRO’s adjustable Euro basis interest rate plus 1.5%. This was 6.8% at March 31, 2008. At March 31, 2008 and December 31, 2007, the U.S. dollar equivalent of the outstanding loan was $2.3 million and $2.0 million, respectively, under Facility A. Under Facility B, ABN AMRO advanced to LCC Netherlands 0.4 million Euros. Interest on the loan is calculated at a fixed interest rate of 5.5% per year. The loan is repayable quarterly over two years, with the first payment due May 1, 2007. Both of these facilities are secured by a pledge on the accounts receivable and fixed assets of LCC Netherlands. At March 31, 2008 and December 31, 2007, the U.S. dollar equivalent of the outstanding loan was $0.3 million and $0.4 million, respectively, under Facility B.

On March 9, 2007, the Company entered into a revolving credit facility (“the new credit facility”) with Bank of America and terminated the Company’s existing credit facility with CFC. Under the terms of the new credit facility, the aggregate amount owed to Bank of America by the Company, at any time could not exceed $6.5 million. The term of the new credit facility was through September 15, 2007. LCC may from time to time borrow under this facility, and these loans may be base rate loans, Eurodollar base rate loans or Eurodollar daily floating rate loans. Interest on base rate loans is calculated using a fluctuating rate per annum equal to the higher of the Federal Funds Rate plus 0.50% or the prime rate as determined by Bank of America. Interest on Eurodollar base rate loans is calculated using a per annum rate equal to the British Bankers’ Association LIBOR rate. Interest on Eurodollar daily floating rate loans is calculated using a rate per annum equal to the quotient obtained by dividing the Eurodollar daily floating base rate, which is the British Bankers’ Association LIBOR rate, by one minus the Eurodollar reserve percentage. The reserve percentage is issued by the Federal Reserve to lenders from time to time.

The ~~revenue~~new credit facility was amended on May 29, ~~gross~~2007 ~~margin~~(“the amended credit facility”), in connection with the Company’s purchase of certain assets and liabilities of WFI’s U.S. wireless engineering services business (~~loss~~See Note 4, Business Combinations). Under the terms of the amended credit facility, the aggregate amount owed to Bank of America by the Company, at any time was not to exceed $30.0 million. On November 30, 2007, the Company further amended and ~~pre~~restated ~~tax~~its outstanding ~~operating~~credit ~~loss~~facility with Bank of America, to among other things, provide for ~~LCCI~~a bank waiver ~~Brazil~~and amend certain covenants in the agreement for all events of default. This amended and restated credit facility provides for a total principal borrowing amount of up to $21.95 million which may be borrowed, repaid and re-borrowed by the ~~three~~Company on a revolving basis until November 29, 2009. It also provides for a term loan of $6.5 million with scheduled principal repayments of $3.5 million on June 1, 2008 and ~~nine~~$1.0 million ~~months~~on ~~ended~~each of September 1 and December 301, 2008 and March 1, 2009. The ~~2007~~amended and ~~September~~restated credit facility provides for a number of financial and other covenants and the Company was not in compliance with all of them at March 3031, ~~2006~~2008. ~~are~~On February 20, 2008, the Company filed a current report on Form 8-K disclosing that on February 19, 2008 it entered into a Second Amendment to Restated Credit Agreement and Waiver (the “Amendment”), which amends the Amended and Restated Credit Agreement dated as ~~follows:~~of May 29, 2007 (the “Credit Amendment”), among the Company, as borrower, certain domestic subsidiaries of the Company, as guarantors and Bank of America, N.A. as lender and administrative agent (the “Bank”). The Amendment provides, among other things, a waiver by the Bank of certain specified defaults under the Credit Agreement. The Amendment provides for additional deliveries that may be required under the Credit Agreement and failure to deliver will constitute an immediate event of default irrespective of otherwise applicable grace or cure period. At March 31, 2008 and December 31, 2007, there was $21.95 million outstanding, for both periods, under the revolving credit facility at an interest rate of 6.12% and 8.23%, respectively. At March 31, 2008 and December 31, 2007, under the term loan, $4.4 million and $5.8 million, respectively, were outstanding at an interest rate of 8.25% and 10.25%, respectively. Total interest expense attributable to interest and fees arising from the Company’s credit facility with Bank of America for the three months ended March 31, 2008 and 2007 was approximately $0.6 million and $29,000, respectively.

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2007			2006			2007			2006
	(in thousands)
Revenue	$	459		$	502		$	1,358		$	1,659
Gross margin (loss)	$	(88	)	$	(375	)	$	(189	)	$	(288	)
Loss from discontinued operations (net of applicable taxes of zero)	$	(320	)	$	(671	)	$	(1,273	)	$	(951	)

The company has not met certain of the covenants contained in the Amended Credit Facility and Credit Amendment with Bank of America (collectively referred to as the “Amended Loan Agreement”). Specifically, the Company did not meet certain financial covenants related to Earnings before Income Taxes and Depreciation and Amortization (“EBITDA”) and the Consolidated Leverage Ratio ( debt to Consolidated EBITDA) each as defined in the Amended Loan Agreement (the “Financial Covenants”). Additionally, the Company did not meet covenants limiting the amount of fixed assets permitted to be acquired in the Quarter ended March 31, 2008 and related to the Company filing its Form 10Q for the Quarter Ended March 31, 2008 with the SEC on a timely basis. Bank of America has agreed to not declare the Company in default as a result of not meeting the covenants described above and to specifically waive such events of default. Bank of America has also agreed that through August 15, 2008 it will not accelerate the due date in the Amended Loan Agreement from November 30, 2009.

~~Additionally,~~ Based ~~certain~~upon ~~assets~~a ~~and~~forecast ~~liabilities~~of ~~related~~its tooperations ~~LCCI~~for the remainder of the year ended December 31, 2008 the Company ~~Brazil~~has ~~included~~informed inBank of America that it does not believe it will meet the ~~balance~~Financial ~~sheet~~Covenants mentioned above, as ofwell ~~September 30~~as an additional financial covenant, Consolidated Fixed Charge Ratio, which becomes ~~2007~~effective ~~and~~for ~~December 31~~the quarter ending September 30, ~~2006~~2008, ~~are~~for asthe ~~follows:~~ remainder of the year ended December 31, 2008.

	September 30,			December 31,
	2007			2006
	(in thousands)
Cash and cash equivalents (cash overdraft)	$	(14	)	$	50
Other receivables		209			418
Other current assets		63			65
Fixed assets		63			54
Assets held for sale	$	321		$	587
Accounts payable	$	153		$	84
Accrued employee compensation and benefits		173			113
Other accrued expenses		128			66
Liabilities held for sale	$	454		$	263

The Company and Bank of America have agreed to renegotiate the aforementioned financial covenants for the periods ending after May 31, 2008. Such negotiation may result in amendments to the Amended Credit Agreement for items other than those related to financial covenants.

~~NOTE~~ Although, 6as noted above, Bank of America has not declared the Company in default and has not accelerated the due date of the debt, in accordance with U.S. ~~GOODWILL~~GAAP, ~~AND~~as ~~INTANGIBLES~~prescribed in Emerging Issues Task Force release number 86-30, the Company has reclassified the $21.9 million due on November 30, 2009 as a current liability at March 31, 2008.

On June 1, 2007, the Company issued a Subordinated Promissory Note (“Note”) to WFI in Asconnection with the purchase of ~~September~~the WFI U.S. engineering business. The original amount of the Note was $21.6 30million. Such amount was subsequently increased to $23.9 million as result of a purchase price adjustment agreed to by the Company on January 22, 2008, related to the value of certain assets transferred. The note has interest payable at rates based on the British Bankers Associated Rate (“BBA LIBOR”) that escalate on various dates from BBA LIBOR plus 4% on June 1, 2007 to BBA LIBOR plus 13% on January 1, 2010 and ~~December~~which rate is increased by an additional 1% every six (6) months thereafter. This Note was subsequently sold by WFI to a third party. The Note is subordinated to the credit facility with Bank of America which among other things limits cash payments of interest or principal until certain conditions in the credit facility with Bank of America are met. The Note is payable on June 1, 2010. At March 31, ~~2006~~2008 and December 31, 2007 there was a balance of ~~goodwill~~$23.9 million outstanding at an interest rate of 12.1% and 13.3%, ~~other~~respectively. ~~acquired~~Total ~~intangible~~interest ~~assets~~expense ~~consisted~~attributable ofto the ~~following:~~Company’s Note to WFI for the three months ended March 31, 2008 was approximately $0.8 million.

	September 30,			December 31,
	2007			2006
	(in thousands)
Goodwill	$	58,056		$	13,989
Other intangibles:
Customer relationships	$	1,142		$	1,098
Trade names		221			205
Patents		43			28
Other		3			223
Accumulated amortization		(1,365	)		(1,261	)
Other intangibles	$	44		$	293

As of March 31, 2008, $1.3 million was available to be borrowed under our credit facilities.

~~Goodwill~~ The ~~increased~~aggregate bymaturities ~~$44.1 million as~~ of ~~September 30,~~ ~~2007.~~borrowings ~~Goodwill~~as ~~totaling $3.7 million was recorded on the acquisition~~ of ~~the equity interests in the Europe, Middle East and Africa business of WFI and goodwill totaling $39.7~~March ~~million was recorded on the acquisition of certain assets and liabilities of the US wireless engineering services business of WFI~~31, ~~See~~2008 ~~Note 4.~~are ~~Business~~as ~~Combinations.~~follows ~~The remaining increase of $0.7 million was due to the foreign currency translation effect on goodwill balances maintained~~ (in ~~British~~ ~~Pounds and Euros. The Company performs its annual~~thousands): ~~impairment review, annually in the~~


2008	$	7,077
2009		22,030
2010		23,965
2011		—
2012		—

	$	53,072

NOTE 10. RESTRUCTURING CHARGE

During 2002, the Company adopted a restructuring plan (“2002 Restructuring”), and recorded a restructuring charge of $13.5 million for severance related costs and costs associated with closing facilities and disposing of assets in EMEA and our corporate offices. The facility charge equals the existing lease obligation, less the anticipated rental receipts to be received from existing and potential subleases. This charge required significant judgments about the length of time that space will remain vacant, anticipated cost escalators and operating costs associated with the leases, market rate of the subleased space, and broker fees or other costs necessary to market the space. During the second quarter of 2005, the Company adopted a restructuring plan (“2005 Restructuring”), and recorded a net restructuring charge of $0.8 million for severance related costs and costs associated with closing facilities and disposing of assets.

Substantially all the activities related to the 2002 Restructuring and the 2005 Restructuring ~~fourth~~have ~~quarter~~been completed. However, orthe ~~earlier~~Company ifcontinues ~~changes~~to be obligated under facility leases that expire from 2008 through 2014. The accrual remaining at March 31, 2008 includes less than $0.1 million in ~~circumstances~~respect ~~indicate~~of the 2002 Restructuring and the 2005 Restructuring plans, and are associated awith ~~potential~~costs ~~impairment~~attributable to remaining obligations through the year 2014 associated with offices exited or downsized, offset by the Company’s estimates of future income from sublease agreements. The Noremaining ~~impairment~~accrual with respect to the 2002 Restructuring and the 2005 Restructuring plans assumes as of March 31, 2008 that the Company will receive $2.1 million in ~~goodwill~~sublease ~~was~~income, ~~noted~~all of which is committed.

~~NOTE~~ During 7the second quarter of 2007, the Company took steps towards recognizing integration related and other cost synergies by implementing a workforce reduction that eliminated approximately 60 positions worldwide and consolidated certain facilities in the U.K., ~~OTHER~~by ~~COMPREHENSIVE~~adopting ~~INCOME~~a restructuring plan (~~LOSS~~“2007 Restructuring”), and recorded a net restructuring charge of $1.1 million. Approximately $1.0 million of the charge was related to severance and headcount related costs and $0.1 million was related to other non-headcount related expenses. The Company recorded the severance charges related to these headcount reductions as an operating expense in the second and third quarters of 2007. The facilities and other non headcount related charges were recorded as operating expense in the second and third quarters of 2007. The Company paid the majority of severance and related costs in the third quarter with the remaining costs paid in the fourth quarter of 2007. The Company also recorded a restructuring charge of $0.5 million related to personnel severance costs in connection with the acquisition of certain assets and liabilities of the U.S. wireless engineering services business of WFI. The Company included these severance charges in goodwill. The accrual remaining at March 31, 2008 includes approximately $0.2 million in respect of the 2007 Restructuring.

~~Comprehensive~~ In ~~income~~the ~~(loss)~~first isquarter ~~defined~~of as2008, ~~net income (loss) plus~~ the ~~change~~Company inadopted ~~equity of~~ a ~~business~~restructuring ~~enterprise~~plan ~~during~~(“2008 ~~a period~~Restructuring”), ~~from transactions~~ and ~~other~~recorded ~~events~~a ~~and~~restructuring ~~circumstances~~charge ~~from non-owner~~of ~~sources~~$0.4 million ~~Other~~for ~~comprehensive income (loss) refers to~~excess ~~revenues,~~corporate ~~expenses,~~office ~~gains~~space ~~and losses~~ that ~~under~~is ~~GAAP~~non-cancellable ~~are~~through ~~included~~2017 inthat ~~comprehensive~~it ~~income~~has ~~(loss),~~elected ~~but excluded from~~not ~~net~~to ~~income~~occupy ~~(loss).~~and ~~Accumulated~~is ~~other~~attempting ~~comprehensive~~to ~~income~~sublet. ~~(loss) consists~~The ~~solely~~charge ofhas ~~foreign~~been ~~currency translation adjustments at~~determined ~~September 30,~~based ~~2007~~on ~~and~~the ~~2006.~~fair ~~Comprehensive~~values ~~income~~of ~~(loss) for~~ the ~~three~~remaining ~~and~~lease ~~nine~~rentals ~~months~~reduced ~~ended September 30, 2007 and~~by ~~2006~~estimated issublease ~~as follows (in thousands)~~rentals.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
	(in thousands)
Net loss	$	(7,897	)	$	(1,570	)	$	(24,639	)	$	(3,652	)
Other comprehensive loss, net of tax:
Change in foreign currency translation gains		1,611			275			2,304			1,555
Other comprehensive loss	$	(6,286	)	$	(1,295	)	$	(22,335	)	$	(2,097	)

NOTE 8. RESTRUCTURING CHARGE

During the second quarter of 2005, the Company adopted a restructuring plan (“2005 Restructuring”), and recorded a net restructuring charge of $0.8 million for severance related costs and costs associated with closing facilities and disposing of assets.

Substantially all the activities related to the 2002 Restructuring and the 2005 Restructuring have been completed. However, the Company continues to be obligated under facility leases that expire from 2007 through 2014. The accrual remaining at September 30, 2007 includes approximately $0.1 million in respect of the 2002 Restructuring and the 2005 Restructuring plans associated with costs attributable to remaining obligations through the year 2014 associated with offices exited or downsized, offset by the Company’s estimates of future income from sublease agreements. The remaining accrual assumes as of September 30, 2007 that the Company will receive $2.7 million in sublease income, all of which is committed. During the second quarter of 2007, the Company recorded a reduction in the restructuring payable of $0.5 million, mainly in respect of the over accrual of costs associated with tenant improvements

During the second quarter of 2007, the Company took steps towards recognizing integration related and other cost synergies by implementing a workforce reduction that eliminated approximately 60 positions worldwide and consolidated certain facilities in the U.K., by adopting a restructuring plan (“2007 Restructuring”), and recorded restructuring charge of $1.8 million (net of $0.5 million recovery of a prior restructuring charge). Approximately $1.3 million of the charge was related to severance and headcount related costs and $0.5 million was related to non-headcount related expenses. The Company recorded the severance charges related to these headcount reductions as an operating expense in the second and third quarters of 2007. The facilities and other non headcount related charges were recorded as operating expense in the second and third quarters of 2007. The Company paid the majority of severance and related costs in the third quarter with the remaining costs be paid in the fourth quarter of

2007. The cash payments related to the consolidation of facilities will be made over the term of the related leases, the longest of which terminates in December 2007.

The Company also recorded a restructuring charge of $0.5 million related to personnel severance costs in connection with the acquisition of certain assets and liabilities of the US wireless engineering services business of WFI. The Company included these severance charges in goodwill. See Note 4, Business Combinations.

A reconciliation of the restructuring activities is as follows:

	Severance			Other			Total
				Facilities and
				Other Non-
				Headcount
	Severance			Related Items			Total
	(in thousands)
Restructuring payable as of December 31, 2005	$	22		$	1,542		$	1,564
Accrued restructuring as of January 1, 2007	$	3		$	1,033		$	1,036
Restructuring charge		—991			~~108~~609			~~108~~1,600
Reversal of excess severance		~~(19~~—	)		—(493	)		(19493	)
Charges against the provision:
Payments for excess office space, net of sublease income		—			(645	)		(645	)
Other		—			28			28
Restructuring payable as of December 31, 2006		3			1,033			1,036
Restructuring charge		1,328			531			1,859
Reversal of excess facilities provision		—			(495	)		(495	)
Restructuring charge on acquisition		545			—			545
Charges against the provision:
Payments for excess office space, net of sublease income		—			(~~624~~824	)		(~~624~~824	)
Payments for severance		(1,~~196~~548	)		—			(1,~~196~~548	)
Other		612			611			1223
Restructuring payable as of September 30, 2007	$	686		$	451		$	1,137
Accrued restructuring as of December 31, 2007		3			336			339
Restructuring charge		20			406			426
Charges against the restructuring liability:
Payments for excess office space, net of sublease income		(20	)		(70	)		(90	)
Accrued restructuring as of March 31, 2008	$	3		$	672		$	675

At ~~September~~March 3031, ~~2007~~2008 and December 31, ~~2006~~2007, the ~~restructuring~~ ~~payable~~accrued restructuring was classified as follows:

	September 30,		December 31,
	March 31,		December 31,
	2007		2006
	2008		2007
	(in thousands)
Accrued restructuring current	$	~~988~~393	$	~~949~~261
Accrued restructuring non-current		~~149~~282		8778
Accrued restructuring total	$	~~1,137~~675	$	~~1,036~~339

NOTE 9. FACTORING AGREEMENT

During May 2007, the Company entered into a factoring agreement (the “Agreement”) with Barclays Factoring, S.A., (“Barclays”) whereby the Company may sell eligible accounts receivable to Barclays on a revolving basis up to a maximum of 800 thousand Euros. Under the terms of the Agreement, accounts receivable are sold to Barclays without recourse at their face value less interest of EURIBOR at 90 days plus 0.9% and a commission of 0.15%. Accounts receivable sales were approximately 413 thousand Euros during the three months ended September 30, 2007.

NOTE 10. LINES OF CREDIT AND NOTES PAYABLE

As discussed in Note 5, Discontinued Operations, in connection with the sale of the U.S. Network Deployment business, the Company entered into a loan agreement with Nokia, whereby Nokia would advance up to a maximum of $4.2 million. Advances to the Company under the loan agreement will be repaid as Nokia collects, and remits to

the Company, the unbilled accounts receivable transferred at closing. In consideration for Nokia providing advances under the loan agreement, the Company accrued an initial fee of $0.2 million as interest expense. The Company received advances of approximately $4.2 million. At December 31, 2006, $3.2 million was outstanding and is classified as a Note Payable in the accompanying consolidated financial statements. The loan is secured by the rights of LCC International, Inc. and LCC Wireless Design Services, LLC in certain unbilled accounts receivable which were sold to Nokia in the transaction, as well as by any amounts in the disbursement account established pursuant to the loan agreement. The note payable was repaid in full as of June 30, 2007.

On July 18, 2005, the Company, and Commerce Funding Corporation (“CFC”) entered into an Assignment and Transfer of Receivables Agreement (the “CFC Agreement”) pursuant to which the Company may elect to transfer certain of its accounts receivable to CFC in exchange for cash. At the same time, the Company, LCC Wireless Design Services, LLC, a subsidiary of the Company, and CFC entered into a Fee Agreement and each also entered into a General Continuing Guaranty Agreement (together with the CFC Agreement, the “Financing Documents”).

On September 14, 2005, the Financing Documents were amended to increase the maximum amount which the Company may owe to CFC by an additional $1.0 million, for a total of $4.0 million. The terms and conditions were the same as provided for in the original Fee Agreement except that the monthly administration fee increased from approximately $23,000 to $30,000. On February 13, 2006, the Financing Documents were amended to increase the maximum amount by which the Company may owe to CFC by an additional amount of $1.0 million for a total of $5.0 million. The Terms and Conditions were the same as provided for in the amended Fee Agreement except that the monthly administration fee increased from $30,000 to approximately $38,000. Advances made to the Company or LCC Wireless Design Services, LLC have been utilized for working capital purposes, including the payment of amounts owed to subcontractors under certain customer contracts where the payments from the customer have been delayed or are otherwise not yet due. On March 9, 2007, the Company terminated this Agreement.

In June 2006, Detron Belgium, which the Company acquired on December 29, 2006, entered into a credit agreement with ING bank. Under this agreement, Detron Belgium may borrow annually approximately $36,000, which amount was advanced to the Company at an interest rate of 4.8% per year. This is repayable in twelve monthly payments, the final payment being due in July 2007. In December 2006, Detron Belgium entered into a credit agreement with ING Bank. Under this agreement, Detron Belgium may borrow annually up to approximately $66,000 which amount was advanced to the Company at an interest rate of 5.6% per year, repayable in twelve monthly payments, the final payment being due in December 2007. As of September 30, 2007, Detron Belgium had $0.1 million outstanding under these lines of credit.

In January 2007, Detron Netherlands, entered into a credit agreement with ABN AMRO Bank (“ABN AMRO”) whereby the Company was the beneficiary of an overdraft credit facility, (“Facility A”), and a loan facility, (“Facility B”). The maximum amount which Detron Netherlands may have outstanding under Facility A is $2.0 million such that this is not to exceed 70% of the accounts receivable that were pledged as security for the loan. Interest on amounts outstanding under this Facility A are calculated at a rate equal to ABNAMRO’s adjustable Euro basis interest rate plus 1.5%. This was 6.25% at September 30, 2007. Approximately $0.1 million was advanced to the Company under Facility A. Under Facility B, ABN AMRO advanced to Detron Netherlands $0.5 million. Interest on the loan is calculated at a fixed interest rate of 5.5% per year. The loan is repayable over two years, the first payment was due on May 1, 2007. Both of these facilities are secured by a pledge on the accounts receivable and fixed assets of Detron Netherlands. At September 30, 2007, there was $0.4 million outstanding under Facility B.

On March 9, 2007, the Company entered into a revolving credit facility (“the new credit facility”) with Bank of America, N.A. (“Bank of America”) and terminated the Company’s existing credit facility with CFC. Under the terms of the new credit facility, the aggregate amount owed to Bank of America by the Company, at any time may not exceed $6.5 million. The term of the new credit facility is through September 15, 2007. LCC may from time to time borrow under this facility, and these loans may be base rate loans, Eurodollar base rate loans or Eurodollar daily floating rate loans. Interest on base rate loans is calculated using a fluctuating rate per annum equal to the higher of the Federal Funds Rate plus 0.50% or the prime rate as determined by Bank of America. Interest on Eurodollar base rate loans is calculated using a per annum rate equal to the British Bankers’ Association LIBOR rate. Interest on Eurodollar daily floating rate loans is calculated using a rate per annum equal to the quotient

obtained by dividing the Eurodollar daily floating base rate, which is the British Bankers’ Association LIBOR rate, by one minus the Eurodollar reserve percentage. The reserve percentage is issued by the Federal Reserve to lenders from time to time.

The new credit facility was amended on May 29, 2007 (the “amended credit facility”), in connection with the Company’s purchase of certain assets and liabilities of WFI’s U.S. wireless engineering services business. Under the terms of the amended credit facility, the aggregate amount owed to Bank of America by the Company, at any time may not exceed $30.0 million. The amended credit facility requires that the Company maintain certain net worth and working capital covenants and provide audited annual financial statements and unaudited quarterly financial statements to Bank of America. In addition the Company is required to make mandatory repayments of the amounts due in the event that the total amount owing under the amended credit facility exceeds the borrowing base amount as defined within the agreement. At September 30, 2007, the Company was not in compliance with the amended credit facility due to violations of certain financial performance covenants and the failure to provide the annual audited and periodic unaudited financial statements of the Company as required by the amended credit facility. The Company was unable to provide the financial statements due to a delay in finalizing its annual audited financial statements, mainly resulting from the need for additional time for the Company’s management to complete its assessment of the effectiveness of its internal controls over financial reporting and for the auditors to complete its required testing and review procedures with respect to such internal controls as of December 31, 2006, in accordance with Section 404 of the Sarbanes Oxley Act (SOX) 2002. On November 30, 2007, the Company further amended and restated its outstanding credit facility with Bank of America, to among other things, provide for a bank waiver and amend certain covenants in the agreement for all events of default, as described in Note 18, Subsequent Events. At September 30, 2007, there was $28.5 million outstanding under the amended credit facility at an effective interest rate of 8.67%.

On June 1, 2007, the Company issued a Subordinated Promissory Note (“Note”) to WFI in connection with the purchase of the WFI US Engineering Business (see Note 4). The original amount of the Note was $21.6 million. Such amount was subsequently increased to $23.9 million as result of a purchase price adjustment agreed to by the Company on January 22, 2008, related to the value of certain assets transferred. The note has interest payable at rates based on the British Bankers Associated Rate (“BBA LIBOR”) that escalate on various dates from BBA LIBOR plus 4% on June 1, 2007 to BBA LIBOR plus 13% on January 1, 2010 and which rate is increased by an additional 1% every six (6) months thereafter. This Note was subsequently sold by WFI to a third party. The Note is subordinated to the credit facility with Bank of America which among other things limits cash payments of interest or principle until certain conditions in the credit facility with Bank of America are met. The note is payable on June 1, 2010.

NOTE 11. INCOME TAXES — ADOPTION OF FIN 48

The Company files a consolidated federal income tax return with all of its US subsidiaries. The Company has subsidiaries that file tax returns in several foreign jurisdictions. The Company and its subsidiaries also file tax returns in local tax jurisdictions in many of the countries in which they do business. The Internal Revenue Service completed examinations of the Company’s U.S. income tax returns through ~~2002~~2003. Many of the Company’s subsidiaries’ tax returns have been examined through various dates. Generally, we are currently open to audit under the statute of limitations by by the Internal Revenue Service for the years ending December 31, ~~2003~~2004 to 2006. In addition we are currently open to audit under the statute of limitations in various foreign jurisdictions for approximately six years.

The Company adopted the provisions of FIN 48 on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized a $0.9 million increase in the liability for unrecognized tax benefits, which was accounted for as an addition to the January 1, 2007 accumulated deficit balance. The total amount of unrecognized tax benefits as of the date of the ~~adoption~~ adoption was approximately $0.9 million and includes both income taxes and tax penalties. Additionally, at January 1, 2007, the Company’s deferred tax asset and corresponding valuation allowance were reduced by $1.9 million for cumulative FIN 48 adjustments related to years prior to 2007 that were not recognized as a cumulative adjustment to the accumulated deficit at January 1, 2007. In years prior to 2007, interest and penalties related to adjustments to income ~~taxes~~tax as filed has not been significant. The Company intends to include such interest and penalties in its tax provision.

There have been no changes in the liability for unrecognized tax benefits during the quarter ~~or nine months~~ ended ~~September~~March 3031, 2008. ~~2007~~

~~NOTE 12. SHARE-BASED COMPENSATION~~15

~~The~~NOTE ~~Company~~12. ~~has~~OTHER ~~recognized~~CURRENT ~~compensation expense for continuing~~LIABILITIES ~~operations for all stock options and restricted stock units for the three and nine months ended September 30, 2007 and 2006 as follows:~~

	Americas						EMEA				Non Reportable Segments				Total
	2007			2006			2007		2006		2007		2006		2007		2006
	(in thousands)
Three Months ended September 30,
Cost of revenues	$	12		$	30		$	6	$	28	$	—	$	—	$	18	$	58
Sales and marketing		(1	)		7			22		30		9		17		30		54
General and administrative		8			(44	)		70		98		105		306		183		360
	$	19		$	(7	)	$	98	$	156	$	114	$	323	$	231	$	472

At March 31, 2008 and December 31, 2007, other current liabilities consisted of the following:

	Americas				EMEA				Non Reportable Segments				Total
	March 31,		December 31,
	2007		2006		2007		2006		2007		2006		2007		2006
	2008		2007
	(in thousands)
Nine Months ended September 30,
Due to WFI	$	1,837	$	1,837
Cost of revenues	$	40	$	90	$	79	$	65	$	—	$	—	$	119	$	155
Interest payable		2,449		1,685
Sales and marketing		21		43		66		72		76		26		163		141
Deferred rent		933		862
General and administrative		29		40		209		264		804		699		1,042		1,003
Other		1,128		1,703
	$	90	$	173	$	354	$	401	$	880	$	725	$	1,324	$	1,299
Other current liabilities	$	6,347	$	6,087

NOTE 13. ~~SHAREHOLDERS’~~SHARE-BASED ~~EQUITY~~COMPENSATION

On The ~~April 19, 2007, the~~ Company ~~raised~~has ~~$17.0 million through~~recognized ~~the~~compensation ~~sale~~expense offor ~~5,100,000~~continuing ~~newly~~operations ~~issued~~for ~~Class A~~all ~~common shares~~options ~~of the Company at a price of $3.35 per share in a~~and ~~private~~restricted ~~placement.~~stock Asunits ~~part~~for of the ~~transaction~~three ~~the~~months ~~Company~~ended ~~is required~~March 31, to2008 ~~file~~and a2007 ~~registration~~as ~~statement covering the common~~follows: ~~stock within 45 days of the closing. The~~


	Americas				EMEA				Non Reportable Segments				Total
	2008		2007		2008		2007		2008		2007		2008		2007
					(in thousands)
Three Months ended March 31,

Cost of revenues	$	20	$	9	$	24	$	25	$	—	$	—	$	44	$	34
Sales and marketing		7		16		25		23		11		58		43		97
General and administrative		8		11		60		69		200		523		268		603

	$	35	$	36	$	109	$	117	$	211	$	581	$	355	$	734

~~Company~~NOTE ~~was obligated to register the shares issued in the offering to the participating shareholders by defined dates or be subject to cash penalty payments~~14. ~~Due~~OTHER toCOMPREHENSIVE ~~the~~INCOME ~~delay in filing~~(LOSS) its 2006 Form 10-K and subsequent 2007 Quarterly Form 10-Q’s, the Company has not been in compliance with its filings and as a result, has not been able to register the shares and meet these obligations. The agreement called for a cash penalty of 1% per month, up to 10%, beyond June 3, 2007 until a registration statement was filed for the investors’ shares and an additional cash penalty of 1% per month beyond August 20, 2007 until the registration statement is declared effective to a maximum of 10% penalty in each of these two periods. In accordance with EITF 00-19-2 Accounting for Registration Payment Arrangements, the Company accrues for interest penalties under SFAS No. 5, Accounting for Contingencies, when they are probable and estimable. At September 30, 2007, the liquidated damages were probable and estimable, and the Company accrued approximately $1.0 million as of that date.

On Comprehensive ~~December~~income (loss) ~~27,~~is ~~2007,~~defined as net income (loss) plus the ~~Company~~change ~~reached~~in anequity ~~agreement~~of ~~with~~a ~~its~~business ~~private~~enterprise ~~placement~~during ~~shareholders~~a ~~which~~period ~~alleviated~~from ~~the Company’s~~transactions ~~obligation~~and toother ~~pay~~events ~~the~~and ~~penalties~~circumstances infrom non-owner ~~cash~~sources. ~~which would~~Other ~~have~~comprehensive ~~amounted~~income (loss) refers to arevenues, ~~maximum~~expenses, ofgains $3and losses that under U.~~4 million~~S. ~~Under~~GAAP ~~the new~~are ~~agreement,~~included ~~the~~in ~~Company~~comprehensive ~~will~~income ~~exchange~~(loss), ~~each~~but ~~share~~excluded offrom ~~the~~net income ~~class A~~(loss). ~~common~~Accumulated ~~stock~~other ~~(issued~~comprehensive atincome ~~$3.35~~(loss) ~~per~~consists ~~share)~~solely ~~for~~of foreign currency 1translation adjustments.~~125 shares~~ ofComprehensive aincome ~~new~~(loss) for ~~series~~the ofthree ~~preferred~~months ~~stock~~ended March 31, as2008 and ~~described~~2007 inis ~~Note 18,~~as ~~Subsequent Events.~~follows:

Note 14. SEGMENT REPORTING


	Three months ended
	March 31,
	2008			2007
	(in thousands)
Net loss	$	(6,189	)	$	(9,286	)
Other comprehensive loss, net of tax:
Change in foreign currency translation gains		2,622			436

Other comprehensive loss	$	(3,567	)	$	(8,850	)

NOTE 15. RELATED PARTY TRANSACTIONS

The Rajendra and Neera Singh Charitable Foundation (the “Foundation”) owns more than 10% of our equity shares and up to the third quarter of 2007 two members of the Singh family, Dr. Rajendra and Neera Singh, served as members of our Board of Directors. In connection with the Company’s initial public offering in 1996, the Company agreed to allow the employees of Telcom Ventures, a company controlled by the Singh family, to continue to participate in the Company’s employee benefit plans in exchange for full reimbursement of its cash costs and expenses. The Company billed Telcom Ventures approximately $18,000 and $20,000 during the three months ended March 31, 2008 and 2007, respectively. The Company received reimbursements from Telcom Ventures of $6,000 and $20,000 during the three months ended March 31, 2008 and 2007, respectively. At March 31, 2008 and December 31, 2007, outstanding amounts associated with payments made by the Company under this agreement were approximately $6,000 and $7,000, respectively, and are included as due from related parties and affiliates within the condensed consolidated balance sheets in the accompanying financial statements. Also included in due from related parties and affiliates are employee advances of $48,000 and $25,000 at March 31, 2008 and December 31, 2007, respectively.

The Company provided services to two customers where Telcom Ventures had a minority investment. For the three months ended March 31, 2008 and 2007, revenues earned from these customers were approximately $70,000 and $56,000, respectively. Billed or unbilled receivables outstanding from this customer were approximately $31,000 as of March 31, 2008, and $35,000 as of December 31, 2007, and are included in trade accounts receivable and unbilled receivables in the accompanying condensed consolidated balance sheets.

NOTE 16. COMMITMENTS AND CONTINGENCIES

Existing contractual obligations are primarily limited to operating leases, primarily for office facilities, and to a lesser extent, test equipment computers and office furniture.

The Company is a party to various litigation matters and claims that are normal in the course of operations and while the results of such litigation matters and claims cannot be predicted with certainty, the Company believes that the final outcome of such matters will not have a material adverse impact on the consolidated financial position, results of operations or cash flows of the Company.

NOTE 17. SEGMENT REPORTING

SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information established standards for reporting information about the operating segments in interim and annual financial reports issued to stockholders. It also established standards for related disclosures about products and services and geographic areas. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and assess performance. The Company’s chief operating decision-making group is the Executive Committee, which comprises the Chief Executive Officer, the Executive Vice President and the Company’s Senior Vice Presidents.

The Company’s operating segments are defined geographically by region, namely the Americas region and the EMEA region. EMEA provides design and deployment services, operations and maintenance services and technical consulting services. The Americas region provides similar services with the exception of deployment and field operations and maintenance services.

The Company evaluates performance based on stand alone operating segment profit or loss from operations before income taxes excluding nonrecurring gains and losses, and generally accounts for inter-segment sales and transfers as if the sales or transfers were to third parties at current market prices. Interdivisional transactions are eliminated on consolidation. Revenues are attributed to geographic areas based on the location of the assignment.

Segment detail is summarized as follows:

													Operating
	Americas						EMEA						Segment Total
	2007			2006			2007			2006			2007			2006
	2008			2007			2008			2007			2008			2007
	(in thousands)
Three Months ended September 30,
Three Months Ended March 31,
Revenues:
From external customers	$	1612,~~442~~123		$	74,~~117~~173		$	2529,~~392~~811		$	2420,~~816~~467		$	41,~~834~~934		$	3124,~~933~~640
Inter-segment revenues		—			—			—			—			—			—
Total revenues	$	1612,~~442~~123		$	74,~~117~~173		$	2529,~~392~~811		$	2420,~~816~~467		$	41,~~834~~934		$	3124,~~933~~640
Income (loss) before taxes	$	~~(984~~26	)	$	(~~172~~1,869	)	$	(21,~~684~~155	)	$	4(1,~~622~~267	)	$	(31,~~668~~129	)	$	4(3,~~450~~136	)
Total assets	$	6656,~~560~~971		$	199,~~427~~418		$	7881,~~928~~543		$	7882,~~615~~622		$	~~145~~138,~~488~~514		$	9892,~~042~~040

A reconciliation of totals reported for the operating segments to the applicable line items in the condensed consolidated financial statements is as follows: 19

												Operating
	Three Months Ended
	Americas						EMEA					Segment Total
	March 31,
	2007			2006			2007			2006		2007			2006
	2008			2007
	(in thousands)
Nine Months ended September 30,
Revenues:
Revenues:
Revenues for reportable segments	$	41,934		$	24,640
From external customers	$	29,253		$	24,524		$	66,938		$	77,149		96,191			101,673
Revenues for non-reportable segments		—			—
Inter-segment revenues		—			—			—			—		—			—
Total consolidated revenues	$	41,934		$	24,640
Total revenues	$	29,253		$	24,524		$	66,938		$	77,149	$	96,191		$	101,673
Income (loss) before income taxes:
Income (loss) before taxes	$	(4,202	)	$	117		$	(6,558	)	$	9,878	$	(10,760	)	$	9,995
For reportable segments	$	(1,129	)	$	(3,136	)
For non-reportable segments		(4,594	)		(3,451	)
Total (loss) before taxes	$	(5,723	)	$	(6,587	)

17 ~~A reconciliation of totals reported for the operating segments to the applicable line items in the consolidated financial statements is as follows (in thousands):~~

	Three Months Ended						Nine Months Ended
	Three Months ended March 31,
	September 30,						September 30,
	2008			2007
	2007			2006			2007			2006
	(in thousands)
Revenues:
Assets:
Revenues for reportable segments	$	41,834		$	31,933		$	96,191		$	101,673
Assets for reportable segments	$	138,674		$	92,040
Revenues for non-reportable segments		—			—			—			—
Assets not attributable to reportable segments:
Total consolidated revenues	$	41,834		$	31,933		$	96,191		$	101,673
Cash and cash equivalents		217			466
Income (loss) before income taxes:
Restricted cash		—			9
For reportable segments	$	(3,668	)	$	4,450		$	(10,760	)	$	9,995
Deferred and prepaid tax assets		2,351			1,135
For non-reportable segments		(4,533	)		(2,808	)		(10,769	)		(8,420	)
Property and equipment		450			669
Total income (loss) before taxes	$	(8,201	)	$	1,642		$	(21,529	)	$	1,575
Receivables		110			253
Assets:
Prepaids and other		957			563
Assets for reportable segments							$	145,488		$	98,042
Total consolidated assets	$	142,759		$	95,135
Assets not attributable to reportable segments:
Cash and cash equivalents								1,179			2,366
Restricted cash											37
Deferred and prepaid tax assets								2,410			1,385
Property and equipment								617			620
Receivables								129			288
Prepaids and other								814			479
Total consolidated assets							$	150,637		$	103,217

NOTE 1518. ~~RELATED~~MANAGEMENT’S ~~PARTY~~PLANS, ~~TRANSACTIONS~~LIQUIDITY AND BUSINESS RISKS

~~The~~ As ~~Rajendra and Neera Singh Charitable Foundation (the “Foundation”) owns more than 10%~~ of ~~our~~March 31, ~~equity~~2008, ~~shares and during~~ the ~~third~~Company ~~quarter~~had ofan ~~2007~~accumulated ~~two~~deficit ~~members~~ of ~~the~~approximately ~~Singh family, Dr~~$102.4 ~~Rajender~~ million and ~~Neera~~had ~~Singh,~~incurred ~~served~~a asloss ~~members of our Board of Directors. In connection with the Company’s initial public offering~~ in ~~1996,~~ the ~~Company~~quarter ~~agreed~~then toended ~~allow the employees~~ of ~~Telcom~~$6.2 million ~~Ventures,~~and aused ~~company~~$1.9 million ~~controlled by the Singh family, to continue to participate~~ in ~~the~~ ~~Company’s~~operating ~~employee~~cash ~~benefit~~flows ~~plans in exchange~~ for ~~full reimbursement~~the ofthree ~~our~~months ~~cash~~then ~~costs and expenses~~ended. The Company ~~billed Telcom~~had ~~Ventures~~ approximately $~~19,000 and $29,000~~5.7 million ~~during~~available ~~the~~in ~~three~~operating ~~months~~cash ~~ended~~and ~~September 30,~~approximately ~~2007 and September~~$1.3 ~~30,~~million ~~2006,~~of ~~respectively,~~borrowing ~~and~~availability ~~approximately~~under ~~$58,000 and~~its ~~$105,000~~debt facilities.

Despite 20a working capital deficit of $2.8 million, the Company believes that the availability under its bank lines of credit and working capital , excluding the $21.9 million of debt that was reclassified in accordance with U.S. GAAP, will provide sufficient cash flow to carry out its operations for the next 12 months.

~~during~~ Accordingly, the ~~nine~~carrying ~~months~~value ~~ended~~of ~~September 30,~~the ~~2007~~assets and liabilities in the accompanying condensed ~~September 30,~~balance ~~2006,~~sheet ~~respectively,~~do ~~for~~not ~~payments~~reflect ~~made~~any byadjustments should the Company ~~pursuant~~be unable to ~~this~~meet ~~agreement~~its future operating cash needs in the ordinary course of business. The Company ~~received~~continues to take various ~~reimbursements~~actions ~~from~~to ~~Telcom~~align ~~Ventures~~its ofcost ~~approximately~~structure ~~$18~~to appropriately match its expected revenues,~~000~~ ~~and~~including ~~$43,000~~limiting ~~during~~its ~~the~~operating ~~three~~expenditures ~~months~~and ~~ended~~controlling its capital expenditures. Any future ~~September 30~~acquisitions, ~~2007~~other ~~and~~significant ~~September 30,~~unplanned ~~2006~~costs ~~and approximately~~or ~~$51,000~~cash ~~and~~requirements ~~$0.1 million~~may ~~during~~require the ~~nine~~Company to ~~months~~raise ~~ended~~additional ~~September 30,~~funds ~~2007~~through ~~and~~the ~~September 30, 2006.~~issuance Atof ~~September 30,~~debt ~~2007~~ and ~~December 31,~~equity ~~2006, outstanding~~securities. ~~amounts~~There ~~associated~~can ~~with~~be ~~payments~~no assurance ~~made~~that bysuch ~~the~~financing ~~Company under~~will ~~this~~be ~~agreement~~available ~~were~~on ~~approximately~~terms ~~$8,000~~acceptable ~~and~~to ~~$1,000,~~the ~~respectively~~Company, ~~and~~or ~~are~~at ~~included~~all. asIf additional ~~due~~funds ~~from~~are ~~related parties~~raised ~~and~~by ~~affiliates~~issuing ~~within~~equity ~~the~~securities, ~~condensed~~significant ~~consolidated~~dilution ~~balance~~to ~~sheets~~the inexisting ~~the~~stockholders ~~accompanying~~may ~~financial statements~~result.

~~During~~NOTE ~~the three months ended September 30, 2007 and 2006, the Company provided services to two customers where Telcom Ventures has a minority investment~~19. ~~Revenues~~SUBSEQUENT ~~earned from these~~EVENTS customers were insignificant for the three months ended September 30, 2007 and September 30, 2006. Revenues earned from these customers were approximately $0.1 million and $0.3 million for the nine months ended September 30, 2007 and September 30, 2006, respectively. Billed and unbilled receivables outstanding were approximately $0.1 million as of September 30, 2007 and $0.1 million as of December 31, 2006, and are included in trade accounts receivable and unbilled receivables in the accompanying condensed consolidated balance sheets.

On April 4, 2008 the Company filed a current report on Form 8-K disclosing that, in accordance with NASDAQ’s rules, the Company received a NASDAQ staff determination letter stating that the ~~NOTE~~Company was not in compliance with NASDAQ Marketplace Rule 4310(c) (14) 16because it had not timely filed with NASDAQ the 2007 Form 10-K. The Company requested and was granted a hearing before the ~~COMMITMENTS~~NASDAQ ~~AND~~Listing ~~CONTINGENCIES~~Qualifications Panel (the “Panel”). The Company subsequently filed the 2007 Form 10-K on April 29, 2008 and on May 1, 2008 the Company announced that it had received notice from NASDAQ that it is now compliant.

On May 14, 2008 the Company filed a current report on Form 8-K disclosing that Mr. Dean Douglas submitted a notice of resignation to the Board of Directors resigning his position as President, Chief Executive Officer and Director of the Company, effective June 6, 2008. The Company announced isthe apromotion ~~party~~of Mr. Kenneth Young to ~~various~~LCC ~~legal~~President ~~proceedings~~and Chief Operating Officer, effective immediately. Mr. Young will lead the organization on a worldwide basis and ~~claims~~report ~~incidental~~directly to ~~our~~Ms. Julie ~~business~~Dobson, Chairperson of the Board. The ~~Company’s~~Board ~~management~~intends ~~does~~to initiate a CEO search ~~not~~later ~~believe~~this ~~that~~month. ~~these~~On ~~matters~~the effective date of Mr. Douglas’ resignation, Ms. Dobson will ~~have~~assume the post of interim CEO until a ~~material~~new ~~adverse~~CEO is announced. Concurrent with Ms. ~~affect~~Dobson onassuming ~~our~~the ~~consolidated~~interim ~~results~~CEO ofposition, ~~operations~~she orresigned ~~financial~~her committee ~~condition~~positions.

On May 16, 2008 the Company filed a current report on Form 8-K disclosing that, in accordance with NASDAQ’s rules, the Company received a NASDAQ staff determination letter stating that the Company was not in compliance with NASDAQ Marketplace Rule 4310(c) (14) because it had not timely ~~NOTE~~filed with NASDAQ the Form 10-Q for the quarter ended March 1731, 2008. The Company requested and was ~~MANAGEMENTS’S~~granted ~~PLANS~~a hearing on July 10, ~~LIQUIDITY~~2008 ~~AND~~before ~~BUSINESS~~the ~~RISKS~~NASDAQ Listing Qualifications Panel (the “Panel”).

As On ~~of September~~May 3019, ~~2007,~~2008 the Company ~~had~~filed ana ~~accumulated~~current ~~deficit of~~report ~~approximately~~on ~~$90~~Form 8-K disclosing that Dr.1 ~~million~~Rajendra (Raj) ~~and~~Singh ~~had~~advised ~~incurred~~the Company of his decision not to stand for re-election as a ~~net~~director ~~loss~~at ofthe ~~$24.6 million~~Company’s ~~and~~2008 ~~used~~annual ~~$18.4 million~~meeting, inwhich ~~operating~~has ~~cash flows~~not inyet ~~the~~been ~~nine~~scheduled ~~months~~but ~~then~~which ~~ended~~is ~~2007.~~expected ~~The~~to ~~Company~~be ~~had~~held ~~approximately~~this $5summer.5 Dr. ~~million~~Singh ~~available~~has inindicated ~~operating~~his ~~cash~~intention ~~and approximately~~to ~~$1.5 million~~continue ofto ~~borrowing~~serve ~~availability~~as ~~under~~a ~~its~~director until the ~~debt~~2008 ~~facilities~~annual meeting.

On ~~The~~June ~~company~~10, ~~believes~~2008 ~~that~~ the ~~combination~~Company offiled ~~the~~a ~~availability~~current ~~under~~report on Form 8-K ~~its~~disclosing ~~bank~~that ~~lines,~~Mr. ~~the~~Peter asA. ~~well~~Deliso assubmitted ~~its~~a ~~$29.9 million~~notice of ~~working~~resignation ~~capital~~to ~~will~~Mr. ~~provide~~Dean ~~sufficient~~Douglass ~~cash~~resigning ~~flow~~his toposition ~~carry~~as ~~out~~Senior ~~its~~Vice ~~operations~~President, ~~for~~New ~~the~~Ventures, ~~next~~General 12Counsel & Secretary effective June ~~months~~30, 2008.

On ~~Accordingly~~June 18, ~~the~~2008, ~~carrying value of~~ the ~~assets and liabilities in the accompanying balance sheet do not reflect any adjustments should the~~ Company befiled ~~unable~~a tocurrent ~~meet~~report ~~its~~on ~~future~~Form ~~operating cash needs in the~~8-K ~~ordinary~~disclosing ~~course~~that ofit ~~business.~~had ~~The~~signed ~~Company~~an ~~continues~~agreement towith ~~take~~True ~~various actions to align its cost structure to appropriately match its expected revenues~~Position, ~~including limiting its operating expenditures and~~a ~~controlling~~leader ~~its~~in ~~capital~~high ~~expenditures.~~performance ~~Any~~wireless ~~future~~location ~~acquisitions~~services, ~~other significant~~to ~~unplanned costs or cash requirements may require the~~acquire, ~~Company~~outsource ~~to raise additional funds through the issuance of debt~~ and ~~equity~~ ~~securities.~~provide ~~There~~RF ~~can~~engineering beservices noto ~~assurance~~True ~~that such financing will~~Position’s beE-911 ~~available on terms acceptable to the Company, or at all~~U.S. ~~If additional~~GSM ~~funds are raised by issuing equity securities, significant dilution to the existing stockholders may result~~Carriers.

~~NOTE~~ 18. ~~SUBSEQUENT EVENTS~~

OnITEM ~~October 11,~~2: 2007, the Company filed a current report on Form 8-K disclosing that, LCC UK Limited (“LCC UK”), a subsidiary of the Company, had served a twelve-month notice of termination to SEMAB Management Srl (“SEMAB”), a private limited liability company controlled by Mr. Carlo Baravalle, pursuant to the terms of a Consulting Agreement between LCC UK and SEMAB, dated December 23, 2004, (the “SEMAB Consulting Agreement”). Mr. Baravalle provided services to LCC UK and the Company under the terms of the SEMAB Consulting Agreement since December 23, 2004. On December 5, 2007, the Company filed a Current Report on Form 8-K disclosing that on November 29, 2007 the Company had executed a Settlement Agreement pursuant to which Mr. Baravalle ceased to serve as the CompanyMANAGEMENT’~~s Executive~~S ~~Vice~~DISCUSSION ~~President,~~AND ~~Europe,~~ANALYSIS ~~Middle-East,~~OF ~~Africa~~FINANCIAL ~~and Asia-Pacific~~CONDITION ~~and,~~AND ~~effective~~RESULTS ~~November 29,~~OF ~~2007, he assumed~~OPERATIONS ~~the role of Senior Advisor to the Chief Executive Officer focused on business development activities primarily in the Middle-East.~~

On November 12, 2007, in connection with the Company’s decision to sell its Brazilian subsidiary, LCCI Brazil, under the terms agreed in the Sale and Purchase Agreement, executed on October 27, 2006, the Company received notice from the buyers, that they have decided not to proceed with the acquisition of LCCI Brazil. The Company made the decision to sell or liquidate LCCI Brazil in July 2006, and is working on alternatives including an opportunity to sell the entity to another interested party under similar terms and conditions. As of September 30, 2007, in management’s opinion, the carrying value of the assets and liabilities held for sale as reported in the unaudited consolidated financial statements as of September 30, 2007, approximate fair value. The Company is currently in negotiations with this buyer and intends to continue to actively pursue the sale of LCCI Brazil.

On November 19, 2007, the Company filed a current report on Form 8-K disclosing that on November 13, 2007, the Company received an additional NASDAQ staff determination letter stating that the Company was not in compliance with NASDAQ Marketplace Rule 4310(c)(14) because it had not timely filed its Quarterly Report on Form 10-Q for the period ended September 30, 2007 with NASDAQ.

On November 30, 2007, the Company further amended and restated its outstanding credit facility with Bank of America, to among other things, provide for a bank waiver and amend certain covenants in the agreement for all events of default. As amended, the facility provides for revolving loans to $21.95 million, which may be borrowed, repaid and reborrowed by the Company on a revolving basis until November 29, 2009. It also provides for a term loan of $6.5 million with scheduled principal payments of $3.5 million on June 1, 2008, $1.0 million on each of September 1 and December 1, 2008 and March 1, 2009, with any remaining balance payable on November 29, 2009. The amendment increased the applicable interest rate on borrowings by 1.00% per annum, amended the financial covenants and required the payment to the bank of a fee of up to $0.6 million. In addition, the Company is required to maintain a so-called “lockbox arrangement” pursuant to which all monies payable to the Company in the U.S. plus certain unrestricted cash balances of the Company’s non-U.S. subsidiaries in excess of $6.0 million must be paid into a specially designated account and automatically applied to the payment of amounts outstanding under the revolving portion of the credit facility as well as any other obligations under the credit facility that are due and owing.

On December 12, 2007, the Company filed the 2006 10-K with the SEC. On December 12, 2007, the Company also announced that Grant Thornton LLP had been appointed as the Company’s new auditors effective immediately, which was necessary to complete the filing of the Company’s Form 10-Qs for the fiscal quarters ended March 31, June 30, and September 30, 2007.

On December 20, 2007, the Company filed a current report on Form 8-K disclosing that the NASDAQ Listing and Hearing Review Council (the “Listing Council”) notified the Company on December 19, 2007 that the Listing Council had determined to exercise its discretionary authority, under Rule 4802(b), to grant the Company an exception to demonstrate compliance with all of the NASDAQ Global Market continued listing requirements until February 19, 2008, the maximum amount of time the Listing Council can grant the Company. However, on February 14, 2008, the Company received a letter advising it that the NASDAQ Board of Directors has decided to review the Council’s December 19, 2007 decision and stay delisting pending further consideration by the Board.

On December 27, 2007, the Company filed a current report on Form 8-K disclosing that it had entered into an Exchange and Settlement Agreement with the investors which invested approximately $17.0 million for shares of the Company’s common stock in a private offering completed on April 19, 2007. As part of that investment, the Company entered into a registration rights agreement under which the Company agreed to register the investors’ shares of common stock by no later than June 3, 2007 or to pay a penalty of 1% per month up to 10% until the registration statement was filed with the SEC. In addition, the Company agreed to an additional monthly penalty of 1% if the registration statement was not declared effective by August 20, 2007. The Company has not been able to meet its obligation to these investors to register their shares because the Company has not been current in its reporting obligations with the SEC. Under the registration rights agreement the Company has been accruing penalties every month, payable in cash, for its failure to register the shares. The Company has now filed its 2006 Annual Report on Form 10-K in December 2007 and engaged new accountants to assist it with its 2007 quarterly reports on Form 10-Q. The Company entered into

settlement agreement with the investors to resolve the matter without it having to pay any cash amounts and to obtain a release from further penalties.

Under the settlement, the Company agreed to exchange each share of common stock held by the investors for 1.125 shares of a new series of preferred stock. This new preferred stock by its terms will convert back into common stock in connection with a qualifying equity financing transaction of $10.0 million or more or, if the Company does not conduct such a financing, at the end of 18 months. The conversion will be at the sale price in the qualifying equity financing transaction (or the market price of the common stock, if conversion is after the 18 months) but not below a floor price of $2.00 per share. In return, the investors agreed to release the Company from its continuing non-compliance with the registration requirement and all accrued penalties, and have given the Company a general release from claims they may have against it arising out of the investment. The Company has agreed to take the necessary steps to register the investors’ shares once the Company becomes current in its SEC filings or in connection with registering shares issued in a qualifying equity financing transaction.

The Company and Nokia have reached a definitive agreement on the amount receivable (reported in the Company’s consolidated financial statements as Due from Disposal of Business as $3.4 million) for $1.8 million. As a result of this definitive agreement, the Company recognized a charge to Discontinued Operations of $1.5 million at March 31, 2007.

Item 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1934, which are made under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, these statements can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will,” and “would” or similar words. The statements that contain these words should be read carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position, or state other forward-looking information. These statements include, among others, our estimates of future revenues and our expectations that those revenues will fluctuate significantly, our belief that we have adequate cash, available borrowing capacity and short-term investments which will satisfy cash requirements for at least the next twelve months, and our ability to pursue and secure new business opportunities.

The factors listed under “Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, ~~2006~~2007, among others, could cause actual results to differ materially from those contained in forward-looking statements made in this report and presented elsewhere by management from time to time. Such factors, among others, may have a material adverse effect upon ~~our~~ our business, financial condition, and results of operations. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Accordingly, you are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made.

OVERVIEW

We are an independent provider of integrated end-to-end solutions for wireless voice and data communications networks with offerings ranging from high level technical consulting, system design and optimization services, toongoing ~~deployment~~operations inand ~~certain geographic~~maintenance ~~regions~~services and, ~~ongoing~~in ~~operations~~some ~~and~~countries, deployment ~~maintenance~~ services. We have been successful in using initial opportunities to provide high level technical consulting services to secure later-stage system design and network optimization contracts. Engagements to provide design services also enable us to secure ongoing operations and maintenance projects. Our technical consulting, system design and network optimization practices position us well to capitalize on additional opportunities as new technologies are developed and wireless service providers upgrade their existing networks, deploy the latest available technologies, and respond to changes in how customers use wireless services.

We provide these services through a regional organization, which comprises two principal regions and several smaller divisions. Our primary operating segments are Americas and EMEA (Europe, Middle East and Africa).

Americas:		Headquartered in McLean, Virginia, the Americas region provides a range of service offerings to wireless operators and equipment vendors in North America. During the nine months ended September 30, 2007, Americas generated approximately 23.6% of our total revenue.
EMEA:		Based in London, EMEA is responsible for operations in the U.K., Italy, the Netherlands, Algeria, Belgium, Luxembourg, Germany, Spain, Greece, Pakistan and Saudi Arabia. During the nine months ended September 30, 2007, EMEA generated approximately 76.4% of our total revenue.
Nonreportable segments:		This segment of our business includes the wind down of our operations in Asia Pacific, LCC Wireline, Inc. corporate and the Wireless Institute. These combined operations generated minimal revenues.

Americas: Headquartered in McLean, Virginia, the Americas region provides a range of service offerings to wireless operators, generating 28.9% of our total revenue.

~~Our~~EMEA: ~~primary~~Based ~~sources~~in ofthe ~~revenues are technical consulting~~Netherlands, ~~engineering~~ ~~design~~EMEA ~~and~~is ~~optimization~~responsible ~~and,~~for operations in ~~EMEA~~the Netherlands, ~~network~~Belgium, ~~deployment~~France, ~~services.~~Italy, ~~Revenues~~Spain, ~~from~~the ~~services~~U.K, ~~are~~Algeria, ~~derived~~Pakistan, ~~both from~~Saudi ~~fixed~~Arabia ~~price~~ and ~~time and materials contracts~~Turkey. WeDuring ~~recognize revenues from fixed price service contracts using~~ the ~~percentage-of-completion~~ ~~method~~three ~~based on the ratio of individual~~months ~~contract~~ended ~~costs~~March 31, ~~incurred~~2008, toEMEA ~~date~~generated onapproximately a71.1% ~~project~~of ~~compared~~our ~~with~~ total ~~estimated~~ ~~costs on~~revenue.

Nonreportable segments: This segment of our business includes the wind down of our operations in Asia Pacific, LCC Wireline, Inc., Corporate and the Wireless Institute. These combined operations 24generated minimal revenues.

Our primary sources of revenues are technical consulting, engineering design and optimization ~~completion~~and, in certain countries in EMEA, network deployment services. Revenues from services are derived both from fixed price and time and materials contracts. We recognize revenues from fixed price service contracts using the percentage-of-completion method based on the ratio of individual contract costs incurred to date on a project compared with total estimated costs on completion. Anticipated contract losses are recognized as they become known and estimable. We recognize revenues on time and materials contracts as the services are performed.

In EMEA, the Company generally receives purchase orders for individual cell sites based on agreed upon fixed prices for types of standard cell sites. Non-standard services related to a cell site are priced on a variable basis using either agreed upon rates per hour or a rate schedule for such non-standard services. Deployment of cell sites may take up to several months and revenues and costs are recognized on a percentage of completion basis based upon the Company’s engineering estimates.

Cost of revenues include direct compensation and benefits, living and travel expenses, payments to third-party subcontractors and consultants, equipment rentals, expendable computer software and equipment, and allocated, or directly attributed, facility and overhead costs identifiable to projects.

General and administrative expenses consist of compensation, benefits, office and occupancy, and other costs required for the finance, human resources, information systems, and executive office functions. Sales and marketing expenses consist of salaries, benefits, sales commissions, travel and other related expenses required to implement our marketing, sales and customer support plans.

We generate cash from fixed price contracts by billings associated with contract milestones, which are typically agreed upon with our customers at the time the contracts are negotiated. For our time and materials contracts, we usually bill our customers on a monthly basis as services are performed. On large network deployment contracts, which involve the design and construction of complex wireless networks, it is increasingly common for our customers to require fewer contract milestones than in previous years. This results in extending the periods during which we are obliged to fund our operating costs until a milestone can be billed to the customer. This increases the capital that we require to operate the business, and is evidenced by increases in unbilled receivables on our balance sheet. This is an integral part of our business and we are constantly striving to manage our working capital requirements.

Another statistic that we monitor is our contract backlog, which at September 30, 2007, comprised firm backlog of $68.9 million (2006 of $41.0 million) and implied backlog of $14.5 million (2006 of $19~~.0 million). We expect that our contract backlog will~~ vary from time to time as we deliver contract revenues and will be dependent on our ability to win new awards. We define firm backlog as the value of work-in-hand to be done with customers as of a specific date where the following conditions are met: (i) the price of the work to be done is fixed; (ii) the scope of the work to be done is fixed, both in definition and amount (for example, the number of sites has been determined); and (iii) there is a written contract, purchase order, agreement or other documentary evidence which represents a firm commitment by the client to pay us for the work to be performed. We define implied backlog as the estimated revenues from master service agreements and similar arrangements, which have met the first two conditions set forth above but for which we have not received a firm contractual commitment.

We Another ~~have~~statistic ~~entered~~that ~~into~~we amonitor ~~number~~is ofour ~~business~~contract ~~dispositions~~backlog, ~~acquisitions~~ ~~and investments, some of~~ which ~~have~~at ~~either generated~~March 31, ~~significant~~2008, ~~cash proceeds or created significant~~comprised ~~requirements~~firm ~~for~~backlog ~~cash and these transactions significantly affect the year-to-year comparability~~ of ~~our financial statements~~$52.6 million ~~During~~(2007 ~~the~~was ~~second quarter of 2006, we made the decision to sell our U~~$40.S.3 ~~Network~~million) ~~Deployment~~and ~~operations~~implied ~~for~~backlog ~~a total consideration~~ of $108.21 million. ~~The consideration included~~(2007 ~~approximately~~was $122.07 million). ofWe ~~cash~~expect ~~proceeds,~~that ~~with~~our ~~the remainder~~contract tobacklog bewill ~~paid~~vary ~~upon~~from ~~final~~time ~~settlement.~~to Intime ~~conjunction~~as ~~with the sale,~~ we ~~entered~~deliver contract ~~into~~revenues aand ~~loan~~win ~~agreement~~new ~~with a maximum amount outstanding of $4~~awards.~~2 million.~~ AtWe ~~June 30,~~define ~~2007,~~firm ~~this loan~~backlog ~~was~~as ~~repaid in full. In~~ the ~~third~~value ~~quarter~~ of ~~2006,~~work-in-hand weto ~~made~~be ~~the~~done ~~decision~~with tocustomers ~~sell~~as ~~our~~of ~~Brazilian~~a ~~Subsidiary.~~specific Wedate ~~agreed~~where ~~to assume~~ the ~~obligations~~following ~~for~~conditions ~~payroll~~are ~~related~~met: ~~taxes~~(i) the inprice ~~dispute and~~of ~~recorded~~the inwork ~~discontinued~~to ~~operations~~be adone ~~charge~~is ~~of $0.4 million,~~fixed; ~~representing~~ (ii) the ~~net~~scope ~~present value~~ of the ~~obligation~~ ~~related~~work to ~~the~~be ~~severance~~down ~~related~~is ~~payroll~~fixed, ~~taxes~~both ~~due~~in todefinition ~~the~~and ~~Brazilian~~amount ~~tax~~(for ~~authority. On December 29~~example, ~~2006, we completed~~ the ~~purchase~~number of ~~Detron~~sites ~~Belgium~~has NVbeen ~~(“Detron Belgium”~~determined),; ~~a provider of technical services to the telecommunications industry in Belgium~~ and ~~Luxembourg, for $1.9~~(iii) ~~million~~there ~~pursuant~~is to a ~~share~~written contract, purchase order, agreement. ~~On March 9,~~or ~~2007,~~other wedocumentary ~~purchased~~evidence ~~the~~which ~~equity~~represents ~~interests~~a offirm ~~Wireless~~commitment ~~Facilities,~~by ~~Inc.’s~~the ~~Europe,~~client ~~Middle~~to ~~East~~pay ~~and~~us ~~Africa (EMEA) business~~ for athe ~~cash~~work ~~purchase~~to ~~price~~be ~~of approximately $4~~performed.~~5 million~~ ~~including~~We ~~transaction~~define ~~related~~implied ~~costs.~~backlog Onas the ~~June 1,~~estimated ~~2007,~~revenues wefrom ~~acquired~~master ~~certain~~service ~~assets~~agreements and ~~liabilities~~similar ~~of Wireless Facilities~~arrangements, ~~Inc.’s~~which ~~U.S. wireless~~have ~~engineering services~~met ~~business for a purchase price of approximately $41.5 million (after adjustment for final agreement on~~ the ~~value~~first oftwo ~~net~~conditions ~~assets~~set ~~transferred).~~forth Weabove ~~expect~~but tofor ~~continue~~which towe ~~consider~~have ~~business dispositions,~~not ~~acquisitions~~received ~~and investments as~~ a ~~way~~firm ofcontractual ~~supporting our longer-term strategies~~commitment.

We have completed a number of business dispositions, acquisitions and investments, some of Onwhich ~~November~~have either generated significant cash proceeds or created significant requirements for cash and these transactions significantly affect the year-to-year comparability of our financial statements. During the second quarter of 2006, we made the decision to sell our U.S. Network Deployment operations for a total consideration of $10.2 12million. The consideration included approximately $1.0 million of cash proceeds. At December 31, 2007, we$1.8 million ~~received~~was ~~notice~~due ~~that~~from ~~the~~Nokia ~~buyers~~in ~~that~~connection ~~they~~with ~~have~~this ~~decided~~transaction ~~not~~and towas ~~proceed~~collected in March 2008. In conjunction with the sale, ~~acquisition~~we entered into a loan agreement with a maximum amount outstanding of ~~our~~$4.2 million. ~~Brazilian~~This ~~Subsidiary~~loan was repaid in full during 2007. In the third quarter of 2006, ~~LCCI~~we ~~Brazil~~made the decision to sell our Brazilian Subsidiary. We ~~are~~agreed ~~working~~to onassume ~~alternatives~~the ~~including~~obligations anfor payroll related taxes in dispute and ~~opportunity~~recorded in discontinued operations a charge of $0.4 million, representing the net present value of the obligation related to ~~sell~~the severance related payroll taxes due to ~~another~~the ~~interested~~Brazilian ~~party~~tax ~~under~~authority. On ~~similar~~December 29, 2006, we completed the purchase of Detron Belgium NV (“Detron Belgium”), a provider ~~terms~~of technical services to the telecommunications industry in Belgium and ~~conditions~~Luxembourg, for $1.9 million Onpursuant ~~October~~to 5a share purchase agreement. On March 9, 2007, ~~the~~we ~~Company~~purchased ~~entered~~certain equity ~~into~~interests of WFI’s EMEA business for a ~~non-binding~~purchase ~~letter~~price of ~~intent~~approximately to$4.4 million ~~sell~~including transaction ~~LCCI~~related ~~Brazil~~costs. ~~The~~On ~~Company~~June 1, ~~intends~~2007, towe ~~actively~~acquired ~~pursue~~certain assets and liabilities of WFI’s U.S. wireless engineering services business for a purchase price of approximately $43.4 million (after adjustment for final agreement on the value of net assets transferred). We expect to ~~sale~~continue to consider business dispositions, acquisitions and investments as a way of ~~LCCI~~supporting ~~Brazil~~our longer-term strategies.

On November 12, 2007, we received notice from the buyers that they have decided not to proceed with the acquisition of our Brazilian subsidiary, LCCI Brazil. We are working on alternatives including an opportunity to sell to another interested party under similar terms and conditions. On October 5, 2007, the Company entered into a non-binding letter of intent to sell LCCI Brazil. The Company intends to actively pursue the sale of LCCI Brazil.

RECENT DEVELOPMENTS

On April 4, 2008 the Company filed a current report on Form 8-K disclosing that, in accordance with NASDAQ’s rules, the Company received a NASDAQ staff determination letter stating that the ~~Bank~~Company was not in compliance with NASDAQ Marketplace Rule 4310(c) (14) because it had not timely ~~Refinancing~~filed with NASDAQ the 2007 Form 10-K. The Company requested and was granted a hearing before the NASDAQ Listing Qualifications Panel (the “Panel”). The Company subsequently filed the 2007 Form 10-K on April 29, 2008 and on May 1, 2008 the Company announced that it had received notice from NASDAQ that it is now compliant.

On ~~November~~May 3014, ~~2007,~~2008 wethe ~~further~~Company ~~amended~~filed ~~and~~a ~~restated~~current ~~our outstanding~~report ~~credit~~on ~~facility~~Form ~~with~~8-K ~~Bank~~disclosing that Mr. Dean Douglas submitted a notice of ~~America,~~resignation to ~~among~~the ~~other~~Board of Directors resigning his position as ~~things~~President, ~~provide~~Chief ~~for~~Executive aOfficer ~~bank~~and ~~waiver~~Director ~~and~~of ~~amend~~the ~~certain~~Company, ~~covenants~~effective ~~in the~~June 6, ~~agreement~~2008. ~~for~~The ~~all~~Company announced ~~events~~the promotion of ~~default~~Mr. Kenneth ~~The~~Young ~~amended~~to ~~agreement~~LCC President and Chief Operating Officer, ~~provides~~effective ~~for~~immediately. aMr. Young ~~total~~will ~~principal~~lead ~~borrowing~~the ~~amount~~organization ofon upa toworldwide basis and report ~~$21~~directly to Ms.95 ~~million~~Julie ~~which~~Dobson, ~~may~~Chairperson beof ~~borrowed,~~the ~~repaid~~Board. ~~and~~The ~~reborrowed by~~Board usintends onto initiate a ~~revolving~~CEO ~~basis~~search later ~~until~~this ~~November~~month. On the effective date of Mr. 29Douglas’ resignation, ~~2009~~Ms. Dobson Itwill ~~also~~assume the ~~provides~~post ~~for~~of interim CEO until a ~~term~~new CEO is announced.

On May 16, 2008 the Company filed a current report on Form 8-K disclosing that, in accordance with NASDAQ’s rules, the Company received a NASDAQ staff determination letter stating that the 25Company was not in compliance with NASDAQ Marketplace Rule 4310(c) (14) because it had not timely filed with NASDAQ the Form 10-Q for the quarter ended March 31, 2008. The Company requested and was granted a hearing before the NASDAQ Listing Qualifications Panel (the “Panel”).

~~loan~~ On ~~of $6.5~~May ~~million~~19, ~~with~~2008 ~~scheduled~~the ~~principal~~Company ~~payments~~filed ~~of $3.5 million~~a current report on ~~June 1,~~Form ~~2008,~~8-K $1disclosing that Dr.0 ~~million on~~Rajendra ~~each~~(Raj) ofSingh ~~September~~advised 1the ~~and~~Company ~~December 1,~~of ~~2008~~his ~~and~~decision ~~March 1, 2009~~not ~~and~~to ~~any~~stand ~~balance~~for onre-election ~~November 29,~~as ~~2009,~~a andirector ~~increase~~at in the Company’s ~~applicable~~2008 ~~interest~~annual ~~rate~~meeting, onwhich ~~borrowings~~has bynot ~~1.00%~~yet ~~per~~been ~~annum, the~~scheduled ~~amendment~~but ofwhich ~~the~~is ~~financial~~expected ~~covenants~~to ~~set~~be ~~forth in the~~held ~~agreement~~this ~~and~~summer. ~~the~~Dr. Singh ~~payment~~has toindicated ~~the~~his ~~bank~~intention ofto acontinue ~~fee~~to ofserve upas ~~to $0.6 million~~a indirector ~~connection~~until ~~with~~ the 2008 ~~amendment~~annual meeting.

On June 10, 2008 the Company filed a current report on Form 8-K ~~SEC~~disclosing ~~Filing~~that Mr. Peter A. Deliso submitted a notice of resignation ~~Delinquencies~~to ~~and~~Mr. ~~NASDAQ~~Dean Douglass resigning his position as Senior Vice President, ~~compliance~~New Ventures, General Counsel & Secretary effective June 30, 2008.

As is discussed below, we have been delinquent in complying with the periodic reporting requirements of the U.S. Securities and Exchange Commission (“SEC”) because we were unable to timely file our 2006 Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007. As a result of these reporting delinquencies we have not been in compliance with NASDAQ Marketplace Rule 4310(c)(14).

On March 29, 2007, the Company filed a current report on Form 8-K disclosing that the Company anticipated a delay in filing its annual report on Form 10-K for the year ended December 31, 2006 with the U.S. Securities and Exchange Commission. The Company was unable to file the 2006 Form 10-K by the prescribed date due to the need for additional time for the Company’s management to complete its assessment of the effectiveness of its internal controls over financial reporting and for its auditors to complete its required testing and review procedures with respect to such internal controls as of December 31, 2006 in accordance with Section 404 of the Sarbanes Oxley Act (SOX) of 2002 and to complete any other remaining items necessary for filing the Form 10-K.

On April 5, 2007 the Company filed a current report on Form 8-K disclosing that, in accordance with NASDAQ’s rules, on April 3, 2007, the Company received a NASDAQ staff determination letter stating that the Company was not in compliance with NASDAQ Marketplace Rule 4310(c)(14) because it had not timely filed with NASDAQ the 2006 Form 10-K. The Company requested and was granted a hearing before the NASDAQ Listing Qualifications Panel (the “Panel”). The Company attended a hearing before the Panel on May 17, 2007. The Company was granted an extension for continued listing on the NASDAQ Stock Market in a letter dated June 25, 2007 from the Panel. The Panel’s decision made continued listing subject to the Company filing the 2006 Form 10-K by August 14, 2007, and filing its Quarterly Report on Form 10-Q for the fiscal year ended March 31, 2007 by September 24, 2007. The Panel noted that the September 24 date represented the full extent of the Panel’s authority to grant an exception date for filing the March 31, 2007 Form 10-Q.

On August 13, 2007, the Company filed a current report on Form 8-K disclosing that NASDAQ Listing and Hearing Review Council (the “Listing Council”) decided to review the June 25, 2007 decision of the Panel regarding the Company. The Listing Council also determined to stay the Panel decision to suspend trading in the Company’s securities in the event the Company failed to file the 2006 Form 10-K by August 14, 2007 or failed to file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 by September 24, 2007. The Company also announced that it would not be in a position to file the 2006 Form 10-K or its Form 10-Q for the quarter ended June 30, 2007 by August 14, 2007 nor would it be in a position to file a Form 8-K/A with respect to its previously announced acquisition of the U.S. wireless engineering services business of WFI by the due date of August 15, 2007.

On August 20, 2007 the Company filed a current report on Form 8-K disclosing that the Company has received an additional NASDAQ staff determination letter stating that the Company was not in compliance with NASDAQ Marketplace Rule 4310(c)(14) because it had not timely filed its Quarterly Report on form 10-Q for the period ended June 30, 2007 with NASDAQ. On November 19, 2007, the Company filed a current report on Form 8-K disclosing that on November 13, 2007, the Company received an additional NASDAQ staff determination letter stating the Company was not in compliance with NASDAQ Marketplace Rule 4310(c)(14) because it had not timely filed its Quarterly Report on Form 10-Q for the period ended September 30, 2007.

On December 20, 2007, the Company announced that the Listing Council notified the Company on December 19, 2007 that the Listing Council had determined to exercise its discretionary authority, under Rule 4802(b), to grant the Company an exception to demonstrate compliance with all of the Global Market continued listing requirements until February 18, 2008 (the “Listing Council Decision”). In its decision, the Listing Council noted that its discretion is limited to the lesser of 60 days from the date of the Listing Council Decision or 180 days from the date of the decision of the Panel, which was September 25, 2007. Therefore, the maximum amount of time the Listing Council can grant the Company is until February 18, 2008. The Company was granted a final extension until February 18 2008, to comply with NASDAQ rules for continued listing on the NASDAQ stock market. However, on February 14, 2008, the Company received a letter advising it that the NASDAQ Board of Directors has decided to review the Council’s December 19, 2007 decision and stay delisting pending further consideration by the Board.

TRENDS THAT HAVE AFFECTED OR MAY AFFECT RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The major trends that have affected or may affect our business in the future are as follows:

• project related revenues derived from a limited set of customers in each market where we do business; • the acceleration or the delay associated with the introduction of new technologies and services by our customers; • the management and the services composition of our fixed price contracts; • ~~increased~~ spending levels by wireless service providers in the areas of network design, deployment and optimization; • migration of networks to accommodate enhanced data offerings; • consolidation in the carrier and OEM community; ~~and~~ • increased percentage of revenues derived from our international operations; and • recent auctions of spectrum by governments in the U.S. and certain countries in Europe.

Our business is characterized by a limited number of projects awarded by a limited number of customers. This can lead to volatility in our results as projects initially ramp up and then wind down. As projects are completed, we are faced with the task of replacing project revenues with new projects, either from the same customer or from new customers. In addition, the wireless industry is composed of a relatively small number of wireless service providers and equipment vendors, and this inevitably leads to issues of customer concentration. Consequently, our business may be affected in any single market by the changing priorities of a small group of customers.

Historically, the key drivers of change in our business have been: (i) the issuance of new or additional licenses to wireless service providers; (ii) the introduction of new services or technologies; (iii) the increases in the number of subscribers served by wireless service providers, the increase in usage by those subscribers and the scarcity of wireless spectrum; and (iv) the increasing complexity of wireless systems in operation.

We tend to benefit from projects undertaken by our customers to introduce new technologies and services in their networks and we tend to suffer when projects are delayed. Revenues from 3G networks constituted approximately 4552.24% and 41.91% of our total revenues for the three ~~and nine~~ months ended ~~September~~ March 3031, 2008 and 2007, respectively, and it is expected to be an area of business growth in the future. A large proportion of the contracts awarded by our customers are fixed price, and we expect ~~this~~ this trend to continue. A recent trend ~~has~~is ~~been~~ for the award of fixed price contracts to cover the design and deployment of a certain geographic network area on a full turnkey basis, ~~including~~ including planning, engineering design, site acquisition, construction and deployment services.

We believe that the Americas may benefit from increased spending by certain United States wireless service providers. This increased spending can be attributed to several trends: (i) the implementation of new technologies such as 3G wireless and broadband wireless; (ii) activity generated by efforts to consolidate networks resulting from merger activity; (iii) network quality enhancement programs to reduce churn; (iv) network expansion and capacity programs geared toward enabling new and enhanced services; and (v) other miscellaneous network upgrades and enhancements required for market share maintenance and competitive reasons.

We have also observed an increase in spending on wireless networks in developing countries. However, the increase in worldwide terrorism may affect our business in these countries. For 27example, the U.S. State Department has issued security advisories for U.S. nationals in Saudi Arabia, Algeria and certain other countries in the Middle East. While we tend to staff these projects largely with local or regional personnel, we do recognize that undertaking work in such areas at this time carries a higher level of operating and political risk than in other more developed areas.

We have also observed an increase in spending on wireless networks in developing countries. However, the increase in worldwide terrorism may adversely affect our business in these countries. For example, the U.S. State Department has issued security advisories for U.S. nationals in Saudi Arabia, Algeria and certain other countries in the Middle East. While we tend to staff these projects largely with local or regional personnel, we do recognize that undertaking work in such areas at this time carries a higher level of operating and political risk than in other more developed areas.

RESULTS OF OPERATIONS

The discussion below provides information which management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The discussion should be read in conjunction with the consolidated financial statements and accompanying notes thereto included elsewhere herein.

Revenues, Cost of Revenues and Gross Margins

	Three Months Ended September 30,												Nine Months Ended September 30,
	Three Months Ended						Three Months Ended
	2007						2006						2007						2006
	March 31, 2008						March 31, 2007
	(in thousands)			~~(% of revenue)~~			~~(in thousands)~~			~~(% of revenue)~~			~~(in thousands)~~			~~(% of revenue)~~			~~(in thousands)~~			~~(% of revenue)~~
Revenues:
Americas	$	1612,~~442~~123			~~39.3~~	%	$	74,~~117~~173					$	~~29,253~~			~~30.4~~	%	$	~~24,524~~
EMEA		2529,~~392~~811			~~60.7~~	%		2420,~~816~~467						~~66,938~~			~~69.6~~	%		~~77,149~~
Nonreportable segments		—						—						—						—
		41,834						31,933						96,191						101,673
		41,934						24,640
Cost of revenues:				(% of revenue)						(% of revenue)
Americas		148,~~221~~623			8671.51	%		54,~~653~~513			79108.41	%		~~26,352~~			~~90.1~~	%		~~19,338~~			~~78.9~~	%
EMEA		2123,~~322~~332			8478.03	%		1716,~~104~~446			6880.94	%		~~54,485~~			~~81.4~~	%		~~55,544~~			~~72.0~~	%
Nonreportable segments		0(26	)		—			(8620	)		—			~~(12~~	)		—			~~(86~~	)		—
		35,543			85.0	%		22,671			71.0	%		80,825			84.0	%		74,796			73.6	%
		31,981			76.3	%		20,939			85.0	%
Gross margins:
Americas		23,~~221~~500			1328.59	%		~~1,464~~(340	)		20(8.61	)%		~~2,901~~			~~9.9~~	%		~~5,186~~			~~21.1~~	%
EMEA		46,~~070~~479			1621.07	%		74,~~712~~021			3119.16	%		~~12,453~~			~~18.6~~	%		~~21,605~~			~~28.0~~	%
Nonreportable segments		—(26	)		—			8620			—			12			—			86			—
	$	69,~~291~~953			1523.07	%	$	93,~~262~~701			2915.0	%	$	~~15,366~~			~~16.0~~	%	$	~~26,877~~			~~26.4~~	%

Americas

~~For~~ Revenues ~~the quarter ended September 30, 2007, revenues~~ in the Americas region increased to $1612.~~4 million for the quarter as compared to $7.~~1 million ~~during the corresponding period~~ in ~~2006. Gross margin for~~ the ~~Americas~~first ~~region decreased year over year and was 13.5% for the~~ quarter ended September 30, 2007, as compared to 20.6% for the comparable quarter in 2006. Gross margin increased quarter over quarter and increased by almost 2% to 13.5% for the quarter ended September 30, 2007, as compared to 11.8% for the second quarter of ~~2007.~~2008 ~~The increase in revenue of~~from $94.32 million in the ~~third~~first quarter of 2007. asThis ~~compared~~increase ~~to the corresponding period in 2006~~ was ~~almost~~primarily ~~entirely~~ due to the ~~increase~~ ~~in revenue attributable to our~~ acquisition of the ~~WFI~~ USWFI ~~Engineering business on May 29, 2007~~U.S. ~~The~~engineering ~~decrease~~business in ~~gross~~ ~~margin of 7.1% for the quarter ended September 30,~~ June 2007 ~~as compared~~and towinning ~~the~~several ~~comparable~~new ~~quarter in 2006, was the result of the following factors~~contracts. The ~~most significant factor was that the WFI US Engineering business had an overall lower~~ gross margin ~~than~~ for the ~~stand~~Americas ~~alone~~increased ~~LCC~~to ~~engineering business~~28.9% ~~Additionally, during~~from ~~much~~(8.1)% ofin the ~~third~~first quarter of 2007, ~~the~~primarily ~~WFI~~as USa ~~Engineering businesses~~result ~~workforce was being integrated and rationalized into our existing workforce. This had the impact~~ of ~~having more of~~ the increased revenue, ~~generating~~new ~~workforce~~higher ~~being~~margin ~~idle~~contracts, orcost ~~underutilized during~~cutting ~~the~~actions ~~third~~and ~~quarter~~improved ~~of 2007 as compared to the comparable~~utilization ~~period in 2006. Thus we incurred costs~~ of ~~maintaining~~our ~~that portion~~revenue ~~of the idle or underutilized workforce “bench costs” without~~ generating ~~sufficient revenues to offset such costs~~workforce.

21 28

For the nine months ended September 30, 2007, revenues in the Americas region increased to $29.3 million as compared to $24.5 million for the nine months ended September 30, 2006. This increase was primarily due to the transition and integration of the workforce and selected assets and liabilities of WFI during the period. Gross margin for the Americas region for the nine months ended September 30, 2007 was 9.9%, as compared to 21.1% for the nine months ended September 30, 2006. This is primarily due to the continued low margins from the WFI US engineering business and the bench costs experienced during the integration of that business.

EMEA

For the first quarter ~~ended~~of ~~September 30~~2008, ~~2007,~~ revenues increased by $09.63 million to $2529.48 million from $2420.8 5 million in the corresponding period in ~~2006~~2007. The primary reasons for this ~~increase~~change were ~~increased revenues~~the ~~attributable~~acquisition toof ~~our~~the ~~engineering~~WFI ~~services~~EMEA ~~contract~~engineering business in ~~Saudi Arabia~~March 2007 and ~~increased~~increases in revenues ~~attributable to the entities doing~~generated ~~business~~by inour ~~Europe~~Netherlands, ~~that~~Pakistan weand ~~acquired~~Saudi ~~from WFI in the first quarter of fiscal 2007~~operations, partially offset by ~~the continued~~decreases ~~slowdown~~ in revenues generated ~~from~~by our ~~deployment and consulting contracts in~~ Algeria and ~~the~~ U.K. operations. Gross margin for the EMEA region for the quarter ended ~~September~~March 3031, ~~2007~~ 2008 was 1621.07%, asin the first quarter of 2008 compared to 3119.16% ~~for~~in the ~~three months ended~~corresponding ~~September 30,~~period ~~2006~~in 2007. ~~This~~The ~~decrease~~increase ~~was~~in ~~due~~gross ~~primarily~~margins tofor the ~~reduction~~ infirst ~~higher~~quarter ~~margin~~of ~~services~~fiscal ~~provided~~2008 as compared to the corresponding period in ~~Algeria~~2007 ~~and~~were primarily the ~~continued~~ ~~occurrence~~result of ~~certain~~improved ~~relatively~~margins ~~fixed~~in ~~costs~~our in Algeria and Pakistan ~~the~~operations ~~UK,~~as ~~without~~a ~~sufficient~~result ~~revenue to reach the level~~ of ~~gross~~cost ~~margin~~cutting ~~achieved~~actions in ~~the~~those countries ~~2006~~and ~~period~~the U.K.

For the nine months ended September 30, 2007, revenues decreased $10.2 million to $66.9 million from $77.1 million in the corresponding period in 2006. Gross margin for the EMEA region for the nine months ended September 30, 2007 was 18.6%, as compared to 28.0% for the nine months ended September 30, 2006. Sales and gross margin generated by services provided under our deployment and our consulting contracts in Algeria were significantly reduced during the three and nine months ended September 30, 2007 as compared to the corresponding periods in 2006. This was a result of our Algeria customer delaying capital expenditures and the final rollout of the remaining sites to be deployed. Additionally, during the third quarter of 2007, we experienced a severe slowdown in deployment activity carried out for two customers in the U.K. This slowdown decreased our U.K. revenues and gross margins during the third quarter of 2007 as compared to the corresponding period in 2006. These decreases were partially offset by the increase in the amount of optimization work carried out by us on our engineering services contract in Saudi Arabia.

Nonreportable segments

There were no revenues from the non-reportable segments in the three months ended ~~September~~March 3031, 2008 and 2007.

Operating Expenses ~~Expense~~

	Three Months Ended				Nine Months Ended
	Three Months Ended March 31,
	September 30,				September 30,
	2008		2007
	2007		2006		2007		2006
	(in thousands)
	(in thousands)				(in thousands)
Sales and marketing:
Sales and marketing:
Americas	$	715	$	633
Americas	$	1,083		553		2,599		1,752
EMEA		2,417		1,432
EMEA		2,276		702		5,813		3,120
Nonreportable segments		787		842
Nonreportable segments		540		380		2,041		453
		3,919		2,907
		3,899		1,635		10,453		5,325
General and administrative:
General and administrative:
Americas		1,043		857
Americas		1,263		940		3,314		2,879
EMEA		2,598		2,865
EMEA		2,337		2,593		7,948		7,764
Nonreportable segments		3,587		2,618
Nonreportable segments		2,764		2,549		7,572		7,902
		7,228		6,340
		6,364		6,082		18,834		18,545
Restructuring charge:
Americas		374		—
EMEA		52		—
Nonreportable segments		—		—
		426		—
Depreciation and amortization:
Americas		577		75
EMEA		601		477
Nonreportable segments		64		71
		1,242		623
Total:
Americas		2,709		1,565
EMEA		5,668		4,774
Nonreportable segments		4,438		3,531
Total	$	12,815	$	9,870

The increase in sales and marketing expenses from $2.9 million in the first quarter of 2007 to $3.9 million in the first quarter of 2008 is due primarily to costs incurred due to increased sales 29headcount and increased sales as a result of the acquisition of the WFI U.S. Engineering business in June 2007 and the WFI EMEA business acquired in March 2007 and increased commission expense in the EMEA region as a result of higher revenues relating to our Saudi contract.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2007		2006		2007			2006
	(in thousands)				(in thousands)
Restructuring charge (recovery):
Americas		—		—		—			—
EMEA		303		—		1,859			31
Nonreportable segments		—		—		(493	)		77
		303		—		1,366			108
Depreciation and amortization:
Americas		233		143		426			439
EMEA		615		441		1,779			1,353
Nonreportable segments		69		89		206			241
		917		673		2,411			2,033
Total Americas:		2,578		1,636		6,339			5,070
EMEA		5,532		3,736		17,398			12,268
Nonreportable segments		3,373		3,018		9,326			8,673
Total	$	11,483	$	8,390	$	33,063		$	26,011

General and administrative expense increased $0.9 million to $7.2 million for the three months ended March 31, 2008 from $6.3 million in the comparable period of 2007. This change was primarily attributable to a $0.2 million increase in the Americas segment as a result of the acquisition of the WFI U.S. Engineering business in June 2007 and a $1.0 million increase in the Nonreportable segments due to higher outside services, offset by a $0.3 million decrease in expense attributable to the EMEA segment as a result of our ongoing consolidation of back office operations of certain of our smaller operations in EMEA and the phased in reduction and closure of our EMEA headquarters in the U.K. which will be completed in the second quarter of 2008.

~~The~~ In ~~increase in sales and marketing expense to $3.9 million in~~ the first quarter ~~ended~~of ~~September 30~~2008, ~~2007 from $1.6 million in~~ the ~~corresponding~~Company ~~period~~adopted ina ~~2006~~restructuring ~~was primarily~~plan ~~due~~(“2008 ~~to increased sales headcount~~ Restructuring”), and ~~increased~~recorded ~~sales efforts as~~ a ~~result~~restructuring ofcharge ~~the acquisition~~ of ~~the WFI US~~$0.4 ~~Engineering~~million ~~business~~for onexcess ~~May 29,~~office ~~2007~~space, ~~and~~primarily in the ~~WFI EMEA business acquired on March 9~~U.S., ~~2007, partially offset~~ bythat ~~reduced~~it ~~commission~~has ~~expense~~elected innot ~~the~~to ~~EMEA~~occupy ~~region~~and asis aattempting ~~result of lower revenues relating~~ to ~~our Algeria, UK and Saudi contracts~~sublet.

~~General~~ Depreciation and ~~administrative~~amortization expense increased ~~from~~ $60.1 6 million to $61.4 2 million ~~primarily~~for asthe athree months ~~result~~ended ofMarch 31, ~~our~~2008 ~~acquisition~~from of$0.6 million in the ~~WFI US~~comparable ~~and~~period ~~EMEA~~of ~~Engineering businesses in~~ 2007. ~~The~~This ~~relatively~~change ~~small~~was ~~size~~primarily ofattributable ~~the~~to ~~increase~~additional isdepreciation ~~primarily~~and ~~due~~amortization toexpense ~~our efforts~~related to ~~increase~~ the acquisition ~~efficiency~~ of ~~our~~property ~~administrative operations~~ and ~~support~~equipment ~~functions in the Americas~~ and ~~the~~purchased ~~ongoing consolidation~~intangible ofassets ~~back office operations~~ of ~~certain~~the ofWFI ~~our smaller operations in~~ EMEA, ~~as well as the fact that we had sufficient resources~~ and ~~systems to absorb these acquisitions~~U.S. ~~without~~Engineering abusinesses ~~significant increase~~ in ~~our~~March ~~general~~ and ~~administrative organization~~June 2007, respectively.

22 The increase in sales and marketing expense for the nine months ended September 30, 2007 to $10.5 million from $5.3 million in the comparable corresponding period in 2006 is due primarily to increased sales headcount and increased sales efforts as a result of the above mentioned acquisitions, as well as the increase in our sales force during the third quarter of 2007 as compared to the sales force that was in place in the Americas during the comparable period in 2006, The increase in general and administrative expenses to $18.8 million for the nine months ended September 30, 2007 from $18.5 million for the nine months ended September 30, 2006 is largely attributable to the increased efficiency of our administrative operations and support functions in the Americas and the ongoing consolidation of back office operations of certain of our smaller operations in EMEA, as described above.

Other Income and Expense

	Three Months Ended						Nine Months Ended
	Three Months Ended March 31,
	September 30,						September 30,
	2008			2007
	2007			2006			2007			2006
Interest income:
	(in thousands)						(in thousands)
Americas	$	—		$	—
Interest income:
EMEA		4			12
Americas	$	1		$	—		$	1		$	1
Nonreportable segments		—			43
EMEA		8			5			32			30
		4			55
Nonreportable segments		—			2			42			15
Interest expense:
		9			7			75			46
Americas		(772	)		—
Interest expense:
EMEA		(51	)		(5	)
Americas		(640	)		—			(811	)		—
Nonreportable segments		(604	)		(203	)
EMEA		(43	)		(26	)		(86	)		(26	)
		(1,427	)		(208	)
Nonreportable segments		(575	)		(145	)		(1,102	)		(550	)
Other:
		(1,258	)		(171	)		(1,999	)		(576	)
Americas		6			36
Other income (expense):
EMEA		(1,918	)		(524	)
Americas		12			—			46			—
Nonreportable segments		474			223
EMEA		(1,187	)		667			(1,559	)		537
		(1,438	)		(265	)
Nonreportable segments		(584	)		267			(394	)		702
Total:
		(1,759	)		934			(1,907	)		1,239
Americas		(766	)		36
Total:
EMEA		(1,965	)		(517	)
Americas		(627	)		—			(764	)		1
Nonreportable segments		(130	)		63
EMEA		(1,222	)		646			(1,613	)		541
Total	$	(2,861	)	$	(418	)
Nonreportable segments		(1,160	)		124			(1,454	)		167
Total	$	(3,009	)	$	770		$	(3,831	)	$	709

In Interest ~~the third quarter of 2007 interest~~ expense ~~increased~~was to $1.34 million ~~from~~for ~~$0.2 million in~~ the ~~corresponding period~~first inquarter ~~2006, and was primarily due to increased borrowings as a result~~ of ~~our~~2008 ~~recent~~and ~~acquisitions. In the third quarter of 2007, other increased to~~ $~~1.8 million compared to $~~0.92 million offor ~~other income in~~ the ~~corresponding~~comparable period in ~~2006.~~2007 ~~This change was primarily~~ due to ~~the Company~~increased ~~incurring~~borrowings ~~losses on foreign currency translation in 2007~~ as ~~compared~~a toresult ~~gains~~of ~~in 2006 due to~~ the ~~strengthening~~acquisition of the ~~British~~ ~~Pound and the Euro versus other currencies. Similarly~~WFI ~~in the nine months ended September 30, 2007, the Company had $1~~U.~~9 million of other expense as compared to $1~~S.~~2 million~~ ofEngineering ~~other~~business ~~income~~ in ~~the corresponding period in 2006. This change is also the result of fluctuations in foreign exchange rates as noted above. Additionally, in the three months and nine months ended September~~June ~~30,~~ 2007, ~~we recorded a charge of $0.9 million~~ and ~~$1.0 million, respectively, related to liquidated damages as a result of our inability to file a registration statement and obtain effectiveness as required under~~ the ~~terms~~WFI ofEMEA inbusiness ~~connection~~acquired ~~with our sale of common stock~~ in ~~April~~ March 2007. ~~There was no such charge in the corresponding~~ ~~periods in 2006.~~

In the first quarter of 2008, other income (expense) increased $1.2 million over the comparable period in 2007, primarily due to losses on foreign currencies of $1.4 million due to the appreciation of the Euro with respect to the U.S. Dollar and the British Pound throughout the period.

Tax Expense

A tax ~~benefit~~expense of $0.61 million was recognized in the ~~third~~ first quarter of ~~2007~~2008 as compared to $10.5 6 million ~~tax expense~~ in the ~~third~~ first quarter of ~~2006. A tax expense of $0.4 million was recognized during the nine months ended September~~ 2007 ~~as compared to $3~~.~~4 million~~ ~~for the comparable period in 2006.~~ The tax expense arises from ~~international~~an ~~operations~~increase ~~that generate~~in ~~taxable~~a ~~income.~~deferred ~~The decrease in~~ tax ~~expense~~liability ~~for~~attributable ~~the third quarter of 2007 and for the nine months ended September 30, 2007 was due primarily~~ to the ~~reduction~~amortization of ~~taxable~~ ~~income~~an ~~generated~~indefinite inlived ~~our Algerian operations the recognition~~intangible ofthat adoes ~~tax~~not ~~benefit~~provide ~~due~~positive toevidence ~~losses~~for ~~incurred~~the asrealization ~~a result~~ of ~~the~~deferred ~~reduction~~tax ~~in activity in Algeria and the UK~~assets. A valuation allowance has been established for tax benefits associated with losses in the U.S. and certain foreign ~~operations~~jurisdictions with the exception of the U.K. No tax benefit is recognized for these losses because we do not have sufficient history of taxable income in these jurisdictions to conclude that it is more likely than not that tax benefits associated with net operating loss ~~carryforwards~~carry forwards will be realized. However, we have recognized a tax benefit attributable to the UK operating loss in the current period because there is sufficient positive evidence to support the realization of this deferred tax asset.

23 31

Liquidity and Capital Resources

The following discussion relates to our sources and uses of cash and cash requirements during the ~~nine~~three months ended ~~September~~ March 3031, ~~2007~~2008 and ~~2006~~2007.

Sources and Uses of Cash

	Nine Months Ended
	Three Months Ended March 31,
	September 30, 2007			September 30, 2006
	2008			2007
	(in thousands)
Net cash used in operating activities	$	(181,~~425~~907	)	$	(112,~~050~~919	)
Net cash (used in) provided by investing activities		(27,948	)		11
Net cash used in investing activities		(938	)		(5,418	)
Net cash provided by financing activities		44,917			2,760
Net cash provided by (used in) financing activities		(1,411	)		5,610
Effect of exchange rates on cash and equivalents		~~470~~288			~~314~~29
Net decrease in cash and cash equivalents	$	(~~986~~3,968	)	$	(72,~~965~~698	)

During the ~~nine~~three months ended ~~September~~March 3031, ~~2007~~2008, the Company’s balance of cash and cash equivalents decreased by $14.0 million. This decrease in cash and cash equivalents was primarily the result of our use of cash of $271.9 million in ~~investing~~ operating activities, ~~primarily related to our acquisitions during the period and~~ $181.4 million used in ~~operating~~ financing activities asand ~~a result of our operating losses, offset by~~ $440.9 million ~~generated~~used byin ~~financing~~investing activities~~, reflected~~. inThe aprincipal ~~net~~financing ~~increase~~activities ~~in debt of $28.7 million to~~were ~~fund~~payments ~~our~~on ~~acquisitions, net proceeds from~~ the ~~sale~~lines of ~~additional~~ ~~common~~credit ~~stock~~and ~~during~~ the ~~nine~~notes ~~months~~payable ~~ended September 30, 2007~~ of $151.84 million and ~~$0.5 million~~ ~~from~~ the ~~effect~~principal ~~of foreign exchange rate~~investing ~~changes on cash and cash equivalents. Cash used in operating~~ activities ~~for~~were ~~the~~purchases ~~nine~~of ~~months~~property ~~ended~~and ~~September 30,~~equipment ~~2006 was $11.1 million, offset by cash provided by financing activities for the nine months ended September 30, 2006~~ of ~~$2.8 million,~~ ~~and~~ $0.37 million ~~from the effect of foreign exchange rate changes on cash and cash equivalents~~.

~~The~~ During ~~principal~~the ~~investing~~three ~~activities~~months ~~were~~ended ~~the~~March 31, ~~acquisition~~2007, inthe ~~March~~Company’s ~~2007~~balance of ~~the~~cash ~~equity~~and ~~interests~~cash equivalents indecreased ~~the~~by ~~Europe,~~$2.7 million. ~~Middle~~This ~~East~~decrease in cash and ~~Africa~~cash equivalents was primarily the ~~business~~result of ~~WFI~~our use of cash of $5.4 million in investing activities and ~~the~~$2.9 million ~~acquisition~~used in operating ~~June~~activities, ~~2007~~offset ofby ~~certain~~$5.6 million ~~assets~~net ~~and~~cash ~~liabilities~~provided by financing activities. The principal investing activities were the acquisition of the ~~U.S.~~Europe, ~~wireless~~Middle ~~engineering~~East ~~services~~and Africa business of WFI using ~~for~~net ancash ~~aggregate~~of $4.1 million and purchases of property and equipment of $451.73 million.

The principal requirements for cash during the ~~nine~~first ~~months~~quarter ~~ended September 30,~~of ~~2007~~2008 were as follows: (1) to ~~finance~~ ~~our recent acquisitions; (2) to~~ finance ~~the operating losses of the EMEA and the Americas business and~~ our corporate costs; (32) working capital needs of the business; and (43) to provide for the general working capital needs of the non-network deployment services we provide where customer payment cycles run up to 60 days and, in some cases, longer, but for which cash outflows are primarily for payroll related costs most of which are paid two times per month. Additionally, while we have made agreements with certain larger customers in EMEA, primarily in Algeria, to shorten customer payment terms to 120 days from 180 days, customer payment cycles continue to remain longer than the related cash outflow cycle in certain of our EMEA operations. During the ~~nine~~three months ended ~~September~~March 3031, ~~2007~~ 2008, we used $30.87 million of cash for purchases of property, plant and equipment that is used primarily for revenue generating purposes.

We have met our cash needs during the period by accelerating the collection of ~~our~~ receivables~~, primarily in our Americas~~ ~~segment, and~~ from ~~funds~~certain ~~from external sources through the issuance~~ of ~~common stock and debt as described below. We accelerated the collection of~~ our ~~receivables from certain of our~~ customers ~~in the Americas~~ by integrating with the ~~customers~~ customer’s automated payment processes and by ~~retaining~~ retaining more experienced and better trained collection personnel, as well as reinstituting requirements for our sales personnel to be actively engaged assisting in customer collections. On April 19, 2007, we raised $17.0 million through the sale of 5,100,000 newly issued Class A common shares at a price of $3.35 per share in a private placement. We used the proceeds from the offering primarily for general corporate purposes.

On March 9, 2007, we entered into a revolving credit facility with Bank of America, N.A., (“Bank of America”) and terminated our ~~then~~ existing credit facility with Commerce Funding Corporation. Under the terms of this credit facility, the aggregate amount owed to Bank of America by us at any time could not exceed $6.5 million. The term of this credit facility was through September 15, 2007. On May 29, 2007, in connection with the agreement to purchase certain assets and ~~liabilities~~ liabilities of the U.S. wireless engineering services business of WFI, we amended and restated our outstanding credit facility with Bank of America. The Amended and Restated Credit Agreement, was further amended on November 30, 2007 regarding its revolving loans, to among other things, provide for a bank waiver and amend certain covenants in the agreement for events of default. The facility now provides for revolving loans of up to $21.95 million which amounts may be borrowed, repaid and re-borrowed by the Company on a revolving basis until November 29, 2009. It also provides for a term loan of $6.5 million with scheduled principal payments of $3.5 million on June 1, 2008, $1.0 million on each of September 1 and December 1, 2008 and March 1, 2009 with any balance payable on November 29, 2009. The amendment also increased the applicable interest rate on borrowings by 1.00% per annum, amended of the financial covenants set forth in the agreement and required the payment to the bank of a fee of up to $0.6 million in connection with the amendment. As of March 31, 2008, $-0- was available to be borrowed under this credit facility.

Interest under the credit facility is generally payable by the Company on a quarterly basis. Borrowings bear interest, at the Company’s option, at an annual rate equal to either: a specified 32“base rate,” plus an additional margin of 2.50% or 3.00%; or a specified London Inter-Bank Offered Rate, or LIBOR, plus an additional margin of 3.50% or 4.00%. The additional margin of a loan for each fiscal quarter will be based upon the Company’s consolidated leverage ratio for the previous fiscal quarter. The interest rate as of March 31, 2008 and December 31, 2007 is 12.1% and 13.3%, respectively.

~~was~~ As ~~further~~ amended ~~on November 30~~, ~~2007~~the ~~to,~~credit ~~among other~~facility ~~things,~~contains ~~provide~~customary ~~for~~affirmative ~~a bank waiver~~ and ~~amend~~negative ~~certain~~ covenants ~~in the agreement for all events of default. The~~that ~~facility~~apply ~~now provides revolving loans of up~~ to ~~$21.95 million,~~ ~~which amounts may be borrowed, repaid and re-borrowed by~~ the Company onand aall ~~revolving~~of ~~basis~~its ~~until November 29~~subsidiaries, ~~2009.~~including Itrestrictions ~~also provides for a term loan of $6.5 million with scheduled principal payments of $3.5 million~~ on ~~June~~indebtedness, 1liens, ~~2008~~investments, ~~$1.0~~dispositions ~~million on each of September 1~~ and ~~December 1, 2008 and March 1, 2009, with any remaining balance payable on November 29, 2009~~dividends. The ~~amendment~~Company ~~increased the applicable interest rate on borrowings by 1.00% per annum, amended of the financial covenants~~ and ~~required~~ ~~the~~all ~~payment to the bank~~ of aits ~~fee~~subsidiaries ofalso upare ~~to $0.6 million. In addition, the Company is~~ required to maintain a ~~so-called “lockbox arrangement” pursuant to which all monies payable to the Company in the U.S. plus~~ certain ~~unrestricted~~ ~~cash~~financial ~~balances~~covenants, ofincluding ~~the Company’s non-U.S. subsidiaries in excess of $6.0 million must be paid into~~ a ~~specially designated~~minimum ~~account~~consolidated ~~and~~EBITDA ~~automatically~~that ~~applied to the payment of~~increases ~~amounts~~over ~~outstanding~~time, ~~under~~a ~~the~~consolidated ~~revolving~~leverage ~~portion~~ratio ofthat ~~the~~decreases ~~credit facility~~over astime ~~well~~and, ascommencing ~~any~~with ~~other obligations under the credit facility~~calendar ~~that~~quarter ~~are~~ending ~~due and owing. On June~~September 130, ~~2007~~2008, ~~we issued~~ a ~~promissory~~ ~~note~~consolidated tofixed ~~WFI~~charge incoverage ~~the~~ratio ~~amount~~ of ~~$21.6 million~~not ~~in connection~~less ~~with~~than ~~the purchase~~0. ~~This promissory note is~~70 ~~subordinated~~ to ~~our obligations under the amended and restated credit facility discussed above. On July~~ 1~~, 2007, WFI entered into an assignment agreement with SPCP Group L~~.L0.C. ~~whereby the rights, title and interest in the promissory note were transferred to SPCP Group L.L.C.~~

As The aAmended ~~result~~and ofRestated ~~the~~Credit ~~sale~~Agreement contains customary events of ~~the~~default, ~~U.S. Network~~including ~~Deployment~~for ~~Business~~payment ~~in 2006~~defaults, ~~the~~breaches ~~restructuring~~of ~~activities~~representations, ~~implemented during~~breaches ~~the~~of ~~second~~affirmative ~~quarter~~or ofnegative ~~2007~~covenants, ~~our~~cross defaults ~~continuing~~to ~~focus~~other ~~on streamlining~~material ~~and~~indebtedness, ~~consolidating~~bankruptcy, inand ~~all~~failure ~~areas~~to ofdischarge ~~our~~certain ~~operations,~~judgments. If ~~especially~~an ~~those~~event ~~related~~of todefault ~~general~~occurs and ~~administrative~~is ~~and corporate~~not ~~functions,~~cured ~~and~~within ~~the~~any ~~increased~~applicable ~~revenue~~grace weperiod ~~expect~~or inis ~~the~~not waived, ~~Americas~~the ~~segment~~administrative asagent, aon ~~result~~behalf of the ~~WFI~~lenders, USwould ~~acquisition~~have inthe ~~May 2007,~~right weto ~~expect~~accelerate ~~our~~the indebtedness ~~cash~~under ~~flow~~the toagreement ~~improve~~and ~~during~~exercise ~~the~~remedies ~~remainder~~against ~~of 2007~~the ~~and~~collateral ~~into~~securing ~~2008~~the credit facility.

24 Due to the more favorable payment terms we have negotiated with certain customers in EMEA, and the automation and integration of certain processes into those of certain of our larger customers, we expect to continue to speed up the cash to cash cycle.

In addition, the Company is required to maintain a so-called “lockbox arrangement” pursuant to ~~Based~~which onall ~~our~~monies ~~analysis~~payable ofto the Company in the U.S. plus certain unrestricted cash ~~flows~~balances of the Company’s ~~business~~non-U.S. subsidiaries in excess of $6.0 million must be paid into a specially designated account and automatically applied to the payment of amounts outstanding under the revolving portion ~~financing~~of the credit facility as well as any other obligations under the credit facility that are due and owing. On June 1, 2007, we ~~have~~issued a promissory note to WFI in ~~place,~~the amount of $21.6 million in connection with the ~~Company~~purchase. ~~believes~~The itpromissory ~~has~~note was subsequently increased to $23.9 million as a ~~sufficient~~result ~~cash~~of ~~flows~~a purchase price adjustment agreed to by the Company and ~~borrowing~~WFI. ~~capacity~~This promissory note is subordinated to ~~meet~~our ~~its~~obligations under the amended and restated credit facility discussed above. On ~~operating~~July 1, ~~needs~~2007, ~~for~~WFI entered into an assignment agreement with SPCP Group L.L.C. (“SPCP”) whereby the rights, ~~next~~title ~~twelve~~and ~~months~~interest in the promissory note were transferred to SPCP. The Company does not believe its loan agreements contain any subjective acceleration clauses.

As a result of the sale of the U.S. Network Deployment Business in 2006, the restructuring activities implemented during the second quarter of 2007 and first quarter of 2008, our continuing focus on streamlining and consolidating in all areas of our operations, especially those related to general and administrative and corporate functions, and the increased revenue we expect in the Americas segment as a result of the WFI U.S. acquisition in May 2007, we expect our cash flow to improve during 2008.

Due to the more favorable payment terms we have negotiated with certain customers in EMEA, and the automation and integration of certain processes into those of certain of our larger customers, we expect to continue to speed up the receivables to cash cycle.

Based upon a forecast of its operations for the remainder of the year ended December 31, 2008 the Company has informed Bank of America that it does not believe it will meet the Financial Covenants mentioned above, as well as an additional financial covenant, Consolidated Fixed Charge Ratio, which becomes effective for the quarter ending September 30, 2008, for the remainder of the year ended December 31, 2008.

Although, as noted above, Bank of America has not declared the Company in default and has not accelerated the due date of the debt, in accordance with U.S. GAAP, as prescribed in Emerging Issues Task Force release number 86-30, the Company has reclassified the $21.9 million due on November 30, 2009 as a current liability at March 31, 2008.

Cash Requirements

	September 30, 2007		December 31, 2006
	March 31,		December 31,
	2008		2007
	(in thousands)
Cash and cash equivalents (exclusive of restricted cash)	$	5,459	$	6,445
Cash and cash equivalents (excluding restricted cash)	$	5,662	$	9,630
Line of credit — short term	$	1,325	$	1,038
Borrowing facilities and notes payable	$	53,072	$	54,339
Note payable — short term	$	—	$	3,188
Working capital deficit	$	2,811	$	22,026
Working capital	$	29,899	$	33,490

Our future cash requirements are dependent on fluctuations in working capital, ~~reducing~~profitability of ~~our~~the ~~operating~~business ~~losses~~ and ~~achieving profitability~~ capital ~~equipment~~ purchase requirements. These fluctuations are caused primarily by several factors.

We continue to perform deployment services on a limited basis in certain countries (primarily Algeria and the U.K.) in the EMEA region. Historically, a significant number of deployment services contracts limit our ability to bill the customer until certain milestones are met. Additionally, some of the deployment services contracts contain provisions for the customer to withhold a portion of the payment of our billings (retainage) until the contract is complete. As a result of the milestone-based billings and retainages of amounts billed our working capital needs are increased as we incur costs in performing deployment services that require cash expenditures in advance of the billings and collections from our customers. Additionally, deployment services performed in certain countries (U.S., Italy and Spain) historically had very low profit margins. From time to time the ~~company~~Company has also entered into contracts for non-deployment services where milestone-based billings are used. While such contracts represent a lesser percentage of our business, they nonetheless result in working capital fluctuations. Additionally, Saudi Arabian regulations require a 10% hold back on all payments for services performed in Saudi Arabia until tax returns in that country are accepted by Saudi tax authorities.

25 During 2006, we significantly decreased our dependence on working capital intensive and lower margin deployment services as we exited that business in the U.S. and Brazil in the Americas region and wound down deployment service contracts in countries such as Italy and Spain. This has decreased working capital fluctuations and working capital needs. We will continue to focus our business on engineering services and Operations and Maintenance contracts. As a result of the decreased dependence on the deployment related services, we experienced less fluctuation in our working capital as non-deployment services are generally higher margin businesses and require less working capital. Additionally, such services are generally not milestone based or have shorter milestone periods and in many cases do not have retainage provisions. We have also been able to lessen some of the working capital

In 2006, we significantly decreased our dependence on working capital intensive and lower margin deployment services as we exited that business in the U.S. and Brazil in the Americas region 33and wound down deployment service contracts in countries such as Italy and Spain. This has decreased working capital fluctuations and working capital needs. Additionally, we will continue to focus our business on RF engineering services and operations and maintenance contracts. As a result of the decreased dependence on the deployment related services, we experienced less fluctuation in our working capital as non-deployment services are generally higher margin businesses and require less working capital. Additionally, such services are generally not milestone based or have shorter milestone periods and in many cases do not have retainage provisions. We have also been able to lessen some of the working capital needs created by these contracts by negotiating payment terms with our contractors that more closely match our payments to the vendors to the payments we receive from our customers. Additionally, to increase our liquidity we have entered into accounts receivable or other asset-based financing arrangements. Finally the reduced activity of deployment related services in the UK and Algeria have positively impacted cash flow as we have been able to collect amounts owed to us for such past services with no requirement to increase the need for working capital as a result of the relatively low level of new deployment service activity in 2007 and 2008.

~~needs~~ On ~~created~~July 3, by2007, ~~these~~we ~~contracts~~filed bya ~~negotiating~~current ~~payment~~report ~~terms with~~on ~~our~~Form ~~contractors~~8-K disclosing that ~~more~~as ~~closely~~a ~~match~~result ~~our~~of ~~payments~~reduced operations toin the ~~vendors~~ toUK ~~the~~and ~~payments~~Algeria weand ~~receive~~as ~~from~~part of our ~~customers.~~recent ~~To increase~~WFI ~~our~~acquisitions, ~~liquidity~~effective June 27, 2007, we have ~~entered~~taken ~~into~~steps ~~accounts~~towards ~~receivable or~~recognizing integration related and other ~~asset~~cost ~~based~~synergies ~~financing~~by implementing ~~arrangements~~a workforce reduction that eliminated approximately 60 positions worldwide and consolidated certain facilities in the U.SK. ~~and certain~~ ~~European~~Total ~~countries~~charges of approximately $1.6 million, ~~Finally~~were incurred primarily in the ~~reduced~~second ~~activity~~and third quarters of 2007. Approximately $1.0 million of the ~~deployment~~charge is related ~~services~~to inseverance ~~the~~and UKheadcount related costs and ~~Algeria~~$0.1 million ~~have~~is related to ~~positively~~consolidation ~~impacted~~of ~~cash~~certain ~~flow~~facilities asand other non-headcount related expenses. During the second quarter of 2007, we ~~have~~recorded ~~been~~a ~~able~~$0.5 million torecovery ~~collect~~of a prior restructuring charge. We paid the ~~amounts~~majority ~~owed~~of toseverance usand ~~for~~related ~~such~~costs ~~past~~in ~~services~~the third quarter of 2007, with nothe ~~requirement~~remaining tocosts paid ~~increase~~in the ~~need~~fourth ~~for~~quarter ~~working~~of ~~capital~~2007. asThe acash ~~result~~payments ofrelated to the consolidation of facilities will be ~~relatively~~made ~~low~~over ~~level~~the term of ~~new~~the ~~deployment~~related ~~service~~leases, ~~activity~~the longest of which terminates in ~~2007~~May 2014.

~~On July 3~~ Additionally, ~~2007,~~LCC wehas ~~filed a current report on~~certain ~~Form 8-K disclosing~~mandatory ~~that~~cash asrequirements aover ~~result~~the ofnext ~~reduced~~12 ~~operations~~months inwhich ~~the~~include UKlease ~~and Algeria~~obligations ~~and as part~~ of ~~our~~$6.0 ~~recent~~million ~~WFI acquisitions, effective June 27, 2007, we have taken steps towards recognizing integration related~~ and ~~other cost synergies by implementing a~~debt ~~workforce~~repayments ~~reduction that eliminated approximately 60 positions worldwide and consolidated certain facilities in the U.K. Total charges~~ of ~~approximately~~ $24.2 4 million,. ~~were~~In ~~incurred primarily~~addition, in the ~~second~~company ~~and~~has ~~third~~a ~~quarters of 2007. Approximately~~ $02.7 3 million ofterm ~~the~~loan ~~charge~~that is ~~related~~due ~~to severance~~in ~~and~~12 ~~headcount~~months ~~related~~under the ~~costs~~second ~~and~~amendment ~~$1.5 million is related~~ to ~~consolidation of certain facilities and other non-headcount related expenses. We paid~~ the ~~majority~~amended ~~of severance~~ and ~~related~~restated ~~costs~~credit inagreement ~~the~~with ~~third~~Bank ~~quarter~~ of ~~2007~~America. Also, ~~with~~ the ~~remaining costs expected to be paid in the fourth quarter of~~company ~~2007~~has $0. ~~The~~7 ~~cash~~million ~~payments~~that ~~related~~remains to ~~the consolidation of facilities will~~ be ~~made~~paid ~~over~~as ~~the~~part ~~term~~ of ~~the~~WFI ~~related~~EMEA ~~leases,~~acquisition ~~the~~that ~~longest~~occurred ~~of which terminates~~ in ~~May~~March ~~2012~~2007.

We believe that our cash balances, current financing agreements and access to additional financing will provide us with sufficient cash to fund our operations for at least the next 12 months.

Existing contractual obligations are primarily limited to operating leases, primarily for office facilities, and to a lesser extent, test equipment computers and office furniture.

~~Critical Accounting~~CRITICAL ~~Policies~~ACCOUNTING POLICIES

Our critical accounting policies are as follows:

• revenue recognition; • allowance for doubtful accounts; • accounting for income taxes; • restructuring charge; and • ~~share-based~~goodwill ~~compensation;~~ and •purchased ~~goodwill~~ and other intangibles.

Revenue recognition

Our principal sources of revenues consist of design and system deployment services. We provide design services on a contract basis, usually in a customized plan for each client, and ~~generally~~ generally charge for engineering services on a time and materials or fixed price basis. We generally offer ~~deployment~~ deployment services on a fixed price, time-certain basis. The portion of our revenues from fixed-price contracts was 5830.34% ~~and 52.3%~~ for the ~~nine~~three months ended ~~September~~March 3031, ~~2007~~2008 and ~~2006,~~was 54.7% for the ~~respectively~~year ended December 31, 2007. We recognize revenues on fixed-price contracts using the percentage-of -completion method. With the percentage-of -completion method, expenses on each project are recognized as incurred, and revenues are recognized based on the ratio of the current ~~costs~~ costs incurred for the project to the then estimated total costs of the project. We compare costs incurred to date against project milestones to determine if the percentage of completion is reasonable. Accordingly, revenues recognized in a given period depend on, among other things, the costs incurred on each individual project and our then current estimate of the total costs at completion for individual projects. Considerable judgment on the part of our management may be required in determining estimates to complete a project including the scope of the work to be completed, and reliance on the customer or other vendors to fulfill some task(s). If in any period we we significantly increase the estimate of the total costs to complete a project, we may recognize very little or no additional revenues with respect to that project. If total contract cost estimates increase, gross profit for any single project may be significantly reduced or eliminated. If the total contract cost estimates indicate that there is a loss, the loss is recognized in the period the determination is made. At March 31, 2008 and December 31, 2007, we had $24.1 million and $22.0 million respectively, of unbilled receivables.

26 34

made. At September 30, 2007 and December 31, 2006, respectively, we had $25.7 million and $24.8 million of unbilled receivables.

Allowance for doubtful accounts

The preparation of our consolidated financial statements requires our management to make estimates and assumptions that affect the reported amount of assets, liabilities, contingent ~~assets~~ assets and liabilities and the reported amounts of revenues and expenses during the reported period. Specifically, our management must make estimates of the probability of collection of accounts receivable. Management specifically analyzes accounts receivable balances, customer concentrations, ~~customer~~ customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the valuation allowance for doubtful accounts. For the ~~nine~~three months ended ~~September~~March 3031, ~~2007~~2008 and ~~2006~~2007, we derived 6461.74% and 82 75.63%, respectively, of total revenues from our ten largest customers, indicating significant customer concentration risk with our receivables. For the year ended December 31, ~~2006~~2007, we derived 83 63.62%% of total revenues from our ten largest customers. These ten largest customers constituted 6133.19% and 8062.39% of our net receivable balance as of ~~September~~March 3031, ~~2007~~2008 and December 31, ~~2006~~2007, respectively. Lastly, we frequently perform services for development stage customers, which carry a higher degree of risk, particularly as to the collection of of accounts receivable. These customers may be particularly vulnerable to the current tightening of available credit and general economic slowdown.

Accounting for income taxes

As part of the process of preparing our consolidated financial statements an estimate for income taxes is required for each of the jurisdictions in which we operate. This process requires estimating the actual current tax expense together with assessing temporary differences resulting from differing treatment of items, such as deferred revenues, for tax accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheet. We must then assess the likelihood that the deferred tax assets will be recovered from future taxable income and to the extent we believe that recovery is not likely, we must establish a valuation allowance. The valuation allowance is based on our estimates of taxable income by jurisdiction in which we operate and the period over which the deferred tax assets will be recoverable. In the event the actual results differ from these estimates, we may need to increase or decrease the valuation allowance, which could have a material impact on the financial position and results of operations.

We Considerable ~~assessed~~management ~~the~~judgment ~~realizability~~may ofbe ~~certain~~required ~~deferred tax assets~~ in ~~each~~determining ofour ~~the~~provision ~~quarters in 2007, consistent with the methodology we employed~~ for ~~2006. In that assessment~~income taxes, ~~we considered~~ the ~~reversal of existing temporary differences associated with~~ deferred tax assets, ~~future taxable income, tax planning strategies as considered~~ and ~~historical~~liabilities and ~~future pre-tax~~any ~~book~~valuation ~~income~~allowance asrecorded ~~adjusted~~against ~~for~~the ~~permanent differences~~net ~~between~~deferred ~~financial and~~ tax ~~accounting items~~assets. WeThese ~~will continue to evaluate the~~ deferred tax ~~asset~~assets ~~valuation allowance balances in~~primarily ~~our~~consist ~~U.S. and foreign companies throughout 2007 to determine the appropriate level~~ of ~~valuation~~net ~~allowance.~~operating Inlosses ~~July~~and ~~2006,~~tax ~~the~~credits ~~Financial~~carried ~~Accounting Standards Board (“FASB”) issued FASB Interpretation No~~forward. ~~48 (“FIN~~The ~~48”),~~net ~~Accounting~~deferred ~~for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109, which clarifies the accounting for uncertainty in~~ tax ~~positions.~~ ~~FIN~~assets 48as ~~requires that the Company recognize the impact~~ of ~~a tax position in the~~ ~~Company’s~~ended ~~financial statements if that position is more likely than not of being sustained on audit~~March 31, ~~based~~2008 ~~on the technical merits of the position. FIN 48 also provides guidance on derecognition, measurement, classification, interest~~ and ~~penalties~~December 31, ~~accounting in interim periods, disclosure, and transition. The provisions of FIN 48 are effective as of the beginning of the Company’s~~ 2007 ~~fiscal~~were ~~year, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. As part of our adoption of FIN 48, we recognized a~~ $02.9 5 million ~~increase in U.S.~~ and ~~foreign~~ ~~tax liabilities for unrecognized tax benefits which was accounted for as an increase of the January~~$2.0 1million, ~~2007 balance of the accumulated deficit~~respectively.

The Company adopted the provisions of FIN 48 on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized a $0.9 million increase in the liability for unrecognized tax benefits, which was accounted for as an addition to the January 1, 2007 accumulated deficit balance. The total amount of recognized tax benefits as of the date of adoption was approximately $0.9 million and includes both taxes and penalties. Additionally, at January 1, 2007, the Company’s deferred tax asset and corresponding valuation allowance were reduced by $1.9 million for cumulative FIN 48 adjustments related to years prior to 2007 that were not recognized as a cumulative adjustment to the accumulated deficit at January 1, 2007. In years prior to 2007, interest and penalties related to adjustments to income taxes as filed has not been significant. The Company intends to include such interest and penalties in its tax provision. There have been no changes in the liability for unrecognized tax benefits during the three months ended March 31, 2008.

Restructuring charge

During 2002, the ~~second~~Company ~~quarter~~adopted ofa ~~2007~~restructuring weplan ~~recorded~~(“2002 ~~net~~Restructuring”), ~~restructuring~~and recorded a ~~charges~~restructuring charge of $113.15 million for severance related costs and costs associated with closing facilities and disposing of assets in EMEA and our corporate offices. ~~Approximately~~The $0facility charge equals the existing lease obligation, less the anticipated rental receipts to be received from existing and potential subleases.~~5 million~~ This charge required significant judgments about the length of time that space will remain vacant, anticipated cost escalators and operating costs associated with the leases, ~~charge~~market israte ~~related~~of the subleased space, and broker fees or other costs necessary to ~~non-headcount~~market the space. During the second quarter of 2005, the Company adopted a restructuring plan (“2005 Restructuring”), and recorded a net restructuring charge of $0.8 million for severance related costs ~~expenses~~and costs associated with closing facilities and disposing of assets.

~~The~~ Substantially ~~restructuring~~all ~~charges~~the ~~primarily~~activities ~~relate~~related to ~~leased~~ ~~office~~the ~~space,~~2002 ~~which~~Restructuring weand nothe ~~longer~~2005 ~~occupy.~~Restructuring have ~~The~~been ~~facility charge~~completed. ~~equals~~However, the ~~existing~~Company ~~lease~~continues ~~obligation~~to ~~less~~be ~~anticipated rental~~obligated ~~receipts~~under tofacility beleases ~~received~~that expire from ~~existing~~2008 ~~and~~through ~~potential subleases~~2014. ~~This~~The ~~requires~~accrual ~~significant~~remaining ~~judgments~~at ~~about~~March 31, ~~the~~2008 ~~length~~includes less than $0.1 ofmillion ~~time~~in respect of the ~~space~~2002 ~~will~~Restructuring ~~remain~~and ~~vacant,~~the ~~anticipated~~2005 ~~cost escalators~~Restructuring plans, and ~~operating~~are associated with costs ~~associated~~attributable ~~with~~to ~~the~~remaining ~~leases,~~obligations through the year 2014 associated with offices ~~market~~exited ~~rate~~or atdownsized, ~~which~~offset by the ~~space~~Company’s ~~will~~estimates beof ~~subleased,~~future ~~and~~income ~~broker~~from sublease agreements. ~~fees~~The orremaining ~~other~~accrual ~~costs~~in ~~necessary~~respect toof ~~market~~the 2002 Restructuring and the ~~space.~~2005 ~~These~~Restructuring plans assumes ~~judgments~~as ~~were~~of ~~based~~March 31, ~~upon~~2008 ~~independent~~that ~~market~~the ~~analysis~~Company ~~and assessment~~will ~~from~~receive ~~experienced~~$2.1 million ~~real~~in ~~estate~~sublease ~~brokers~~income, all of which is committed.

27 ~~Share-based compensation~~

As During ~~part~~the second quarter of ~~our~~2007, ~~adoption~~the ofCompany ~~SFAS No~~took steps towards recognizing integration related and other cost synergies by implementing a workforce reduction that eliminated approximately 60 positions worldwide and consolidated certain facilities in the U. ~~123~~K., by adopting a restructuring plan (R“2007 Restructuring”), asand recorded a net restructuring charge of ~~January~~ $1.1 million. Approximately $1,.0 million ~~2006,~~of wethe ~~were~~charge ~~required~~was related to ~~recognize~~severance ~~the~~and ~~fair~~headcount related costs and ~~value~~$0.1 million ofwas ~~share~~related to other non-~~based~~headcount ~~compensation~~related ~~awards~~expenses. The Company recorded the severance charges related to these headcount reductions as an operating expense in the second and third quarters of 2007. WeThe ~~apply~~facilities and other non headcount related charges were recorded as operating expense in the ~~Black-Scholes~~second ~~option~~and ~~pricing~~third ~~model~~quarters of 2007. The Company paid the majority of severance and related costs in ~~order~~the third quarter with the remaining costs paid in the fourth quarter of 2007. The Company also recorded a restructuring charge of $0.5 million related to personnel severance costs in connection with the acquisition of certain assets and liabilities of the U.S. wireless engineering services business of WFI. The Company included these severance charges in goodwill. The accrual remaining at March 31, 2008 includes approximately $0.2 million in respect of the 2007 Restructuring.

In the first quarter of 2008, the Company adopted a restructuring plan (“2008 Restructuring”), 35and recorded a restructuring charge of $0.4 million for excess Corporate office space that is non-cancellable though 2017 that it has elected not to occupy and is attempting to sublet. The charge has been determined based on the fair values of the remaining lease rentals reduced by estimated sublease rentals.

~~determine~~Goodwill ~~the fair value of stock options on the date of grant,~~ and weOther ~~apply judgment in estimating key assumptions that are~~Intangibles elements in the model, such as the expected stock-price volatility, expected stock option life and expected forfeiture rates. Our estimates of these assumptions are based on historical data and judgment regarding market trends and factors. If actual results are not consistent with our assumptions and judgments used in estimating these factors, we may be required to record additional share-based compensation expense or income tax expense, which could be material to our results of operations.

In accordance with SFAS No. 142 (“SFAS 142”), “Goodwill and Other Intangibles Assets,” we review our goodwill for impairment annually, or more frequently, if facts and ~~intangibles~~circumstances warrant a review. We completed our annual impairment test in the fourth quarter of fiscal 2007 and determined that there was no impairment. We will complete the required impairment review in the fourth quarter of fiscal 2008.

We Upon ~~evaluate~~acquisition, our ~~goodwill~~intangible ~~and~~assets, which are subject to amortization, are recorded at fair value. SFAS 142 requires that intangible assets with finite lives be amortized over their estimated useful lives and reviewed for impairment ~~pursuant~~ towhenever an impairment indicator exists under SFAS No. ~~142~~144, ~~Goodwill~~“Accounting ~~and~~for ~~Other Intangible~~the ~~Assets~~Impairment ~~(“SFAS 142~~or Disposal of Long-Lived Assets.”), ~~which~~We continually ~~provides~~monitor events and changes in circumstances that ~~goodwill~~could ~~and~~indicate ~~other~~carrying amounts of our intangible assets may not be recoverable. When such events or changes in circumstances occur, we assess the recoverability of intangible assets ~~with~~by determining whether the carrying value of such assets will ~~indefinite~~be ~~lives~~recovered through the undiscounted expected future cash flows. If the future undiscounted cash flows are ~~not~~less ~~amortized~~than ~~but~~the ~~tested~~carrying ~~for~~amount of the intangible assets, we recognize an impairment loss ~~annually~~based oron ~~more~~the ~~frequently~~excess ifof ~~circumstances~~the ~~indicate~~carrying ~~potential impairment~~amount over the fair value of the assets. ~~The~~We did not recognize intangible asset impairment ~~test~~charges isduring ~~comprised~~the ofthree ~~two~~months ~~steps:~~ended March 31 2008 and 2007.

~~(1) A~~ Our ~~reporting~~intangible ~~unit’s~~assets ~~fair value is compared to its carrying value. The carrying values of each reporting unit~~ are ~~determined~~ byamortized ~~specifically~~over ~~identifying~~their ~~and~~estimated ~~allocating~~useful ~~the~~lives ~~assets and liabilities~~ of ~~the~~1 ~~Company~~ to ~~each~~15 years. Generally, ~~reporting~~amortization ~~unit~~is based on ~~headcount,~~ ~~relative~~the ~~revenues~~pattern orin ~~costs,~~which orthe ~~other~~economic ~~methods~~benefits ~~as deemed~~of ~~appropriate by management. If~~ the ~~fair value is less than~~intangible ~~its~~asset ~~carrying~~will ~~value,~~be ~~impairment is indicated;~~consumed.

(2) If impairment is indicated in the first step, it is measured by comparing the implied fair value of goodwill and intangible assets to their carrying value at the reporting unit level.

We will complete the required impairment review in the fourth quarter of fiscal 2007.

RELATED PARTY TRANSACTIONS

The Rajendra and Neera Singh Charitable Foundation (the “Foundation”) owns more than 10% of our equity shares and ~~during~~ up to the third quarter of 2007 two members of the Singh family, Dr. Rajendra and Neera Singh, served as members of our Board of Directors. In connection with ~~our~~the Company’s initial public offering in 1996, wethe Company agreed ~~pursuant~~ to ~~an Overhead and Administrative Services Agreement to~~ allow the employees of Telcom Ventures, a company controlled by the Singh family, to continue to participate in ~~our~~the Company’s employee benefit plans in exchange for full reimbursement of ~~our~~its cash costs and expenses. WeThe ~~billed~~Company billed Telcom Ventures approximately $1918,000 and $2920,000 during the three months ended ~~September~~March 3031, ~~2007~~2008 and ~~September 30, 2006,~~ ~~respectively, and approximately $58,000 and $105,000 during the nine months ended September 30,~~ 2007 ~~and September 30~~, ~~2006,~~ respectively~~, for payments made by us pursuant to this agreement~~. WeThe Company received reimbursements from Telcom Ventures of ~~approximately~~ $186,000 and $4320,000 during the three months ended ~~September~~March 3031, ~~2007~~2008 and ~~September 30,~~ ~~2006 and approximately $51,000 and $109,000 million during the nine months ended September 30,~~ 2007 ~~and September 30~~, ~~2006~~respectively. At ~~September~~March 3031, ~~2007~~2008 and December 31, ~~2006~~2007, outstanding amounts associated with payments made by usthe Company under this agreement were approximately $86,000 and $17,000, respectively, and are included as due from related parties and affiliates within the condensed consolidated balance sheets in the accompanying financial statements. Also included in due from related parties and affiliates are employee advances of $48,000 and $25,000 at March 31, 2008 and December 31, 2007, respectively.

The ~~During~~Company ~~the three months ended September 30, 2007 and 2006, we~~ provided services to two customers where Telcom Ventures ~~has~~had a minority investment. ~~Revenues~~For ~~earned from these customers were not significant for~~ the three months ended ~~September~~March 3031, ~~2007~~ 2008 and ~~September 30~~2007, ~~2006.~~revenues ~~Revenues~~ earned from these customers were approximately ~~$0.1 million and~~ $~~0.3 million for the nine months ended September 30~~70,000 ~~2007~~ and ~~September 30,~~ ~~2006~~$56, ~~respectively~~000. Billed and unbilled receivables outstanding from this customer were approximately $~~0.1 million~~31,000 as of March ~~September 30~~31, ~~2007~~2008 and $6635,000 as of December 31, ~~2006~~ 2007, and are included in trade accounts receivable and ~~unbilled~~ unbilled receivables in the accompanying condensed consolidated balance sheets.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to the impact of foreign currency fluctuations. The exposure to exchange rates relates primarily to our foreign subsidiaries. Subsidiaries with material foreign currency ~~exposure~~ exposure are in England, Algeria and Saudi Arabia. For our foreign subsidiaries, exchange rates can have an impact on the U.S. dollar value of their reported earnings and the inter-company transactions with the subsidiaries.

Approximately 71.1% and 83.1% of the Company’s revenues were generated by our EMEA segment for the three months ended March 31, 2008 and 2007, respectively, the majority of which were in the 36Netherlands, Saudi Arabia, and the UK in 2008 and 2007. In connection with the increased availability of 3G equipment in Europe, we anticipate continued growth of our international operations, particularly in Europe, the Middle East and Africa, in 2007 and beyond. As a result, fluctuations in the value of foreign currencies against the United States dollar may have a significant impact on our reported results. Revenues and expenses denominated in foreign currencies are translated monthly into United States dollars at the weighted average exchange rate. Consequently, as the value of the dollar strengthens or weakens relative to other currencies in our major markets the resulting translated revenues, expenses and operating profits become lower or higher, respectively.

~~and~~ Fluctuations ~~Saudi~~in ~~Arabia.~~currency ~~For our foreign subsidiaries,~~ exchange rates also can have an impact on the United States dollar amount of our shareholders’ equity. The assets and liabilities of the non-U.S. ~~dollar~~ ~~value~~subsidiaries are translated into United States dollars at the exchange rate in effect on the date of ~~their~~the balance ~~reported~~sheet ~~earnings~~for ~~and~~the respective reporting period. The resulting translation adjustments are recorded in shareholders’ equity as accumulated other comprehensive income. Consequently, the ~~intercompany~~accumulated ~~transactions~~other comprehensive ~~with~~income component of shareholders’ equity increased $2.5 million during the three ~~subsidiaries~~months ended March 31, 2008.

~~Approximately~~ We ~~60.7%~~are ~~and~~exposed ~~69.6%~~to the impact of ~~the~~foreign ~~Company’s~~currency ~~revenues were~~fluctuations ~~generated~~due ~~outside~~to ~~the~~our London and U.S. ~~for~~ offices ~~the~~funding ~~three~~foreign ~~and~~subsidiaries. ~~nine months~~While ~~ended~~these ~~September 30,~~inter-company ~~2007,~~balances ~~respectively,~~are ~~the~~eliminated ~~majority~~in ofconsolidation, ~~which~~exchange ~~were~~rate inchanges ~~the~~do ~~Netherlands,~~affect ~~the~~consolidated ~~UK,~~earnings. ~~Algeria~~Foreign ~~and~~subsidiaries ~~Saudi~~with ~~Arabia~~amounts owed from the London operations at March 31, 2008 (denominated in ~~2007~~Euros) ~~and~~include Italy in the amount of $4.6 million, Algeria in the amount of $6.1 million and Saudi Arabia in ~~2006~~the amount of $7.4 million. AsForeign asubsidiaries ~~result~~with amounts owed to the McLean operations at March 31, 2008 ~~fluctuations~~(denominated in ~~the~~Euros ~~value~~or ofBritish ~~foreign~~Pounds) ~~currencies~~include ~~against~~Italy in the amount of $4.6 million and the United Kingdom ~~States~~in ~~dollar~~the ~~may~~amount ~~have~~of $15.5 million. These balances generated a ~~significant~~foreign ~~impact~~exchange onloss ~~our~~of $1.4 ~~reported~~million included in our consolidated results for the three months ended March 31, 2008. ~~Revenues~~A hypothetical appreciation of the Euro and ~~expenses~~British ~~denominated~~Pound of 10% would result in ~~foreign~~a $0.2 million ~~currencies~~increase ~~are~~to ~~translated~~our ~~monthly~~operating ~~into~~profits ~~United~~in ~~States~~2008 ~~dollars~~generated at outside the ~~weighted~~United ~~average~~States. ~~exchange~~This ~~rate.~~was ~~Consequently,~~estimated using asa ~~the~~10% ~~value of~~appreciation factor to the ~~dollar~~average ~~strengthens~~monthly orexchange ~~weakens~~rates ~~relative~~applied to ~~other~~net income or loss ~~currencies~~for ineach of our ~~major~~subsidiaries ~~markets~~in the ~~resulting~~respective ~~translated revenues,~~period. ~~expenses~~Foreign exchange gains and ~~operating~~losses ~~profits~~recognized on ~~become~~any ~~lower~~transactions orare ~~higher, respectively~~included in our condensed consolidated statements of operations.

Fluctuations in currency exchange rates also can have an impact on the United States dollar amount of our shareholders’ equity. The assets and liabilities of the non-U.S. subsidiaries are translated into United States dollars at the exchange rate in effect on the date of the balance sheet for the respective reporting period. The resulting translation adjustments are recorded in shareholders’ equity as accumulated other comprehensive income. Consequently, the accumulated other comprehensive income component of shareholders’ equity increased $2.3 million during the nine months ended September 30, 2007.

We are exposed to the impact of foreign currency fluctuations due to our London and U.S. offices funding foreign subsidiaries. While these intercompany balances are eliminated in consolidation, exchange rate changes do affect consolidated earnings. Foreign subsidiaries with amounts owed from the London operations at September 30, 2007 (denominated in Euros) include Italy in the amount of $5.1 million, Algeria in the amount of $9.6 million and Saudi Arabia in the amount of $7.1 million. Foreign subsidiaries with amounts owed to the McLean office at September 30, 2007 (denominated in Euros or British Pounds) include Italy in the amount of $4.5 million and the United Kingdom in the amount of $15.0 million. These balances generated a foreign exchange loss of $0.9 million included in our consolidated results for the nine months ended September 30, 2007. A hypothetical appreciation of the Euro and British Pound of 10% would result in a $0.9 million increase to our operating profits in 2007 generated outside the United States. This was estimated using a 10% appreciation factor to the average monthly exchange rates applied to net income or loss for each of our subsidiaries in the respective period. Foreign exchange gains and losses recognized on any transactions are included in our consolidated statements of operations.

We currently do not hedge any of these risks in our foreign subsidiaries because: (i) our subsidiaries generally earn revenues and incur expenses within a single country and, consequently, do not incur currency risks in connection with the conduct of their normal operations; (ii) other foreign operations are minimal; and (iii) we do not believe that hedging transactions are justified by the current exposure and cost at this time.

~~ITEM 4: CONTROLS AND PROCEDURES~~29

~~(a)~~ITEM ~~Disclosure~~4. ~~Controls~~CONTROLS ~~and~~AND ~~Procedures~~PROCEDURES

~~The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company under the Securities Exchange Act of 1934~~ (~~the “Exchange Act”~~a) Evaluation ~~is recorded, processed, summarized and reported within the time periods specified in the rules and forms~~ of ~~the~~Disclosure ~~SEC.~~Controls ~~These disclosure controls~~ and ~~procedures are~~Procedures designed to ensure that appropriate information is accumulated and communicated to the Company’s management, including its chief executive officer and chief financial officer, as appropriate to allow for timely decisions regarding disclosure.

As The ~~required by the SEC rules, the~~ Company’s management, ~~under~~ ~~the supervision and~~ with the participation of ~~the Company’s~~its ~~chief~~Chief Executive Officer, who is its principal executive officer, and ~~chief~~its Chief Financial Officer, who is its principal financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined ofin ~~September~~Rules ~~30,~~13a-15(e) ~~2007. This evaluation included consideration of the facts~~ and ~~circumstances,~~ ~~and~~15d-15(e) ~~subsequent~~under ~~remediation efforts, relating to~~ the ~~material~~Securities ~~weaknesses~~Exchange ~~identified~~Act inof ~~the~~1934) ~~Company’s~~as ~~2006 Annual~~of ~~Report on Form~~March ~~10-K~~31, 2008. Based on ~~their~~ that evaluation, the ~~chief~~Company’s ~~executive~~Chief ~~officer~~Executive Officer and ~~chief~~Chief ~~financial officer~~Financial Officer have concluded that, as of ~~September~~March 3031, ~~2007~~2008, the Company’s disclosure controls ~~were~~and procedures were not effective ~~because~~as a result of the material weaknesses ~~described~~in internal control over financial reporting noted in item (b) below.

~~Material Weaknesses In~~ (b) Internal ~~Controls~~Control ~~Over~~over Financial Reporting

~~A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company~~Management’s ~~annual~~Report oron ~~interim~~Internal ~~quarterly~~Control ~~financial~~over ~~statements~~Financial ~~will~~Reporting ~~not be prevented on a timely basis.~~

In The ~~the~~ Company’s ~~2006~~management ~~Annual~~is ~~Report~~responsible ~~on Form 10-K which~~for ~~was~~establishing ~~filed~~and onmaintaining ~~December 12,~~adequate ~~2007, the Company~~internal ~~identified~~control ~~two~~over ~~material~~financial ~~weaknesses,~~reporting ~~one,~~for inthe ~~its~~Company. ~~internal~~Internal control over financial reporting ~~relating~~is defined toin ~~the~~Rule 13a-15(f) ~~monitoring~~or15d-15(f) ~~of individual~~promulgated ~~accounts~~under ~~and~~the ~~classes~~Securities Exchange Act of ~~transactions~~1934 byas ~~personnel~~a ~~with~~process ~~sufficient~~designed ~~expertise~~by, ~~and~~or ~~secondly,~~under inthe ~~regard~~supervision toof, the ~~lack~~Company’s ~~of supervisory~~principal ~~review~~executive ofand ~~accrual~~principal financial ~~based~~officers ~~costs~~and ~~specific~~effected toby ~~Algeria. The~~the Company’s ~~has~~board ~~also~~of ~~determined~~directors, ~~that~~management ~~during~~and ~~2007~~other personnel, itto ~~did~~provide ~~not~~reasonable ~~maintain effective~~assurance ~~controls~~regarding ~~over~~ the ~~preparation~~reliability of ~~its~~financial ~~consolidated~~reporting ~~income tax~~and ~~provision,~~the ~~including~~preparation ~~processes~~of ~~followed~~financial instatements ~~the~~for ~~identification~~external ~~and~~purposes in accordance ~~measurement~~with ofgenerally ~~uncertain~~accepted ~~tax~~accounting ~~positions,~~principles ~~which~~and ~~results~~includes inthose apolicies ~~material~~and procedures that: ~~weakness.~~

37 • Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

In Because ~~2007,~~of ~~the~~its ~~Company~~inherent ~~took~~limitations, ~~steps~~internal tocontrol ~~remediate~~over ~~the~~financial ~~two~~reporting ~~material weaknesses~~may tonot ~~ensure~~prevent or ~~competent~~detect ~~and~~misstatements. ~~timely~~Projections ~~monitoring~~ of ~~internal controls~~any ~~and~~evaluation ~~strict~~of ~~oversight~~effectiveness ~~over~~to ~~the~~future ~~accrual~~periods ~~process in~~are ~~Algeria.~~subject ~~However,~~to asthe ofrisk ~~September~~that ~~30,~~controls ~~2007~~may ~~these~~become ~~steps~~inadequate ~~had~~because ~~not been completed and, therefore as~~ of ~~September~~changes ~~30,~~in ~~2007~~conditions, weor ~~did~~that ~~not~~the ~~maintain~~degree ~~effective~~of ~~internal~~compliance ~~controls~~ with ~~regard~~the topolicies ~~the~~or ~~above identified~~procedures ~~material~~may ~~weaknesses~~deteriorate.

In The ~~regard~~Company’s tomanagement evaluated the ~~deficiency~~effectiveness ~~related~~of ~~to monitoring,~~ the Company ~~utilized~~’s aninternal ~~experienced~~control ~~professional services firm and~~over ~~independent~~financial ~~contractor~~reporting toas ~~partner~~of ~~with management to execute its Internal Audit function and develop~~March 31, ~~plan, implement, and execute, testing of internal controls which occured during 2007~~2008. ~~This~~The ~~process~~Company’s ~~allowed~~ management tobased ~~evaluate~~the ~~and~~evaluation ~~assess~~on the ~~effectiveness of~~ ~~the~~criteria ~~controls.~~set ~~The~~forth ~~Company~~by ~~took~~the anCommittee ~~additional~~of ~~step~~Sponsoring toOrganizations ~~enhance~~of ~~its~~the ~~internal control~~Treadway ~~environment~~Commission ~~by creating a senior level management~~(COSO) ~~position~~in ~~overseeing~~its Internal ~~Audit~~Control-Integrated ~~that was filled by a qualified candidate effective January 2, 2008~~Framework.

In Based ~~respect~~on tothis evaluation, the ~~accrual~~Company’s ~~process~~management inis ~~Algeria,~~reporting ~~in 2007,~~ the ~~Company~~following ~~took~~material ~~the~~weaknesses ~~following~~as ~~steps~~of March 31, 2008:

• The ~~Provided~~Company ~~management~~failed ~~training of operations and financial personnel as~~ to ~~the~~maintain ~~identification~~effective ofcontrols ~~all~~over of the ~~cost~~preparation ~~elements that should be included in the accrual~~ of ~~costs related to~~ its ~~deployment~~consolidated income ~~activities.~~tax •provision, ~~Required~~including aprocesses ~~monthly~~followed ~~review~~in by the ~~SVP~~identification ofand ~~EMEA~~measurement of uncertain ~~all~~tax ~~elements of the entity level financial statements including all accrual based entries~~positions.

The Company ~~took~~failed anto ~~additional~~effectively ~~step~~plan, tomonitor, ~~enhance~~and ~~internal~~carry ~~control~~out ~~environment~~timely ~~by creating~~review aactivities ~~Controller~~of individual ~~position~~accounts inand ~~Algeria~~classes toof ~~oversee~~transactions ~~financial operations~~that ~~and~~resulted ~~monitor~~in ~~effectiveness~~the ofCompany’s ~~controls.~~inability ~~The~~to ~~position~~meet is ~~was~~financial ~~filled~~reporting byfiling adeadlines ~~qualified~~with ~~candidate~~the ~~in December 2007~~SEC.

~~(b)~~ Because ~~Changes~~of inthe ~~Control~~material weaknesses described above, management concluded that the Company’s internal controls over ~~Financial~~financial ~~Reporting~~reporting were not effective as of March 31, 2008.

~~The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules 13a-15~~(fc) ~~and 15d-15(f). The~~ Changes Company’s internal control over financial reporting is a process designed by or under the supervision of the chief executive officer and chief financial officer to provide reasonable assurance to the Company’s management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in ~~accordance with generally accepted accounting principles.~~ Internal ~~control~~Control over ~~financial~~Financial ~~reporting includes~~Reporting ~~those policies and procedures that:~~

• The ~~pertain~~Company totook ~~the~~several ~~maintenance~~steps ofto ~~records~~improve ~~that,~~its ininternal ~~reasonable~~controls ~~detail,~~in ~~accurately~~2007 ~~and~~that ~~fairly~~protect ~~reflect~~ the integrity ~~transactions and dispositions~~ of ~~the~~LCC’s ~~assets~~financial ofreporting. In the Company;’s •Annual ~~provide~~Report ~~reasonable~~for ~~assurance~~the ~~that~~year ~~transactions~~end ~~are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles~~December 31, ~~and~~2007 ~~that~~on ~~receipts~~Form ~~and~~10-K ~~expenditures of~~ (the ~~company~~“2007 ~~are~~10-K”), ~~being~~LCC ~~made~~reported ~~only~~two inmaterial ~~accordance~~weaknesses ~~with~~that ~~authorizations~~were ofself identified. ~~management~~In ~~and~~2008 ~~directors~~LCC oftook ~~the~~steps ~~Company;~~to ~~and~~remediate •these ~~provide~~two ~~reasonable~~material ~~assurance~~weaknesses. ~~regarding~~The ~~prevention~~overall orchanges are ~~timely~~covered ~~detection~~in ofitem ~~unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements~~(d) below.

~~Because~~(d) Remediation ~~of its inherent limitations, internal control over~~Efforts financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

~~Except~~ In as2008, ~~described~~the ~~above,~~Company ~~there~~took ~~have~~steps ~~been~~to noremediate ~~other changes~~the two material weaknesses reported in the 2007 10-K, which were that the Company’s ~~internal~~failed ~~control~~to maintain effective controls over ~~financial~~the preparation of its ~~reporting~~consolidated ~~that~~income ~~occurred~~tax ~~during~~provision, ~~the~~including ~~quarter~~processes ~~ended~~followed ~~September~~in ~~30,~~the identification and ~~2007~~measurement ~~that~~of ~~have~~uncertain ~~materially~~tax ~~affected,~~positions orand ~~are~~the ~~reasonably~~Company ~~likely~~failed to ~~materially~~effectively ~~affect~~plan, ~~our~~monitor, and ~~internal~~carry ~~control~~out ~~over~~timely review activities of individual accounts and classes of transactions that resulted in the Company’s inability to meet is financial reporting filing deadlines with the SEC.

In regard to the deficiency related to preparation of its consolidated income tax provision, the Company utilized an experienced professional services firm to partner with management to 38prepare its consolidated income tax provision, including processes followed in the identification and measurement of uncertain tax positions. These activities were not completed by March 31, 2008.

In regard to the failure to effectively plan, monitor, and carry out timely review activities of individual accounts and classes of transactions that resulted in the Company’s inability to meet is financial reporting filing deadlines with the SEC, the Company hired an experienced Corporate Controller and Assistant Controller to improve these processes. These activities were not completed by March 31, 2008.

PART II: OTHER INFORMATION

Item 1: Legal Proceedings

We are party to various non-material legal proceedings and claims incidental to our business.

Item 1A: Risk Factors

There have been no material changes in our risk factors from what was disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2006~~2007.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

Not Applicable

Item 3: Defaults Upon Senior Securities

Not Applicable

Item 4: Submission of Matters to a Vote of Security Holders

Not Applicable

Item 5: Other Information

On Not ~~June 1, 2007, the Company issued a Subordinated Promissory Note (“Note”) to WFI in connection~~Applicable with the purchase of the WFI US Engineering Business. The Original amount of the Note was $21.6 million. Such amount was subsequently increased to $23.9 million as result of a purchase price adjustment agreed to by the Company on January 22, 2008, related to the value of certain assets transferred, and a replacement Note in the increased amount was issued by the Company on February 18, 2008. The Note has interest payable at rates based on the British Banker Association Rate (“BBA LIBOR”) that escalate on various dates from BBA LIBOR plus 4% on June 1, 2007 to BBA LIBOR plus 13% on January 1, 2010 and which rate is increased by an additional 1% every six (6) months thereafter. This note was subsequently sold by WFI to a third party. The Note is subordinated to the credit facility with Bank of America which among other things limits cash payments of interest or principal until certain conditions in the credit facility with Bank of America are met. The Note is payable on June 1, 2010.

Item 6: Exhibits

	10	.1	—	Letter Agreement, dated September 29, 2007, between LLC International, Inc. and Melvin L. Keating (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on October 25, 2007).
31.1		—	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a)/15d -14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.1	—	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a)/15d -14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		—	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a)/15d -14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2	—	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a)/15d -14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		—	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32	.1	—	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		—	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32	.2	—	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

31 39

SIGNATURE ~~Signature~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

/s/ Louis Salamone, Jr. Louis Salamone, Jr. Executive Vice President, Chief Financial Officer and Treasurer

~~Louis Salamone~~June 27, ~~Jr.~~2008 ~~Executive Vice President and Chief Financial Officer and Treasurer~~

32 ~~February 21, 2008~~

Filing Compare · LCC INTERNATIONAL INC