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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
    of 1934 for the fiscal year ended June 30, 2002 or

[_] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

                         Commission file number 0-15187
                                 IFX CORPORATION
             (Exact name of Registrant as specified in its charter)

                  Delaware                                  36-3399452
     -----------------------------------             -----------------------
       (State or other jurisdiction of                  (I.R.S. Employer
        incorporation or organization)                 Identification No.)

                         15050 NW 79/th/ Court, Ste. 200
                           Miami Lakes, Florida 33016
               (Address of principal executive offices) (Zip code)
        ---------------------------------------------------------------

                                 (305) 512-1100
        ---------------------------------------------------------------
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:

                                      None
                                      ----

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.02 par value
                          ----------------------------

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

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K.


     As of September 30, 2002, the aggregate market value stock held by
non-affiliates of the registrant was approximately $1.6 million based on the
$0.31 per share closing price on the NASDAQ National Market on such date.

     As of September 30, 2002, there were 11,963,399 outstanding shares of the
Registrant's common stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of our Proxy Statement for the Annual Meeting of Stockholders to
be filed within 120 days after June 30, 2002 are incorporated herein by
reference in response to Part III, Items 10 through 14.

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                                TABLE OF CONTENTS
                                -----------------

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PART I

       Item 1.     Business ........................................................      3

       Item 2.     Properties ......................................................     11

       Item 3.     Legal Proceedings ...............................................     11

       Item 4.     Submission of Matters to a Vote of Security Holders .............     11

PART II

       Item 5.     Market for IFX Corporation's Common Equity and Related
                   Stockholder Matters .............................................     12

       Item 6.     Selected Financial Data .........................................     13

       Item 7.     Management's Discussion and Analysis of
                   Financial Condition and Results of Operations ...................     14

       Item 7a.    Quantitative and Qualitative Disclosures About Market Risk ......     23

       Item 8.     Financial Statements and Supplementary Data .....................     24

       Item 9.     Changes in and Disagreements with Accountants
                   on Accounting and Financial Disclosures .........................     50

PART III

       Item 10.    Directors and Executive Officers
                   of the Registrant ...............................................     50

       Item 11.    Executive Compensation ..........................................     50

       Item 12.    Security Ownership of Certain Beneficial
                   Owners and Management ...........................................     50

       Item 13.    Certain Relationships and Related Transactions ..................     50

       Item 14.    Controls and Procedures .........................................     50

PART IV

       Item 15.    Exhibits, Financial Statement Schedules
                   and Reports on Form 8-K .........................................     50

                   Signatures ......................................................     53

                   Certifications ..................................................     54
</TABLE>

                                       2

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                           FORWARD LOOKING STATEMENTS

     Except for the historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties. When used herein, the words, "intend," "anticipate," "believe,"
"estimate," "may," "should," "plans," "will," "continue," "expect," and similar
expressions as they relate to the Company are intended to identify such
forward-looking statements. The Company's actual results, performance or
achievements could differ materially from those discussed here. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed in Item 1, "Business" as well as Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

                                     PART I

ITEM 1.  BUSINESS

Introduction

     IFX Corporation (IFX Corporation and its subsidiaries are referred to
herein as "IFX", "IFX Networks" or the "Company") was incorporated in Delaware
in 1985. The Company's operations are headquartered in Miami Lakes, Florida. IFX
operates a pan-regional Internet Protocol ("IP") network, which was established
through a series of acquisitions and Company-initiated start-up operations. IFX
operates networks in Argentina, Brazil, Chile, Colombia, Mexico, Panama,
Uruguay, Venezuela and the United States. The Company also operates networks in
El Salvador, Honduras, Guatemala and Nicaragua (collectively, the "Central
American Operations"), which the Company plans to sell or otherwise dispose of
during fiscal 2003. Excluding the Central American Operations, IFX has over 50
Company-owned Points of Presence ("POPs"), and 385 employees in the United
States and Latin America.

     IFX's network infrastructure, which is marketed under the IFX Networks
brand name, provides Internet network connectivity and offers a broad range of
value-added services to multinationals, Internet Service Providers ("ISPs"),
telecommunications carriers and small to medium-sized businesses in Latin
America. IFX believes that it has one of the more extensive geographic networks
in Latin America. Although the Company's primary focus is to pursue
multinational businesses, telecommunications carriers and small to medium-sized
businesses in Latin America, the Company continues to provide limited consumer
Internet products and services.

     IFX offers network solutions that include region-wide wholesale and private
label Internet access, dedicated fixed wireline and wireless Internet access,
unlimited dial-up roaming access to IFX Network's POPs throughout the Latin
American region, web design, web-hosting and co-location, dial-up local area
network, or LAN services, and virtual private network, or VPN services, and full
technical support.

     The IFX network is composed of the following (excluding the Central
American Operations):

     .   Over 50 Company-owned POPs. A POP is an interlinked group of modems,
         routers and other computer equipment, located in a particular city that
         allows a nearby subscriber to access the Internet through a local
         telephone call or dedicated local connection.

     .   Approximately 36,000 Remote Access Servers, or RAS ports.

     .   Network Operating Centers in 8 Latin American countries and the United
         States.

Network Operating Centers in Latin American Countries and the United States

     Among the services offered by IFX Networks is the wholesaling of its IP
network infrastructure to parties that wish to offer Internet services in the
region, such as Tutopia.com, Inc. (referred to herein as "Tutopia"), a leading
provider of Internet access on a pan-regional level. Tutopia is controlled by
UBS Capital Americas, III, L.P., which also has a controlling interest in IFX.

     Tutopia, which was a majority-owned subsidiary of IFX until August 31,
2000, pioneered free Internet access on a Latin American regional basis starting
in January 2000 and currently operates in 9 countries - Argentina, Brazil,
Chile, Colombia, El Salvador, Guatemala, Mexico, Panama and Venezuela.
Presently, Tutopia offers both by-the-minute or on-demand Internet access and
conventional pre-paid unlimited Internet access service. As of September 30,
2002, IFX had an interest of approximately 44% in the voting shares of Tutopia
(on an "as converted" basis, assuming the outstanding preferred stock of Tutopia
was converted to common stock).

                                       3

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     The Company has a number of corporate wholesale access customers in Latin
America, including T1msn, Corp. ("Tlmsn"). Services are provided to T1msn in
Argentina, Chile, El Salvador, Guatemala, Panama and Venezuela. See "Wholesale
Access Service - Agreement with T1msn".

The IFX Network

     IFX operates a region-wide Latin American IP-based network that provides
customers with a reliable data transmission path to the Internet. IFX has POPs
in the major markets in Latin America, which are operated by local management
teams.

     .   Network Infrastructure. The IFX network infrastructure consists of
         three primary tiers: local POPs; a middle tier, which connects the POPs
         to national hubs; and a backbone tier, which connects the national hubs
         to the Internet. Excluding the Central American Operations, the IFX
         network currently includes approximately 50 POPs that are owned by the
         Company and 26 virtual POPs operated by third-party network providers.
         Each POP is connected to one of IFX's 8 national hubs in each
         respective country through a dedicated point-to-point line, typically
         provided by a local telecommunications carrier. The Company's POPs are
         connected to the Internet by multiple leased, high-speed fiber optic
         connections. Presently IFX utilizes high-speed, high-capacity
         trans-oceanic leased fiber connections (STM-1) that link IFX's U.S.
         operations with Argentina, Brazil, Chile, Colombia and Venezuela. IFX
         believes that its network capacity is adequate for the provision of
         current and planned access and value-added services, but intends to
         opportunistically expand network capacity as the need for additional
         network capacity arises.

         IFX's network includes owned POPs in the following cities as of June
         30, 2002:

                ARGENTINA             CHILE                 MEXICO
                ---------             -----                 ------
                Buenos Aires          Antofagasta           Guadalajara
                Cordoba               Chillan               Mexico City
                Mendoza               Concepcion            Monterrey
                Rosario               La Serena             Toluca
                                      Los Angeles
                BRAZIL                Rancagua              NICARAGUA
                ------                Santiago              ---------
                Belo Horizonte        Talca                 Managua*
                Blumenau              Temuco
                Campo Bom             Valparaiso            PANAMA
                Canoas                                      ------
                Curtiba               COLOMBIA              Panama City
                Florianopolis         --------
                Fortaleza             Barranquilla          UNITED STATES
                Joinville             Bogota                -------------
                Novo Hamburgo         Cali                  Miami, Florida
                Pelotas               Medellin
                Porto Alegre                                URUGUAY
                Rio de Janeiro        EL SALVADOR           -------
                Salvador              -----------           Salto
                Santa Maria           San Salvador*         Montevideo
                Sao Leopoldo                                Pando
                Sao Paulo             GUATEMALA             Maldonado
                                      ---------             Tacuarembo
                                      Guatemala City*
                                                            VENEZUELA
                                      HONDURAS              ---------
                                      --------              Barquisimeto
                                      San Pedro Sula*       Caracas
                                      Tegucigalapa*         Maracaibo
                                                            Maturin
                                                            Porlamar
                                                            Puerto La Cruz
                                                            Puerto Ordaz
                                                            Punto Fijo
                                                            Valencia
                                                            Valera

     * Locations anticipated to be sold or disposed of during fiscal 2003.

                                       4

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     .   Network Management. IFX considers network management to be essential
         for monitoring its network in multiple countries, maintaining high
         customer satisfaction and improving network quality. In addition to
         certain region-wide network monitoring capabilities at its headquarters
         in Miami Lakes, Florida, IFX has established network operating systems
         in multiple Latin American countries that monitor the performance of
         IFX's network equipment. With these systems, IFX is able to efficiently
         identify and correct network problems either remotely or by local
         dispatch.

      .  Sales and Customer Service. IFX offers its services through a sales
         approach that makes use of local technical talent who understand
         customer applications to help provide bundled Internet solutions
         consisting of Internet access and other value-added services. This
         localized approach allows the Company to provide end-to-end customer
         solutions and ongoing support. IFX's direct sales force of
         approximately 67 individuals offers a core base of technically
         competent, locally based and experienced Internet sales
         representatives. IFX provides business customers with technical support
         and customer service through its local customer service
         representatives.

Business Strategy

    IFX's goal is to become a leading provider of IP based network solutions to
multinational corporations, ISPs, telecommunications carriers, and small to
medium-sized businesses in Latin America through the delivery of single source
Internet solutions.

    IFX management believes that many businesses are seeking to increase their
use of the Internet as a business tool and are integrating web-based services
into their business processes. Many businesses desire economical Internet access
for their corporate offices and employees who travel, thereby creating demand
for region-wide dedicated and dial-up Internet access. IFX management believes
that within the business marketplace there is opportunity to upgrade customers
to increasingly higher margin value-added services. IFX anticipates that
businesses will continue to seek to outsource certain information technology
functions to full-service IP-based network providers in order to reduce costs
and improve results. IFX's management has made the decision to concentrate on
eight core country operations in Latin America and intends to either sell or
otherwise dispose of its Central American Operations during fiscal 2003.
Management believes that by focusing on these eight countries, the Company
should be in a position to better utilize its resources in the future.

Products and Services

     IFX offers services in four basic portfolios: IFX Dedicated Connectivity,
IFX Dial-up, IFX Co-location, and IFX Web Hosting to small to medium-sized
businesses, multinational corporations, ISPs and telecommunications carriers
with operations and/or customers in Latin America.

     IFX Dedicated Connectivity

     .   International Private Line ("IPL"): Point-to-Point Time Division
         Multiplex ("TDM") physical connection for a customer's exclusive use.
         The customer defines protocol and service. This service can be used for
         convergence of voice, video, and data for customers who require the
         highest level of security.

     .   Private Asynchronous Transfer Mode ("ATM"): Permanent Virtual Circuit
         from customer premise to customer premise running ATM protocol. Use
         includes mission critical data or voice transmission for customers that
         want high speed fixed bandwidth at a lower price than an IPL.

     .   Premium IP: Premium IP service for access to the global Internet with
         guaranteed bandwidth on IFX's backbone and providing network monitoring
         reports to guarantee quality of service. This product is ideal for
         ISPs, telecommunications carriers, multinational companies or small and
         medium-sized businesses that have mission critical data or for the use
         of voice over IP ("VOIP").

     .   Dedicated IP: Basic IP services for access to the global Internet for
         companies needing basic Internet connectivity.

                                        5

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     IFX Dial-Up

     .   Wholesale Dial-up: Allows customers to utilize the dial-up connectivity
         resources of the IFX Dial-up Network on a wholesale basis. This product
         is ideal for ISP's, telecommunications carriers, and multinational
         companies who require local country dial-up access, multi-country
         dial-up access, global roaming dial-up access or Virtual Internet
         Service Provider ("VISP") services.

     .   Consumer Dial-Up: Service that enables end users to access the Internet
         utilizing various payment plans including unlimited monthly and yearly
         access as well as on-demand or by the minute Internet access.

     .   Corporate Dial-up: Unlimited roaming that enables end users to access
         the Internet or their corporate extranet while traveling.

     IFX Co-location

     .   Managed Co-location: Outsourcing the management and day-to-day
         operations at an IFX Data Center or POP. Provides reliable and scalable
         network management around the clock. Intended for use by
         telecommunications carriers, ISPs, and small to medium enterprises and
         multinational companies.

     .   Basic Co-location: Servers are maintained at an IFX Data Center or POP
         for bandwidth management and reliable connectivity to the Internet.
         Intended for customers needing space in Data Centers without remote
         hands-on support.

     IFX Web Hosting

              IFX offers web hosting products and services allowing customers to
         use IFX's web servers to maintain independent web sites. With web
         hosting, businesses can create a presence on the Internet, furthering
         their business, marketing and customer service campaigns. IFX's web
         hosting products and services include web site maintenance and ongoing
         consulting services by IFX.

     Although the Company's primary focus is to pursue multinationals, ISPs,
telecommunications carriers and small to medium-sized businesses in Latin
America, the Company continues to provide limited consumer Internet products and
services.

     Wholesale Access Service - Agreement with T1msn

              On March 15, 2002, IFX entered into a binding term sheet agreement
         to provide T1msn with Internet access services for its dial-up access
         service in Argentina and Chile, and potentially for other Latin
         American markets. T1msn is a joint venture between Microsoft Corp. and
         Telefonos de Mexico, S.A. de C.V. The access services include "free"
         Internet access in certain countries and fee-for-use Internet access in
         other jurisdictions, as well as technical support for those services.
         As of September 2002, IFX was providing service for T1msn end users in
         Argentina, Chile, El Salvador, Guatemala, Panama and Venezuela. Under
         the agreement, IFX and T1msn will share time-on-line revenues
         attributable to the access service provided to T1msn's end users. Also,
         under the terms of the agreement, IFX has provided a service level
         agreement committing to maintain its network to specified standards. If
         not otherwise extended, the term sheet will expire on October 31, 2002,
         if the parties have not entered into definitive transaction documents
         by that date. The Company currently anticipates that a definitive
         agreement will be reached by that date or that the expiration date of
         the term sheet will be extended. It is anticipated that the definitive
         agreement will have a term of one year from the effective date of such
         agreement, with elections for T1msn to renew for eight additional
         six-month periods.

              As part of its binding term sheet agreement with T1msn, IFX will
         grant to T1msn warrants potentially enabling T1msn to acquire up to 15%
         of the common stock of IFX (approximately 8.3 million warrants as of
         June 30, 2002, treating preferred shares on a "as converted" basis) if
         certain performance and contract renewal provisions are met by T1msn.
         Determination of the number of warrants would be made at the date of
         the definitive agreement. The definitive agreement may provide T1msn
         with additional cash bonus provisions instead of some or all of the
         warrants.

                                        6

<PAGE>

Competition

     The market for Internet access and value-added products and services has
become increasingly more competitive, especially in Latin America as Internet
usage has grown, and management expects that this trend will continue. While
Internet usage is lower in Latin America than in more mature markets such as the
United States, new entrants have been attracted by the large potential market
size.

     Though the Company's specific competitors vary from market to market, they
     include the following types of businesses:

     .   Internet services providers. Depending on the market, IFX's primary
         competitors may be small, local Internet service providers with limited
         ranges of service and geographic reach, or large international or
         regional service providers with broad service offerings, large network
         capacities and a wide geographic presence.

     .   Telecommunications companies. Many of the major international
         telecommunications companies offer Internet services in the same
         markets as IFX. Some telecommunications providers are subsidized or
         government owned. In several markets in which IFX Networks operates,
         former telecommunications monopolies have been deregulated and
         privatized, and have also become providers of Internet services. New
         telecommunication company entrants to these markets, which are
         beginning to use high-speed wireless technology to bypass overcrowded
         existing networks, are offering Internet and corporate data services as
         well. Generally, these network-based companies focus on consumer
         dial-up Internet access, large corporate accounts and customer bases
         that can generate high volume data traffic to carry on their networks.

     .   Cable television companies. Cable operators in some of the Company's
         markets have either introduced or announced that they intend to
         introduce Internet access services, both by upgrading their networks
         and using new, cable modem technology. The existing customers of these
         cable operators are primarily residential and their physical networks
         are largely limited to residential areas.

     Management believes that with adequate capital and funding, IFX can compete
effectively in the Latin American Internet market. Generating adequate capital
and funding levels is not assured and the Company's ability to continue
operations is challenged by its current shortage of financial resources. Any one
of the following developments in Latin America, among others, could materially
and adversely affect IFX's business, financial condition and results of
operations:

     .   Growth in the number or strength of strategic alliances among IFX's
         competitors continues;
     .   New platforms for Internet access arise from technological
         developments;
     .   An increased number of global and local companies enter in the markets
         in which the Company operates;
     .   Loss of users;
     .   Loss of market share;
     .   Price reductions and lower profit margins;
     .   Economic deterioration, including currency devaluation and/or currency
         controls;
     .   Political unrest or change;
     .   Lower advertising rates;
     .   Reduced Internet advertising; and
     .   Reduced page views.

     IFX faces competition on both a country-specific and region-wide level.
IFX's competitors may develop products and services that are better than the
products and services the Company offers or that may achieve greater market
acceptance. It is also possible that new competitors may emerge and acquire
significant market share. Some

                                       7

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of IFX's established competitors and potential new competitors may also have
better brand recognition and significantly greater financial, technical and
marketing resources than IFX.

Government Regulation

     To date, government regulations have not materially restricted the
Company's ability to offer Internet products and services in the Company's core
target countries. However, the legal and regulatory environment that pertains to
the Internet is uncertain and may change. New laws and regulations may be
adopted or existing laws may be applied to the Internet and e-commerce. New and
existing laws may cover issues like:

     .  Sales and other taxes;
     .  User privacy;
     .  Pricing controls;
     .  Characteristics and quality of products and services;
     .  Consumer protection;
     .  Cross-border restrictions;
     .  Foreign investment restrictions;
     .  Currency controls;
     .  Licensing requirements;
     .  Libel and defamation;
     .  Copyright, trademark and patent infringement;
     .  Pornography; and
     .  Nature and content of Internet materials.

     Legislation in these areas could slow the growth of Internet use and
decrease the acceptance of the Internet as a communications and commercial
medium. It may take years to determine how existing laws such as those governing
intellectual property, privacy, libel and taxation apply to the Internet. Any
new legislation or regulation regarding the Internet, or the application of
existing laws and regulations to the Internet, could have an adverse effect on
IFX's business.

     The growth of the Internet coupled with publicity regarding Internet fraud
can also lead to the enactment of more stringent consumer protection laws. These
laws may impose additional burdens on the Company's business.

Employees

     As of June 30, 2002, IFX employed 385 employees, excluding 79 employees in
the Central American Operations. IFX believes that its success is dependent in
part upon the Company's ability to attract and retain qualified, experienced
employees. IFX considers its relationship with its employees to be good.

     Labor laws in Latin America are generally more protective of employees than
in the United States. Most countries in Latin America have laws protecting
employees from being terminated without paying severance compensation in
established statutory amounts. In some Latin American countries, the law
establishes a minimum number of vacation days.

Intellectual Property and Proprietary Rights

     IFX relies on trademark and copyright laws, laws restricting unfair
competition, laws relating to trade secret protection and confidentiality and/or
license agreements with the Company's employees, customers, partners and others
to protect its intellectual property rights. Courts and legislatures in each
country continue to address the issues of the applicability and enforceability
of legal principles concerning intellectual property rights in an Internet
context, which remain substantially uncertain. Many of the countries in which
IFX operates have signed international treaties relating to the protection of
intellectual property. However, the courts in many of these countries have not
had the opportunity to address the legal issues within the Internet context to
the same degree as courts in the United States. Therefore, IFX cannot determine
whether the intellectual property of its non-U.S. operations will be subject to
a lesser or different degree of protection than that generally afforded in the
United States.

     The Company uses "IFX" as the primary business name for its operations. The
Company uses "IFX Networks" as a brand name for end products and services in
Latin America. In Latin America, the Company pursues the

                                       8

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registration of trademarks for marks that the Company believes are unique and
will be used by IFX over an extended period of time. IFX has initiated its
registration of the IFX Networks mark in most countries in Latin America.

     Where IFX has not registered its marks, competitors with senior rights in
marks similar to IFX's may be able to argue successfully that IFX should be
barred from continuing to use the IFX Networks mark, or competitors may adopt
product or service names similar to IFX's, thereby impeding IFX's ability to
build brand identity, which could lead to customer confusion. It is also
difficult and expensive to defend trademark infringement litigation and to
prevent the unauthorized use of marks.

                 DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

     The directors and executive officers of the Company and their ages as of
September 15, 2002 are as follows:

      Name                        Age     Office
      ------------------------ ---------  --------------------------------------

      Joel M. Eidelstein          35      Chairman of the Board and President
      Michael Shalom              31      Chief Executive Officer and Director
      Jose Leiman                 42      General Counsel
      Howard F. Zuckerman         58      Chief Financial Officer
      Richard C. Capone           59      Director
      Mark O. Lama                40      Director
      Burton J. Meyer             54      Director
      George Duarte               42      Director
      Patrick Delhougne           38      Director


     Joel M. Eidelstein has served as a director of the Company since November
1990 and since November 9, 1996 he has served as the President of the Company.
Mr. Eidelstein graduated from Brandeis University in May 1988 and was an
independent commodity futures trader and a floor manager with Index Futures
Group, Inc. from June 1988 until June 1996.

     Michael Shalom was elected as IFX's Chief Executive Officer on September 8,
1999 and has served as a director of IFX since November 1998. Prior to July
1999, Mr. Shalom was a principal of, and was actively involved in the management
of the INTCOMEX group of companies, which is a Latin American wholesale
distributor of microcomputers, networking products, mass storage products,
multimedia products, computer peripheral equipment and computer components. Mr.
Shalom remains an affiliate of INTCOMEX. Mr. Shalom is also a principal of
International Technology Investments ("ITI").

     Jose Leiman served as Chief Financial Officer of the Company from July 1,
1999 until July 31, 2002. From December 2001 he has also served as IFX's general
counsel. From March 1996 to June 1999, Mr. Leiman was with Ernst & Young LLP, an
international accounting firm. Prior to joining Ernst & Young LLP, Mr. Leiman
was an attorney with Dewey Ballantine LLP, an international law firm. Mr. Leiman
has also worked as a Certified Public Accountant ("CPA") with Price Waterhouse
LLP. Mr. Leiman holds J.D. (magna cum laude and order of the coif) and L.L.M.
degrees from Georgetown University Law Center in Washington, D.C. and a B.B.A.
degree with high honors from Florida International University. Mr. Leiman is
admitted to practice law in Florida and Washington, D.C., and is also a
Certified Management Accountant and a CPA.

     Howard F. Zuckerman was appointed Chief Financial Officer of IFX on August
1, 2002. Prior to joining IFX, Mr. Zuckerman was a partner with the Washington,
D.C. office of Tatum CFO Partners, LLP. From July 2000 to July 2001, Mr.
Zuckerman served as Chief Financial Officer of ARBROS Communications, Inc., a
private integrated provider of telecommunications services to small and
medium-sized businesses. From 1984 to 2000, Mr. Zuckerman held executive
financial management positions with various subsidiaries and divisions of
Verizon (formerly Bell Atlantic), including domestic and international
positions. He was the Chief Financial Officer and a Director of Grupo Iusacell
(a public, wireless company based in Mexico City) from 1996 to 2000. From 1975
to 1984, he was employed by Squibb Corporation where he was named an Assistant
Corporate Controller in July 1982. He began his career with the New York office
of Arthur Andersen LLP, in 1970. Mr. Zuckerman has an MBA degree in finance and
accounting from the University of Chicago and a B.S. degree from Cornell
University.

                                       9

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     Richard C. Capone was appointed to the board of directors of IFX in June
2002 to replace Charles W. Moore who resigned from the Board in June 2002. Mr.
Capone retired from UBS AG in June 2000 and accepted a partnership position in
UBS Capital Americas LLP, the private equity affiliate of UBS. Prior to his
retirement, Mr. Capone had regional management responsibility for UBS AG's
operations in the United States, Canada and Latin America, and was a member of
the firm's Group Managing Board. He was also CEO of Warburg Dillon Read LLC, the
investment banking subsidiary of UBS AG in the Americas. In addition, Mr. Capone
was vice chairman of the Board of Directors of the Institute of International
Bankers; a member of the Board of Directors of the Securities Industry
Association; a partner of the New York City Partnership and Chamber of Commerce;
a member of the Board of Directors of SACIA, The Business Council of
Southwestern Connecticut; and a director of the American Swiss Foundation. UBS
AG was formed on June 29, 1998, following the completion of the merger of Union
Bank of Switzerland ("UBS") and Swiss Bank Corporation. Mr. Capone first joined
UBS in 1978.

     Patrick Delhougne is an executive director at Russell Reynolds Associates,
a retained executive search firm. Before starting his career in executive
search, Mr. Delhougne was an equity sales associate and analyst for J.P. Morgan
in London and New York. Previously, he was a case team leader with Bain & Co. in
Munich, Germany, responsible for managing strategy consulting projects. Mr.
Delhougne began his career with Siemens PLC in London, working as the assistant
to the chief executive officer. He was subsequently promoted to corporate
planner in the regional strategy group, working with the board of directors at
Siemens AG in Munich. He also worked for the Siemens Transportation Group in
Erlangen as a commercial manager. Mr. Delhougne earned a B.B.A degree from the
U.S. International University - Europe (Summa Cum Laude), a postgraduate diploma
from the London School of Economics, and an M.B.A. from the Harvard Graduate
School of Business Administration, which he attended on the Werner von Siemens
Scholarship.

     Mark O. Lama was elected to the IFX board of directors in June 2000. Mr.
Lama is a principal of UBS Capital Americas, which manages $1.5 billion in
private equity commitments dedicated to investments in North and South America,
including investments in the telecommunications, software, and Internet sectors.
Prior to joining UBS Capital Americas in 1998, he worked in the U.S. and Latin
America groups of Chase Capital Partners (a private equity firm), the Banking
and Corporate Finance Group of Chemical Bank and the Emerging Markets group at
Salomon Brothers, Inc. Mr. Lama holds an M.B.A. from Harvard Graduate School of
Business Aministration, a B.S. from Columbia University and a B.A. from Colgate
University.

     Burton J. Meyer has served as a director of the Company since May 1999. Mr.
Meyer previously served as director of the Company from August 1986 until July
1, 1996 and as President of the Company from July 1987 until July 1, 1996. Mr.
Meyer served as Executive Vice President of E.D. & F. Man International, an
international futures and conglomerate brokerage, from July 1996 to June 30,
2000.

     George Duarte was elected to the board of directors of IFX in June 2002. He
is a partner of UBS Capital Americas, which manages in excess of $1.5 billion
in private equity commitments dedicated to investments primarily in the United
States, including investments in telecommunications, software and general and
industrial businesses. Prior to joining UBS Capital Americas in 1992, Mr. Duarte
worked in Citibank, N.A. as Senior Banker in its World Corporate Group between
1990 and 1992, and prior to that at Manufacturers Hanover Trust Company as a
Vice President in its Leveraged Finance Group (1981-1990). In addition, Mr.
Duarte has been a director of Tutopia since August 2000, and Internet Group
(Cayman) Limited since November 2001. Mr. Duarte holds a B.S. in Business
Administration from Georgetown University.

     Directors are elected and serve until the next annual meeting or until
their successors are elected and qualified. Officers are elected annually by the
Board of Directors.

     Under the terms of the Certificates of Designation for the Company's
Convertible Preferred Stock and the Fourth Amended and Restated Stockholders'
Agreement dated as of June 28, 2002, among IFX, UBS Capital, International
Technology Investments, LC, ("ITI"), Joel Eidelstein (IFX's Chairman of the
Board and President), Michael Shalom (IFX's Chief Executive Officer), LSC, LLC,
Jak Burzstyn and Lee S. Casty ("Casty") (the "Fourth Stockholders' Agreement"),
UBS Capital is entitled to appoint four out of seven members of the Company's
Board of Directors. UBS Capital also has the right to jointly designate a fifth
director in conjunction with ITI and Casty. Casty and ITI each have the right to
appoint one director.

     On June 20, 2002, Charles Delaney and Charles W. Moore, who served as two
of the four members of IFX's Board of Directors selected by the holders of IFX's
Convertible Preferred Stock pursuant to IFX's Restated Certificate of
Incorporation, were replaced on IFX's Board of Directors by Richard Capone and
George Duarte, both partners in UBS Capital Americas.

                                       10

<PAGE>

ITEM 2.  PROPERTIES

     The Company's corporate headquarters are located at 15050 N.W. 79th Court,
Miami Lakes, Florida, 33016. The corporate headquarters includes the Company's
offices for coordinating and supporting IFX's Latin American operations and is
located in approximately 12,500 square feet of office space under a lease that
expires on January 31, 2004. In addition, IFX houses part of its network
infrastructure in a state-of-the-art Network Access Point co-location facility
located in Miami, Florida. IFX also utilizes a secondary third-party co-location
facility in Miami, Florida.

     The Company also leases offices in 12 Latin America countries, including 5
offices in the Central American Operations, that are used for general
operations, as sales offices and for equipment co-location.

ITEM 3.  LEGAL PROCEEDINGS

     On February 28, 2002, IFX do Brazil Ltda. ("IFX Brazil") filed a lawsuit
against IBM Leasing Brazil ("ILB") in the 11th Civil Court, Sao Paulo, Brazil
requesting the modification of IFX Brazil's equipment lease agreement with ILB.
The basis for the complaint by IFX Brazil was that the leased equipment was
delivered late by ILB. The complaint also stated that the denomination of the
lease in U.S. dollars resulted in an excessive exchange rate variation in breach
of the Brazilian consumption law. The object of this suit was to obtain
reduction of the contract value from approximately $568,600 to approximately
$189,500 for the return of unused equipment and compensation for installments
already paid.

     On August 18, 2002, the court denied IFX Brazil's claim and ordered IFX
Brazil to pay attorney's fees of approximately $21,700. IFX Brazil appealed the
verdict on September 3, 2002 and ILB responded to such appeal on September 30,
2002. No verdict on the appeal has been reached. On September 24, 2002, IFX
Brazil was granted an injunction to prevent ILB from registering a complaint in
Brazil that IFX Brazil was in default on the lease until there is a final
decision on the appeal. Such injunction is subject to ILB response, which is
expected by October 31, 2002.

     On June 3, 2002, ILB demanded payment of $939,200 from IFX under the
Continuing Contract of Parent Guaranty of Payment dated September 29, 2000
between IFX and ILB. IFX has not responded to this demand pending resolution of
the lawsuit in Brazil. There can be no assurances as to the outcome of this
litigation. Based on the advice of legal counsel, the Company has recorded
certain accruals to provide for this contingency.

     In addition, the Company is a defendant in, and may be threatened with,
various legal proceedings arising from its regular business activities.
Management, after consultation with legal counsel, is of the opinion that the
ultimate liability, if any, resulting from any pending action or proceedings
will not have a material effect on the financial position or results of
operations of the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year ended June 30, 2002.

                                       11

<PAGE>

                                     PART II

ITEM 5.  MARKET FOR IFX CORPORATION'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

     IFX's stock is traded on the NASDAQ SmallCap Market under the symbol
"FUTR." On February 14, 2002, the NASDAQ Staff notified the Company that the bid
price of its common stock had closed at less than $1.00 per share over the
previous 30 consecutive trading days and, as a result, did not comply with
Marketplace Rule 4310 (c) (4) (the "Price Rule"). In accordance with Marketplace
Rule 4310 (c) (8) (D), the Company was provided 180 calendar days, or until
August 13, 2002, to regain compliance with the Price Rule.

     On February 21, 2002, the NASDAQ Staff notified the Company that it did not
comply with Marketplace Rule 4310 (c)(2)(B) (the "Capital Rule"), which requires
a minimum of $2.0 million in net tangible assets, $2.5 million in stockholders'
equity, $35.0 million of market capitalization or $500,000 net income for the
most recently completed fiscal year or two of the three of a company's most
recently completed fiscal years. On May 9, 2002, the Company received a waiver
of certain terms of the Company's Certificates of Designation from the preferred
stockholders that resulted in the Company's preferred stock, which had been
stated as outside of Stockholders' Equity, to be reclassified as part of
Stockholders' Equity. On May 17, 2002, NASDAQ advised the Company that it was in
compliance with the Capital Rule.

     On August 14, 2002, the NASDAQ Staff advised the Company that while it had
not regained compliance in accordance with Marketplace Rule 4310 (c) (8) (D),
the staff noted that the Company did meet the initial listing requirements for
$5.0 million of stockholders' equity (based on pro forma stockholders' equity as
reported in the Company's Form 10-Q for the quarter ended March 31, 2002).
Hence, the Company was provided with an additional 180 days, or until February
10, 2003, to regain compliance with the applicable requirements. If the shares
of the Company's common stock were to be suspended or delisted from the NASDAQ
system, it would be much more difficult to dispose of the common stock or obtain
accurate quotations as to the price of the securities. This, in turn, could make
it more difficult for the Company to issue securities pursuant to debt or equity
offerings in the future.

     At June 30 and September 30, 2002, the Company's common stock was trading
below the NASDAQ's $1.00 per share listing price and, at June 30 and September
30, 2002, the Company did not meet NASDAQ's initial minimum stockholders' equity
Cequirement of $5.0 million. These conditions may result in the Company's common
stock being delisted from the NASDAQ.

     Set forth below is the range of high and low trade prices per share of the
Company's common stock in the NASDAQ SmallCap Market as reported by NASDAQ for
the periods indicated. These trade prices do not include retail markups,
markdowns, or commissions.

                                       Fiscal year ended June 30,
                        --------------------------------------------------------
                              2002              2001                2000
                        ----------------  ----------------  --------------------
                          High     Low      High     Low      High        Low
                        -------- -------  -------- -------  --------   ---------

First quarter             $1.92   $0.57    $13.13   $5.50    $ 24.38    $ 14.88
Second quarter            $0.95   $0.52    $ 7.31   $1.78    $ 34.75    $ 16.13
Third quarter             $0.95   $0.60    $ 5.25   $2.03    $ 37.94    $ 27.25
Fourth quarter            $1.15   $0.78    $ 2.66   $1.49    $ 35.00    $ 11.25

     As of September 30, 2002, there were approximately 440 holders of record
and 1,468 beneficial owners of the Company's common stock.

     The Company has not paid a cash dividend on its common stock and does not
expect to pay a cash dividend in the foreseeable future.

                                       12

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

       The selected financial data for the five fiscal years presented below is
derived from the audited consolidated financial statements of the Company. The
data should be read in conjunction with the other financial information included
herein, including "Management's Discussion and Analysis of Financial Condition
and Results of Operations," the consolidated financial statements and related
notes thereto.

<TABLE>
<CAPTION>
                                                                        Fiscal year ended June 30,
                                           ----------------------------------------------------------------------------------
                                               2002              2001              2000              1999            1998
                                           ------------      ------------      ------------      ------------    ------------
                                                            (in thousands, except share and per share amounts)
                                           ----------------------------------------------------------------------------------
<S>                                        <C>               <C>               <C>              <C>             <C>
   Statement of Operations Data:

Total revenues                             $     28,151      $     32,122      $     10,689      $        725               -
Operating loss from continuing
  operations                                    (30,582)          (54,416)          (38,673)           (2,931)           (733)
Basic and diluted loss per share
  from continuing operations               $      (1.89)     $      (4.44)     $      (4.71)     $      (0.26)   $      (0.03)
Weighted average common shares
  outstanding                                13,736,495        13,784,897        10,153,565         6,498,204       6,246,545
</TABLE>

<TABLE>
<CAPTION>
                                                                                At June 30,
                                           ----------------------------------------------------------------------------------
                                               2002              2001              2000              1999            1998
                                           ------------      ------------      ------------      ------------    ------------
                                                                              (in thousands)
                                           ----------------------------------------------------------------------------------
<S>                                        <C>               <C>               <C>              <C>             <C>
    Balance Sheet Data:

Working capital (deficit)                  $    (10,100)     $    (11,580)     $      3,480      $      7,221    $     10,564
Total assets                                     17,935            48,524            61,297            18,862          11,543
Capital-lease obligations                         2,298            16,068            10,968                 -               -
Long-term debt (excluding current
   portion and capital-lease
   obligations)                                     348               296               375               317               -

Stockholders' equity                       $      1,445      $     10,421      $     32,543      $     16,097    $     11,335
</TABLE>

                                       13

<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Basis of Presentation

     The following discussion should be read in conjunction with the Company's
consolidated financial statements and notes thereto included elsewhere herein.
This discussion and analysis reflects the adjustments made to segregate the
Company's discontinued operations (see Note 3 of notes to the consolidated
financial statements) and the restatement in fiscal 2001 of the Company's
financial statements as a result of the deconsolidation of Tutopia.com, Inc.
("Tutopia") (as of September 30, 2002, IFX has an approximate 44% ownership
interest in Tutopia - assuming the conversion of all outstanding Tutopia
preferred stock into common stock. See Note 16 of notes to the consolidated
financial statements).

Critical Accounting Policies and Estimates

     The preparation of financial statements in accordance with generally
accepted accounting principles in the United States requires IFX to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. To the extent there are
material differences between the Company's estimates and the actual results,
IFX's future results of operations may be affected. Management believes the
following critical accounting policies require the Company to make significant
judgments and estimates in the preparation of its consolidated financial
statements:

     .    Revenue recognition;
     .    Impairment of long-lived assets; and
     .    Investments.

Revenue Recognition

     The Company recognizes revenue when each of the following criteria is met;
     .    Persuasive evidence of an arrangement exists,
     .    Delivery has occurred or services have been rendered,
     .    The seller's price to the buyer is fixed or determinable, and
     .    Collectibility is reasonably assured.

     Revenue is recognized on the majority of the services offered by the
Company as its customers utilize such services. Generally, the Company's sales
transactions are not multi-element and do not subject the Company to significant
credit risk; thus management is reasonably assured of collection at the time the
services are utilized by the customer. The Company's services are generally
fixed price. In addition, when services require a contract, revenue is not
recognized until such contract has been executed and is enforceable. Revenues
related to sales to Tutopia are generally not recognized until collection is
reasonably assured because of the insufficiency of Tutopia's cash flows.

Impairment of Long-Lived Assets

     The Company reviews its long-lived assets for impairment in accordance with
SFAS No. 144. If indicators are present, the Company computes the related
impairment based on the difference between the carrying value of an asset and
the estimated cash flows to be received over the remaining useful life of the
respective asset or related group of assets. Cash flows are determined based
upon management's projections of operating performance and are consistent with
those utilized in obtaining funding. In determining the amount of impairment
during fiscal 2002, the Company projected operating cash flows of approximately
$1.6 million in fiscal 2003 and approximately $9.8 million in fiscal 2004. If
management's revenue and cost reduction projections are not met, the Company may
incur additional impairments of long-lived assets in the future.

Impairment of Investments

     The Company periodically reviews its investments for indications of
impairment such as, recent security sales, deterioration of financial condition,
near-term prospects for financial improvement and other relevant factors. During
fiscal 2002, the Company recorded an impairment of approximately $1.7 million of
its investment in Tutopia. Tutopia is not a publicly traded company; therefore,
the recoverability of Tutopia was based upon a recent transaction whereby UBS
(the majority shareholder of both Tutopia and the Company) purchased preferred
stock similar to that owned by the Company at a price significantly lower than
the carrying value of the Company's investment in Tutopia. This lower price
reflected with the declining financial performance of Tutopia, as well as the
overall market trends in the value of companies with Internet-related operations
in Latin America. The Company did not utilize an independent appraisal to value
its investment in Tutopia.

Going Concern

     The Company's working capital deficit decreased by $1.5 million to a $10.1
million deficit at June 30, 2002 from an $11.6 million deficit at June 30, 2001.
The Company's available cash remains at a level that substantially
limits the Company's operations. Although the Company raised $12.0 million
through the sale of convertible preferred stock during fiscal 2002, the Company
continues to incur losses and operating cash flow deficiencies. The Company has
experienced operating losses amounting to $30.6 million, $54.4 million and $38.7
million and negative cash flows from operations of $12.7 million, $15.0 million
and $15.8 million for the years ended June 30, 2002, 2001 and 2000,
respectively. As a result, the Company must obtain substantial additional
capital to sustain its operations. The Company is dependent upon capital from
outside sources, including existing shareholders, to fund its operations and
meet ongoing commitments and obligations. There can be no assurance that such
capital will be available to the Company on acceptable terms, or at all.

     The Company is taking actions to improve cash flow, including: (1) reducing
the scope of, selling or otherwise disposing of certain operations that require
cash (e.g., Central American operations); (2) selling equipment and other assets
that will generate cash in the short term and (3) decreasing its overhead and
personnel costs in the United States and, selectively, in its Latin American
operating units. Although the Company has made significant reductions in
personnel and overhead costs to reduce the operating losses, additional
reductions in personnel may have to be made in the near term. The Company also
believes that additional cost savings can be generated by combining its
operations with those of Tutopia in certain countries in which both entities
operate. In general, cash needs will also be affected by whether Tutopia is able
to fulfill its payment obligations under its network agreement with IFX.

     In September 2002, the Company received $1.1 million from ROF/IFX, LLC in
exchange for a 10% promissory note due June 30, 2003, that is convertible into
shares of either Series D or new preferred stock at the option of the note
holder.

     The Company is in the process of seeking additional capital from UBS
Capital Americas III, L.P. and UBS Capital LLC, which own approximately 63% of
the Company's common stock on an "as converted" basis and have the right to
appoint a majority of the members of the Board of Directors. Additional funding
from UBS Capital, if any, may be in the form of debt instruments convertible
into equity. The negotiations relating to the additional funding, the amount and
terms of such funding, if any, have not been completed.

     No assurance can be given that the Company will be successful in obtaining
additional capital from UBS or other sources, or that such capital will be
available on terms acceptable to the Company. There is no guarantee that
projected decreases in expenses will be sufficient to ensure the continued
viability of the Company or that such decreases will not affect the Company's
customer service levels or ability to generate revenues. Further, there can be
no assurance that even if such capital is obtained and such cost reductions are
made, that the Company will achieve profitability or positive cash flows. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. The consolidated financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of this uncertainty.

                                       14

<PAGE>

Analytical Summary of Consolidated Statements of Operations

     The following table sets forth, for the fiscal years indicated, the
percentage of total revenues represented by certain items in the Company's
consolidated statements of operations:

<TABLE>
<CAPTION>
                                                                               Fiscal year ended June 30,
                                                                               --------------------------
                                                                        2002               2001               2000
                                                                    ------------       -------------      -------------
        <S>                                                         <C>                <C>                <C>
        Revenues:

           Dedicated line services                                          51.4  %             22.4 %             12.6 %

           Dial-up services                                                 13.2                22.3               77.3

           Web hosting and design services                                   4.1                 4.0                3.5

           Sales to related party                                           25.6                43.1                 --

           Other                                                             5.7                 8.2                6.6
                                                                    ------------       -------------      -------------

                  Total Revenues                                           100.0               100.0              100.0

        Cost of revenues                                                    55.3                64.7               79.4
                                                                    ------------       -------------      -------------

        Gross profit                                                        44.7                35.3               20.6

        Operating Expenses:

        General and administrative                                          95.6               106.4              286.0

        Sales and marketing                                                  5.4                11.0               21.1

        Depreciation and amortization                                       40.8                53.2               75.3

        Impairment of long-lived assets                                     11.5                34.0                 --
                                                                    ------------       -------------      -------------

           Total operating expenses                                        153.3               204.6              382.4
                                                                    ------------       -------------      -------------
        Operating loss from continuing operations                         (108.6)             (169.3)            (361.8)

           Total other income (expense), net                                13.3               (25.8)            (111.7)
                                                                    ------------       -------------      -------------
        Loss from continuing operations before income tax benefit          (95.3)             (195.1)            (473.5)

        Income tax benefit                                                   2.8                 4.8               25.9
                                                                    ------------       -------------      -------------

           Loss from continuing operations                                 (92.5)             (190.3)            (447.6)

        Income from discontinued operations, net of income taxes             5.1                 8.8               18.4
                                                                    ------------       -------------      -------------

             Net loss                                                      (87.4) %           (181.5) %          (429.2) %
                                                                    ============       =============      =============
</TABLE>

CONTINUING OPERATIONS

     Subsequent to June 30, 2002, the Company decided to initiate plans to sell
or otherwise dispose of substantially all of its operations in Central America.
As of June 30, 2002, generally accepted accounting principles do not require
that this segment be treated as a discontinued operation in the consolidated
financial statements for the year ended June 30, 2002. Hence, the assets,
liabilities and results of operations of this segment have not been segregated
or otherwise separately identified in the consolidated financial statements of
the Company. For the year ended June 30, 2002, the revenues and loss from
continuing operations before income taxes of the three operations in Central
America that the Company is planning to sell were $1.8 million and $0.7 million,
respectively. At June 30, 2002, the total assets of these operations were $0.7
million.

Revenues

     Management plans to grow IFX's customer base and revenues primarily by
marketing Internet access and value-added services to ISPs, multinationals,
telecommunications carriers and small to medium-sized businesses in the markets
in which the Company operates and, to a lesser extent, to individual consumers.
Accordingly, management expects that revenue from value-added services (such as
dedicated line and web hosting and design services) will increase faster than
revenue from Internet access services. IFX's current customer and revenue mix is
not expected to be fully indicative of the Company's future customer and revenue
mix.

                                       15

<PAGE>

     The cash flows associated with the Company's acquired customer base
represent revenues generated from IFX's paid dial-up Internet access line of
business (included in "other revenues"). While that line of business continued
to generate revenues of $3.7 million during the year ended June 30, 2002, those
revenues are decreasing in absolute terms and as a percentage of the Company's
total revenues. The Company's primary focus has changed from targeting paid
consumer dial-up account customers to targeting small and medium-sized
businesses seeking to gain access to the Internet using a dedicated Internet
access line.

     IFX provides Internet access services to customers under contracts that
typically range from one month for dial-up access services to one year or more
for dedicated access services.

     IFX also derives revenues by providing wholesale Internet access to
businesses that resell such access on a branded or private label basis. Fees for
wholesale access are generally billed on a monthly basis after services are
rendered. Wholesale access customers are billed on either a per port basis or a
per hour basis. Wholesale Internet access service revenues are recognized in the
period in which the services are provided.

     Revenues from value-added Internet services come from web hosting, domain
name registration and co-location services. These revenues are recognized in the
period in which the services are provided.

     Internet access charges and fees for value-added services vary among the
countries in which IFX does business, depending on competition, economic and
regulatory environments and other market factors. In some markets, the Company
has reduced prices, such as for access services, as a result of competitive
pressure. The Company expects that price reductions will continue in the markets
in which IFX operates as the supply of Internet services continues to grow.

     The period-to-period comparisons of our results of operations reflect
acquisitions that were made during the applicable period. Results of operations
from acquisitions effected during a period have been included from the time of
the closing of the acquisition. The Company has not consummated any significant
acquisitions since fiscal 2000.

     For the fiscal year ended June 30, 2002, total revenues declined to $28.2
million from $32.1 million, a decrease of $3.9 million, or 12.1%, from fiscal
year 2001. Revenues resulting from dedicated line services increased by $7.3
million to $14.5 million in fiscal year 2002 compared with fiscal year 2001 as a
result of the Company's increased focus on corporate clients. Sales to related
party (Tutopia) declined by $6.6 million in fiscal 2002 primarily because of a
reduction in the charges by IFX for wholesale connectivity access of
approximately $0.4 million per month. Revenues relating to dial-up services
decreased 48.4% in fiscal 2002 to $3.7 million from $7.2 million in fiscal 2001,
an expected decline as the Company continues to pursue its strategy of focusing
on business clients and not individual dial-up consumers. Other revenues, which
consist primarily of amounts earned from co-location services, equipment rental
and earnings from revenue-sharing agreements with telecommunications carriers,
decreased $1.0 million to $1.6 million in fiscal 2002 as compared with fiscal
2001.

     Revenues increased to $32.1 million for the year ended June 30, 2001
compared with $10.7 million for the year ended June 30, 2000. The increase in
revenues was related to: (a) sales of $13.8 million of connectivity and other
services to Tutopia, a related party and (b) expansion of the user base
resulting from acquisitions in Latin America and the growth in value-added
services such as dedicated access.

Cost of Revenues

     IFX's cost of revenues primarily consists of costs incurred to carry
customer traffic to and over the Internet. IFX leases lines that connect the
Company's POPs to IFX's national hubs. The Company pays third party network
providers for transit that allows IFX to transmit the Company's customers'
information to or from the Internet. IFX also has other recurring
telecommunications costs, including the cost of local telephone lines that
customers use to reach IFX's network POPs and access the Company's services, and
trans-oceanic fiber and satellite bandwidth costs to connect the national hubs
to the Internet backbone through IFX's Miami facilities. Management expects
total operating costs from providing Internet services to increase as capacity
is increased to meet customer demand. The Company expects that costs of revenues
should decline as a percentage of revenues as the Company expands its network
facilities under long-term leases and as competition drives down the overall
price of such services. Management also expects cost of revenues to decrease as
wireless technology usage expands and the telecommunication markets in Latin
America deregulate.

     Gross profit increased to 44.7% of total revenues for the fiscal year ended
June 30, 2002 as compared with 35.3% of total revenues for the fiscal year ended
June 30, 2001. Gross margin increased to 35.3% for the fiscal year ended June
30, 2001 as compared with 20.6% for the fiscal year ended June 30, 2000. The
increase in gross margin in each year results from management's continued
efforts to reduce cost of revenues by increasing efficiencies of the Company's
use of its network equipment, as well as solidifying IFX's owned network
throughout Latin America, resulting in the reduction of third party costs.

                                       16

<PAGE>

General and Administrative Expenses

     General and administrative expenses are comprised primarily of compensation
costs, which include salaries and related benefits, commissions, bonuses and
non-cash stock-based compensation. Other general and administrative expenses
include costs of travel, rent, utilities, telecommunications services, insurance
and professional fees. While management expects that general and administrative
expenses will increase proportionately with IFX's growth, specific actions are
being taken by management in efforts to reduce personnel and other overhead
costs.

     General and administrative expenses decreased 21.3% to $26.9 million for
the fiscal year ended June 30, 2002 as compared with $34.2 million for the
fiscal year ended June 30, 2001. The decrease is primarily from cost reduction
programs initiated during fiscal 2002, despite the growth needed to support the
increase in "core" product revenues during fiscal 2002. As a percentage of total
revenues, general and administrative expenses decreased 10.8 percentage points
to 95.6% in fiscal 2002 from 106.4% in fiscal 2001.

     General and administrative expenses increased to $34.2 million for fiscal
year 2001 as compared with $30.6 million for fiscal year 2000. The increase was
primarily due to costs incurred to support the increase in sales during fiscal
2001. As a percentage of total revenues, general and administrative expenses
decreased 179.6 percentage points to 106.4% in fiscal 2001 from 286.0% in fiscal
2000 as a result of management's cost reduction efforts.

     General and administrative expenses include $4.1 million, $7.2 million and
$6.4 million, respectively, of non-cash stock based compensation in fiscal years
2002, 2001 and 2000, respectively.

Sales and Marketing

     Sales and marketing expenses consist primarily of advertising costs,
distribution costs and related production costs. Sales and marketing expenses
decreased $2.0 million to $1.5 million for the fiscal year ended June 30, 2002
as compared with $3.5 million for the fiscal year ended June 30, 2001 as
management focused on generating dedicated connectivity revenues requiring
significantly lower marketing and selling costs. As a percentage of total
revenues, sales and marketing expense decreased 5.6 percentage points to 5.4% in
fiscal 2002 from 11.0% in fiscal 2001 as a result of the Company's marketing
expenditures decreasing at a much faster pace than sales.

     Sales and marketing expenses increased $1.2 million to $3.5 million for
fiscal year 2001 as compared with $2.3 million for fiscal year 2000. The
increase was primarily due to costs incurred to support the increase in sales
during fiscal 2001. As a percentage of total revenues, sales and marketing
expenses decreased 10.1 percentage points to 11.0% in fiscal 2001 from 21.1% in
fiscal 2000 as a result of sales growing at a much faster pace than the
Company's marketing expenditures.

Depreciation and Amortization

     A large component of the Company's depreciation and amortization expense in
the three fiscal years ended June 30, 2002 is related to the amortization of the
acquired customer base, which is amortized over three years using the
straight-line method. The acquired customer base results from the allocation of
the price paid to acquire entities in fiscal years 2000 and 1999 that was in
excess of the fair value of their net tangible assets. The Company expects the
remaining capitalized cost of the acquired customer base as of June 30, 2002 to
be fully amortized by December 31, 2002.

     Depreciation expense is primarily related to telecommunications equipment,
computers and network infrastructure. Assets are depreciated over their
estimated useful lives, which generally range from three to five years.

     Depreciation and amortization expense decreased $5.6 million to $11.5
million for the year ended June 30, 2002 from $17.1 million for the year ended
June 30, 2001. The reduction in depreciation and amortization expense is
primarily due to the reduction in carrying value of assets under capitalized
leases and to the impairment of $10.9 million of acquired customer base during
fiscal 2001 as further discussed below.

     Depreciation and amortization expense increased $9.0 million to $17.1
million for the year ended June 30, 2001 from $8.1 million during the year ended
June 30, 2000. The increase in depreciation and amortization was a direct result
of increases in acquired computer equipment and assets under capital leases that
primarily consisted of computer and network-related equipment. Such assets were
purchased to support the increased levels of operations and anticipated future
growth of the Company.

                                       17

<PAGE>

Impairment of Long-Lived Assets

     At June 30, 2002, the Company estimated that the undiscounted cash flows
associated with certain of its long-lived assets, including acquired customer
base and property and equipment, may not be sufficient to recover the net book
value of such assets. In accordance with Statement of Financial Accounting
Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets," during 2002, the Company recorded estimated charges of
approximately $0.8 million and $2.4 million related to the impairment of the
acquired customer base and property and equipment, respectively. A $10.9 million
impairment charge was taken in fiscal 2001 as a result of an analysis of the
Company's acquired customer base at June 30, 2001. The impairment charges were
recorded to reduce long-lived assets to their estimated fair value. Fair value
was determined based on the present value of the future cash flows expected to
be derived from the underlying assets. The fair value estimates, as required by
SFAS No. 144, did not consider the value of such assets in a forced sale or
liquidation and were based primarily on an analysis of the related operations
discounted net cash flows.

Contract Cancellation Costs

     Contract cancellation costs are included in general and administrative
expenses in the consolidated statements of operations. During fiscal 2000, IFX
recorded a one-time charge to operations of $4.9 million relating to the
cancellation of certain contracts. The charge included $1.7 million related to
Tutopia. The acceleration and settlement of certain consulting agreements were
paid in shares of IFX common stock.

Other Income (Expense)

     IFX earns interest income primarily by investing available cash in
short-term securities. The Company incurs interest expense primarily as a result
of lease financing transactions.

     During fiscal 2002, the Company reported $3.8 million of other income,
compared with other expense of $8.3 million during fiscal 2001. Other income
includes gains from extinguishment of debt of $4.3 million (see below),
realization of the deferred gain on the sale of the Yupi investment of $4.4
million and a gain on the sale of a subsidiary of $0.5 million, offset by
interest expense of $2.1 million, the $1.7 million impairment of the Company's
investment in Tutopia and the Company's share of losses resulting from its
equity investment in Tutopia. Other expense in fiscal 2001 was primarily
attributable to the Company's $3.2 million share of Tutopia's losses. The
Company incurred interest expense of $1.9 million, realized a loss on
investments of $2.5 million and incurred a fee of $0.7 million related to the
sale of preferred stock during fiscal 2001.

Gain from Early Extinguishment of Debt

     During fiscal 2002, the Company and one of its lessors agreed to the
extinguishment of approximately $8.7 million in capital lease obligations in
exchange for the Company's payment to the lessor of approximately $2 million and
500,000 warrants allowing the lessor to purchase shares of the Company's common
stock at $1.00 per share, subject to certain anti-dilution adjustments. The
warrants vested immediately, are exercisable at $1.00 per share and expire 10
years from the date of grant. As a result of this transaction, the Company
recorded a $4.3 million gain resulting from the early extinguishment of debt,
which is reported as other income in the consolidated statement of operations.
The gain was computed as the net $8.7 million reduction of lease obligations,
less the estimated fair value of the warrants granted to the lessor, the cash
paid and an adjustment to the carrying value of the related assets. The fair
value of the warrants was estimated using the Black-Scholes option valuation
model.

Commitments

     The Company also has numerous commitments, contingencies and related party
transactions. Such items are discussed and disclosed in Notes 7, 8, 9, 15, 17,
and 19 of notes to consolidated financial statements.

Preferred Stock and Deemed Dividends to Preferred Shareholders

     On June 28, 2002, the Company sold 6,432,608 shares of Series D Convertible
Preferred Stock ("Series D Preferred Stock"). The consideration received in
exchange for the Series D Preferred Stock totaled approximately $6.9 million
(or, $1.07 per share of Series D Preferred Stock), which consisted of cash ($5.0
million), 750,000 shares of IFX Series C Preferred stock (valued at
approximately $1.3 million), which had an effective price per share of $1.68
based on the consideration allocated to such shares when they were issued in
February 2002, and 684,000 shares of the Company's common stock, which were
valued at approximately $0.6 million based on IFX's common stock ($.85 per
share) on the date the transaction closed. The Series D Preferred shares are
convertible at the option of the holders into 12,865,216 shares of IFX common
stock. Thus, the effective conversion price is $.54 per share, which is less
than the $.85 per share trading price of the Company's common stock on the date
the Series D Preferred Stock transaction closed. The difference between the
effective conversion price and the trading price of the Company's common stock
on the closing date results in a beneficial conversion feature of approximately
$4.0 million, which was

                                       18

<PAGE>

recognized as a deemed dividend to preferred shareholders in the fiscal 2002
statement of operations.

     In February 2002, the Company completed the sale of approximately 3.9
million shares of Series C convertible preferred stock ("Series C") in exchange
for $7.0 million in cash and 1.5 million shares of common stock. As part of the
Series C financing, the Company granted the holders of Tutopia stock the right
to exchange such shares for IFX preferred stock (the "Tutopia Put Option") (see
Note 10 of notes to the consolidated financial statements), which resulted in a
discount of $1.6 million to the value of the Series C preferred shares. The
discount on these shares did not result, however, in a beneficial conversion
feature since the intrinsic conversion price of the Series C preferred shares
remained greater than the market price of the Company's common stock on the date
the Series C preferred shares were sold.

     In May 2001, the Company completed the sale of approximately 4.4 million
shares of convertible preferred stock ("Series B") for $15.4 million. Each share
was initially convertible into one share of IFX common stock. In June-July 2000,
the Company issued approximately 2 million shares of convertible preferred stock
(Series "A")for $25.0 million that were each convertible into one share of IFX
common stock at a conversion price of $12.31 per share. As part of the May 2001
sale of preferred stock, the Company changed the conversion ratio of the 2
million shares of preferred stock to 3.52 shares of common stock for each
preferred share. The change in the conversion ratio resulted in a $25.0 million
non-cash beneficial conversion feature that was recognized as a deemed dividend
to preferred shareholders in the fiscal 2001 statement of operations. As part of
the Series C transaction, the conversion ratio of Series B was changed to 1.167
and the conversion ratio of Series A was changed to 4.1.

Income tax benefit

     For the fiscal year ended June 30, 2002, the Company recorded a tax benefit
of approximately $0.8 million from continuing operations compared with a benefit
of $1.5 million and $2.8 million for fiscal years 2001 and 2000, respectively.
The tax benefits realized by the Company are attributable to the utilization of
net operating losses against income from discontinued operations. The effective
income tax benefit rates for fiscal 2002, 2001 and 2000 were approximately 3%,
3% and 5%, respectively. Operating losses that could not be utilized to recover
prior year tax liabilities have been fully reserved with a valuation allowance
at June 30, 2002 and 2001.

Income from discontinued operations

     For the year ended June 30, 2002, the Company had income from discontinued
operations of approximately $1.4 million, net of taxes, as compared with $2.8
million for the year ended June 30, 2001. The decrease of $1.4 million results
from the sale of a redeemable preference share (which related to future payments
due from the discontinued operations) during fiscal 2001. The Company does not
expect to realize any additional significant earnings from these discontinued
operations.

     For the year ended June 30, 2001, the Company had income from discontinued
operations of approximately $2.8 million, net of taxes, as compared with $2.0
million earned for the year ended June 30, 2000. The increase results from the
$2.4 million sale of a redeemable preference share during fiscal 2001, thereby
reducing future earn-out payments.

FINANCIAL CONDITION

Liquidity and Capital Resources

Going Concern

     The Company's working capital deficit decreased by $1.5 million to a $10.1
million deficit at June 30, 2002 from an $11.6 million deficit at June 30, 2001.
The Company's available cash remains at a level that substantially limits the
Company's operations. Although the Company raised $12.0 million through the sale
of convertible preferred stock during fiscal 2002, the Company continues to
incur losses and operating cash flow deficiencies. The Company has experienced
operating losses amounting to $30.6 million, $54.4 million and $38.7 million and
negative cash flows from operations of $12.7 million, $15.0 million and $15.8
million for the years ended June 30, 2002, 2001 and 2000, respectively. As a
result, the Company must obtain substantial additional capital to sustain its
operations. The Company is dependent upon capital from outside sources,
including existing shareholders, to fund its operations and meet ongoing
commitments and obligations. There can be no assurance that such capital will
be available to the Company on acceptable terms, or at all.

     The Company is taking actions in an effort to improve cash flow, including:
(1) reducing the scope of, selling or otherwise disposing of certain operations
that require cash (e.g, Central American operations); (2) selling equipment and
other assets that will generate cash in the short term and (3) decreasing its
overhead and personnel costs in the United States and, selectively, in its Latin
American operating units. Although the Company has made significant reductions
in personnel and overhead costs to reduce the operating losses, additional
reductions in personnel may have to be made in the near term. The Company also
believes that additional cost savings can be generated by combining its
operations with those of Tutopia in certain countries in which both entities
operate. In general, cash needs will also be affected by whether Tutopia is able
to fulfill its payment obligations under its network agreement with IFX.

     In September 2002, the Company received $1.1 million from ROF/IFX in
exchange for a 10% promissory note due June 30, 2003, that is convertible into
shares of either Series D or new preferred stock at the option of the note
holder.

     The Company is in the process of seeking additional capital from UBS
Capital Americas III, L.P. and UBS Capital LLC, which own approximately 63% of
the Company's common stock on an "as converted" basis and have the right to
appoint a majority of the members of the Board of Directors. Additional funding
from UBS Capital, if any, may be in the form of debt instruments convertible
into equity. The negotiations relating to the additional funding, the amount and
terms of such funding, if any, have not been completed.

     No assurance can be given that the Company will be successful in obtaining
such capital, or that such capital will be available on terms acceptable to the
Company. There is no guarantee that projected decreases in expenses will be
sufficient to ensure the continued viability of the Company or that such
decreases will not affect the Company's customer service levels or ability to
generate revenues. Further, there can be no assurance that even if such capital
is obtained and such cost reductions are made, that the Company will achieve
profitability or positive cash flows. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. The consolidated
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the outcome of this
uncertainty.

                                       19

<PAGE>

Liquidity

     For the year ended June 30, 2002, cash used by operating activities was
approximately $12.7 million compared with cash used of $15.0 million for the
year ended June 30, 2001. The revenues from Internet services and products
provided the majority of cash generated from operations in fiscal 2002. The cash
used in operations is mainly related to the connectivity expenses of the
Company's network, including payments under capacity lease agreements, operating
leases, costs of personnel and related overhead and, to a lesser extent, sales,
marketing and advertising costs. In addition, IFX invests cash not needed for
operations at any of its subsidiaries in short-term investments such as U.S.
Government obligations and overnight time deposits. As of June 30, 2002, the
Company had approximately $1.8 million in cash and equivalents.

     For the year ended June 30, 2002, cash of $0.8 million was provided by
investing activities as the Company's cash flow benefited from the release of
$2.1 million of previously restricted cash, offset by a use of approximately
$1.3 million to acquire property and equipment. In fiscal 2001, the Company used
$13.0 million for investing activities. A majority of the cash used in investing
activities in the prior year relates to the acquisition of approximately $7.1
million in property and equipment, a $3.1 million investment in Tutopia and $0.7
million of payments on liabilities related to acquisitions made in prior years.

     For the year ended June 30, 2002, cash provided by financing activities was
approximately $6.0 million compared with $22.7 million for fiscal 2001. IFX
received an aggregate of $12.0 million in investments from UBS Capital and
certain other shareholders during fiscal 2002 through the sale of approximately
9.6 million shares of preferred stock. Cash of approximately $6.0 million was
used for payments of capital lease obligations. This compares with an investment
of $25.6 million from UBS Capital and certain other shareholders during fiscal
2001 through the sale of approximately 5.2 million shares of preferred stock.

     As reported on the Company's Report on Form 8-K dated February 19, 2002,
and pursuant to the Stock Purchase Agreement ("Series C Purchase Agreement")
dated as of October 11, 2001, UBS Capital Americas III, L.P. and UBS Capital LLC
(collectively, "UBS"), invested $7.0 million of cash and surrendered 1.5 million
shares of IFX's common stock held by UBS in exchange for 3,876,241 shares of the
newly issued IFX Series C preferred stock. Prior to the closing of the Series C
preferred round, UBS had advanced IFX $5.5 million through February 18, 2002 in
exchange for 10% convertible notes. Upon the closing of the Series C investment,
the 10% convertible notes were automatically converted to Series C preferred
shares. Each share of Series C preferred stock is convertible into one share of
common stock. The Series C preferred stock carries a liquidation preference such
that, upon a bankruptcy, liquidation, dissolution or unwinding of IFX, each
holder of Series C preferred stock will be entitled to receive $3.00 per share
plus 10% of such amount per annum from the date of issuance (the "Stated
Preference") and will also participate with the holders of common stock after
holders of the Company's preferred stock receive their liquidation preference
and accrued dividends (the "Participation Feature"), provided that the maximum
amount which can be received with respect to the Series C preferred stock after
taking into account the Participation Feature is limited to 3 1/2 times the
Stated Preference.

                                       20

<PAGE>

     The Series C investment caused the conversion ratio of the approximately 2
million shares of Series A preferred stock held by UBS to be adjusted so that
each share of Series A preferred stock is convertible into approximately 4.1
shares of common stock, rather than 3.52 shares of common stock as previously
provided. This investment also caused the conversion ratio of the approximately
4.4 million shares of Series B preferred stock held by UBS to be adjusted so
that each share of Series B preferred stock would be convertible into
approximately 1.167 shares of common stock, rather than one share of common
stock as originally provided. The change in conversion ratio of the Series B
preferred stock did not result in a beneficial conversion feature since the
conversion price remains greater than the market price of the Company's common
stock on the date the Series B preferred stock was originally sold. No
beneficial conversion feature was recognized on the Series A preferred stock
since previous adjustments to the conversion ratio of the Series A preferred
stock resulted in recognition of a beneficial conversion in a prior period which
equaled the proceeds received from the original sale of the Series A preferred
stock. The terms of both the Series A and B preferred stock were amended to add
the same limited Participation Feature as in the Series C preferred stock. As
part of this transaction, IFX provided a put right to UBS and the other Tutopia
preferred and common shareholders providing them the ability to exchange their
equity investment in Tutopia for like shares of IFX's preferred ("New Preferred
Stock") or common stock at an exchange ratio of approximately 0.70 shares of IFX
for each share of Tutopia within one year of closing (the "Put Option"), which
date is February 18, 2003. In general, the New Preferred Stock would have had
the same terms as the Company's Series C preferred stock, except that the New
Preferred Stock would not have had a Participation Feature.

     As a result of the Put Option, holders of Tutopia preferred shares could
have converted their shares into approximately 7.3 million shares of IFX
preferred stock. Such shares would have been convertible into a new class of IFX
preferred stock that is essentially identical to the Company's existing classes
of preferred stock, except with regard to participation features. Also, the Put
Option provided that holders of Tutopia common stock could have converted their
shares into approximately 1.3 million shares of IFX common stock. The Company
computed the estimated value of the Put Option using the Black Scholes option
valuation model and the following assumptions: risk-free interest rate 1.7%,
dividend yield 0%, and an expected life of 1 year. The $1.6 million estimated
fair value of the Put Option issued to Tutopia shareholders that are also IFX
preferred shareholders was recorded as additional paid-in capital and resulted
in a discount to the IFX Series C preferred stock. The Black Scholes valuation
model requires the input of highly subjective assumptions, such as the expected
stock price volatility, and the estimated fair value may not necessarily
represent amounts that could be realized in a current transaction. The discount
on the Series C preferred shares did not result in a beneficial conversion
feature since the intrinsic conversion price of the Series C preferred shares
remained greater than the market price of the Company's common stock on the date
the Series C preferred shares were sold. The terms of the Put Option were later
amended in connection with the Series D financing so that holders of Tutopia
common shares could convert such shares into IFX preferred shares rather than
IFX common shares as provided for in the original Put Option.

     After the issuance of the Series C Preferred Stock as reported in Forms 8-K
filed on October 22, 2001 and February 27, 2002, UBS capital owned approximately
57% of the voting shares of IFX (assuming conversion of all the Company's
convertible preferred stock into common stock).

     On June 28, 2002, pursuant to a Stock Purchase Agreement dated as of
February 19, 2002, UBS Capital, International Technology Investments LC ("ITI"),
LSC, LLC ("LSC"), and Jak Bursztyn ("Bursztyn") (collectively, the "Purchasers")
agreed to invest a total of $5 million and surrender shares of IFX's Series C
preferred stock and Common Stock in exchange for 6,432,608 shares of IFX's
Series D Convertible Preferred Stock ("Series D Preferred Stock"). ITI is an
affiliate of Michael Shalom and LSC is an affiliate of Lee Casty. Each share of
Series D Preferred Stock is convertible into two shares of IFX's Common Stock.
The Series D Preferred Stock carries a liquidation preference such that, upon a
bankruptcy, liquidation, dissolution or winding up of IFX, each holder of Series
D Preferred Stock will be entitled to receive a Stated Preference of $6.00 per
share plus 10% of such amount per annum from the date of issuance and will also
participate with the holders of Common Stock after the Purchasers receive their
liquidation preference and accrued dividends, provided that the maximum amount
which can be received with respect to the Series D Preferred Stock after taking
into account the Participation Feature is limited to 3-1/2 times the Stated
Preference. In this transaction, UBS invested approximately $3.33 million in
cash and

                                       21

<PAGE>

surrendered 750,000 shares of Series C Preferred Stock in exchange for
approximately 4.6 million shares of Series D Preferred Stock. Each of ITI and
LSC invested approximately $812,500 in cash and surrendered approximately
333,000 shares of Common Stock in exchange for approximately 850,000 shares of
Series D Preferred Stock. Bursztyn invested approximately $47,000 in cash and
surrendered approximately 10,000 shares of Common Stock in exchange for
approximately 43,000 shares of Series D Preferred Stock. IFX would have
approximately 41.5 million shares of Common Stock outstanding assuming all of
its convertible preferred stock were converted into Common Stock. On June 27,
2002, IFX amended its Restated Certificate of Incorporation to increase the
number of shares of Common Stock authorized from 60 million to 110 million and
increase the number of shares of preferred stock authorized from 20 million to
40 million.

     Subsequent to June 30, 2002, the Company received $1.1 million from ROF/IFX
("ROF") in exchange for a 10% promissory note due June 30, 2003 that is
convertible into shares of either Series D preferred or a new series of
preferred stock (yet to be issued) at the option of the note holder. As part of
the transaction, ROF was also provided the right to exchange up to 400,000
shares of IFX common stock for shares of that class of Company preferred stock
described in paragraph 3(a) of the Amended And Restated Put Agreement among the
Company, UBS Capital Americas III, L.P. and UBS Capital LLC, with an exchange
ratio of 6 shares of common stock for each share of newly issued preferred
stock.

     In addition, management is working with its controlling shareholders, UBS
Capital Americas and UBS Capital, in an attempt to obtain additional funding to
enable the Company to have sufficient capital to meet its current and projected
operating expenditures through June 30, 2003. There can be no assurances,
however, that the Company will be able to continue raising funds through the
issuance of securities or through other means on acceptable terms, or at all.
The Company's inability to raise sufficient funds in the future could affect its
ability to satisfy capital and operating lease obligations and could cause the
Company to postpone or eliminate capital expenditures until financing is
obtained and raises substantial doubt about the Company's ability to continue as
a going concern.

NASDAQ Listing

     IFX's stock is traded on the NASDAQ SmallCap Market under the symbol
"FUTR." On February 14, 2002, the NASDAQ Staff notified the Company that the bid
price of its common stock had closed at less than $1.00 per share over the
previous 30 consecutive trading days and, as a result, did not comply with
Marketplace Rule 4310 (c) (4) (the "Price Rule"). In accordance with Marketplace
Rule 4310 (c) (8) (D), the Company was provided 180 calendar days, or until
August 13, 2002, to regain compliance with the Price Rule.

     On February 21, 2002, NASDAQ Staff notified the Company that it did not
comply with Marketplace Rule 4310 (c) (2) (B) (the "Capital Rule"), which
requires a minimum of $2.0 million in net tangible assets, $2.5 million in
stockholders' equity, $35.0 million of market capitalization or $500,000 net
income for the most recently completed fiscal year or two of the three of a
company's most recently completed fiscal years. On May 9, 2002, the Company
received a waiver of certain terms of the Company's Certificates of Designation
from the preferred stockholders that resulted in the Company's preferred stock,
which had been stated as outside of Stockholders' Equity, to be reclassified as
part of Stockholders' Equity. On May 17, 2002, NASDAQ advised the Company that
it was in compliance with the Capital Rule.

     On August 14, 2002, the NASDAQ Staff advised the Company that while it had
not regained compliance in accordance with Marketplace Rule 4310 (C) (8) (D),
the staff noted that the Company did meet the initial listing requirements for
$5.0 million of stockholders' equity (based on pro forma stockholders' equity as
reported in the Company's Form 10-Q for the quarter ended March 31,2002). Hence,
the Company was provided with an additional 180 days, or until February 10,
2003, to regain compliance with the applicable requirements. If the shares of
the Company's common stock were to be suspended or delisted from the NASDAQ
system, it would be much more difficult to dispose of the common stock or obtain
accurate quotations as to the price of the securities. This, in turn, could make
it more difficult for the Company to issue securities pursuant to debt or equity
offerings in the future.


     At June 30 and September 30, 2002, the Company's stock was trading below
the NASDAQ's $1.00 per share listing price and, at June 30 and September 30,
2002, the Company did not meet NASDAQ's initial minimum stockholders' equity
requirement of $5.0 million. These conditions may result in the Company's common
stock being delisted from the NASDAQ.

Forward-Looking Statements

     The statements contained herein that are not historical facts are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. These statements can be identified by the use of forward-looking
terminology such as "believes," "intends," "plans," "continue," "expects,"
"may," "will," "should," or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy that
involve risks and uncertainties. The Company wishes to caution you that these
forward-looking statements addressing the timing, costs and scope of the
Company's acquisition of, or investments in, existing or future ISPs, the
revenue and profitability levels of the ISPs in which the Company invests, the
anticipated reduction in operating costs, the liquidity accounts of the Company,
and other matters contained herein regarding matters that are not historical
facts, are only predictions. The Company can give no assurance that the future
results indicated, whether expressed or implied, will be achieved. These
projections and other forward-looking statements are based upon a variety of
assumptions relating to the Company's business, which, although the Company
considers reasonable, may not be realized. Because of the number and
uncertainties of the assumptions underlying the Company's projections and
forward-looking statements, some of the assumptions may not materialize and
unanticipated events and circumstances may occur subsequent to the date of this
report. These forward-looking statements are based on current expectations, and
the Company assumes no obligation to update this information. The inclusion of
projections and other forward-looking statements should not be regarded as a
representation by the Company or any person. These estimates and projections may
not be realized, and actual results may vary materially.

Recent Accounting Pronouncements

     In April 2002, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 145, "Rescission of FASB Statement No. 4, 44 and 64, Amendment of FASB
Statement No. 13 and Technical Corrections". SFAS No. 145 rescinds SFAS No. 4,
which required all gains and losses from the extinguishment of debt to be
aggregated and, if material, classified as an extraordinary item, net of related
income tax effects. As a result, the criteria in Accounting Principles Board
Opinion ("APB No.") No. 30

                                       22

<PAGE>

     will now be used to classify those gains and losses. APB No. 30 requires
disclosures about material gains and losses associated with debt extinguishments
that are unusual or infrequent in nature. Thus, applying the provisions of APB
No. 30 would distinguish transactions that are part of an entity's recurring
operations from those that are unusual or infrequent or that meet the criteria
for classification as extraordinary items. The Company adopted SFAS No. 145
effective July 1, 2001. As a result, the Company reclassified $4.3 million of
gain from the early extinguishment of capital lease agreements, which had been
recorded as an extraordinary item in the Company's March 31, 2002 report on Form
10-Q, to "Other income (expense)". The Company does not expect that adoption of
this statement will have a material impact on its financial position or results
of operations other than as discussed herein.

     During August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supersedes SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets
to be Disposed Of " and APB No. 30, "Reporting the Results of Operations -
Reporting the Effects of the Disposal of a Segment of a Business and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions." SFAS
No. 144 establishes a single accounting model for assets to be disposed of by
sale whether previously held and used or newly acquired. SFAS No. 144 retains
the provisions of APB No. 30 for presentation of discontinued operations in the
statement of operations, but broadens the presentation to include a component of
an entity. SFAS No. 144 is effective for fiscal years beginning after December
15, 2001 and the interim periods within. As permitted, the Company decided to
early adopt SFAS No. 144, effective July 1, 2001, the beginning of the Company's
fiscal year. SFAS No. 144 requires that if an entity decides to adopt the
Statement prior to the effective date and during an interim period other than
the first interim period of a fiscal year, all prior periods of that fiscal year
shall be restated. Early adoption of SFAS No. 144 did not have a material impact
on the Company's operations for the year ended June 30, 2002 and, as a result,
did not require the restatement of any amounts previously reported.

     In July 2001, the FASB issued SFAS No. 141, "Business Combinations," and
SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS No. 141 requires that
the purchase method of accounting be used for all business combinations
completed after June 30, 2001. SFAS No. 141 also specifies that intangible
assets acquired in a purchase method business combination must meet certain
criteria to be recognized and reported apart from goodwill. SFAS No. 142
requires that goodwill and intangible assets with indefinite useful lives no
longer be amortized, but instead are to be tested for impairment at least
annually in accordance with the provisions of SFAS No.142. SFAS No. 142 also
requires that intangible assets with definite useful lives be amortized over
their respective estimated useful lives to their estimated residual values, and
reviewed for impairment in accordance with SFAS No. 121.

     The Company adopted SFAS No. 141 and No. 142 effective July 1, 2001. The
adoption of these pronouncements did not have an impact on the Company's
financial condition or results of operations.

Sarbanes-Oxley Act of 2002

     On July 30, 2002, the Sarbanes-Oxley Act of 2002 (the "Act") was signed
into law by the President of the United States. The Act imposes, among other
things, new obligations for disclosure and corporate governance on public
companies and directs the Securities and Exchange Commission and other
regulatory bodies to issue additional broad regulations to implement its
provisions. Certain of such obligations are effective for this annual report and
accordingly, the Company has included the required certifications herein. The
Company intends to comply fully with all such current and future regulations as
may be issued as a result of the Act. The Company is unable to quantify at this
point in time the additional costs that it will incur in connection with
complying with the Act.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Exchange Rate and Inflation Risk

     The Company's continuing operations are focused primarily in Latin America,
subjecting IFX to certain political, economic and commercial risks and
uncertainty not typically found in the United States. The Company's exposure to
market risk is directly related to its role as a Latin American Internet
services company. The Company's primary market risk exposure relates to foreign
exchange rate risk. Foreign exchange rate risk arises from the possibility that
changes in foreign currency exchange rates will adversely impact the value of
the Company's results of operations, assets, liabilities and/or equity. The
value of local currencies generally fluctuate in foreign countries. This
fluctuation can cause the Company to gain or lose on the translation of foreign
currency to U.S. Dollars. For example, recent economic and political conditions
in Argentina, Brazil and Venezuela have contributed to significant fluctuations
in the values of the currencies of those countries.

Interest Rate Risk

     The Company's short-term investments are classified as cash and cash
equivalents with original maturities of three months or less. Therefore, changes
in market interest rates do not affect the value of Company's investments.

                                       23

<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                        IFX CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                                 June 30,
                                                                                      --------------------------------
                                                                                          2002              2001
                                                                                          ----              ----
<S>                                                                                   <C>                <C>
ASSETS
Current assets:
Cash and cash equivalents                                                             $    1,827,900     $   7,647,700
Restricted cash                                                                                    -           981,400
Receivables, net of allowance for doubtful accounts of $698,100 and
    $1,955,800 at June 30, 2002 and 2001, respectively                                     2,968,100         2,692,400
Due from related party                                                                       271,800           910,500
Prepaid expenses and other current assets                                                    485,400         1,400,100
                                                                                      --------------     -------------
     Total current assets                                                                  5,553,200        13,632,100
                                                                                      --------------     -------------
Property and equipment, net                                                                9,396,000        24,284,500

Other assets:
Restricted cash - non current                                                                      -         1,131,700
Acquired customer base, net of accumulated amortization of
   $2,895,400 and $4,493,500 at June 30, 2002 and 2001, respectively                         266,600         3,953,900
Investments                                                                                  402,600         3,009,000
Foreign taxes recoverable                                                                  1,187,800         1,976,100
Prepaid service agreements and other                                                       1,129,200           536,300
                                                                                      --------------     -------------
     Total other assets                                                                    2,986,200        10,607,000
                                                                                      --------------     -------------
     Total assets                                                                     $   17,935,400     $  48,523,600
                                                                                      ==============     =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                                                      $   10,260,500     $  10,926,300
Accrued expenses                                                                           2,905,600         5,257,200
Current portion of capital lease obligations                                               1,809,200         7,926,000
Deferred revenues -  related party                                                                 -           581,600
Deferred revenues                                                                            625,300           521,100
Foreign taxes payable                                                                         52,900                 -
                                                                                      --------------     -------------
     Total current liabilities                                                            15,653,500        25,212,200

Long-term liabilities:
Notes payable and other long-term liabilities                                                347,800           296,400
Deferred gain on sale of investment                                                                -         4,451,900
Capital lease obligations, less current portion                                              489,000         8,142,100
                                                                                      --------------     -------------
     Total long-term liabilities                                                             836,800        12,890,400
                                                                                      --------------     -------------
     Total liabilities                                                                    16,490,300        38,102,600

                                                                                      --------------     -------------
Commitments and Contingencies (Notes 1, 7 and 9)                                                   -                 -

Stockholders' equity:

Preferred Stock, convertible $1.00 par value; 40,000,000 shares authorized,
 16,007,980 and 6,449,131 issued and outstanding at June 30, 2002 and 2001,
 respectively                                                                             52,775,900        40,463,900

Common stock, $.02 par value; 110,000,000 shares authorized, 12,099,095 and
 14,276,495 shares issued and outstanding at June 30, 2002 and 2001, respectively            242,000           285,500

Additional paid-in capital                                                                76,610,200        77,054,600
Treasury stock                                                                              (150,000)                -
Accumulated deficit                                                                     (124,012,100)      (99,415,000)
Accumulated other comprehensive loss                                                      (2,000,300)       (1,118,500)
Deferred compensation                                                                     (2,020,600)       (6,849,500)
                                                                                        ------------     -------------
     Total stockholders' equity                                                            1,445,100        10,421,000
                                                                                        ------------     -------------
     Total liabilities and stockholders' equity                                       $   17,935,400     $  48,523,600
                                                                                        ============     =============

</TABLE>

The accompanying footnotes are an integral part of these consolidated financial
                                  statements.

                                       24

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                            Fiscal year ended June 30,
                                                                -----------------------------------------------
                                                                     2002           2001            2000
                                                                --------------- -------------- ----------------
<S>                                                            <C>              <C>            <C>
REVENUES:
  Dedicated line services                                      $    14,483,000  $   7,188,900  $    1,351,100
  Dial-up services                                                   3,704,500      7,172,500       8,249,600
  Web hosting and design services                                    1,167,100      1,283,600         379,000
  Sales to related party                                             7,205,000     13,842,700               -
  Other                                                              1,591,500      2,634,100         709,600
                                                                --------------- -------------- ----------------
   Total revenues                                                   28,151,100     32,121,800      10,689,300
  Cost of revenues                                                  15,558,100     20,796,900       8,487,000
                                                                --------------- -------------- ----------------
  Gross profit                                                      12,593,000     11,324,900       2,202,300

OPERATING EXPENSES:
  General and administrative                                        26,926,400     34,180,600      30,570,100
  Sales and marketing                                                1,525,800      3,547,200       2,252,000
  Depreciation and amortization                                     11,493,400     17,093,800       8,053,100
  Impairment of long-lived assets                                    3,229,700     10,919,100               -
                                                                --------------- -------------- ----------------
   Total operating expenses                                         43,175,300     65,740,700      40,875,200
                                                                --------------- -------------- ----------------
  Operating loss from continuing operations                        (30,582,300)   (54,415,800)    (38,672,900)

OTHER INCOME (EXPENSE):
  Interest income                                                       93,500        614,100         343,300
  Interest expense                                                  (2,051,300)    (1,918,400)       (611,300)
  Gain (loss) on sale of investments                                 4,426,700     (2,505,700)              -
  Equity in net loss of investees                                     (858,400)    (3,181,400)    (11,775,700)
  Impairment of equity investment                                   (1,672,100)             -               -
  Gain on sale of subsidiary                                           526,700              -               -
  Gain on early extinguishment of debt                               4,324,700              -               -
  Other, net                                                        (1,029,900)    (1,307,300)        101,200
                                                                --------------- -------------- ----------------
   Total other income (expense), net                                 3,759,900     (8,298,700)    (11,942,500)
                                                                --------------- -------------- ----------------
  Loss from continuing operations before income tax benefit        (26,822,400)   (62,714,500)    (50,615,400)
  Income tax benefit                                                   778,900      1,525,800       2,771,400
                                                                --------------  -------------- ----------------
  Loss from continuing operations                                  (26,043,500)   (61,188,700)    (47,844,000)
  Income from discontinued operations, net of income taxes           1,446,400      2,833,500       1,967,000
                                                                --------------- -------------- ----------------
   Net loss                                                        (24,597,100)   (58,355,200)    (45,877,000)
  Deemed dividends to preferred shareholders                        (4,035,300)   (25,000,000)              -
                                                                --------------- -------------- ----------------
   Net loss available to common stockholders                   $   (28,632,400) $ (83,355,200) $  (45,877,000)
                                                                =============== ============== ================

BASIC AND DILUTED INCOME (LOSS) PER SHARE:
  Loss from continuing operations                              $         (1.89) $       (4.44) $        (4.71)
  Discontinued operations                                                  .10           0.20            0.19
                                                                --------------- -------------- ----------------
   Net loss per share                                                    (1.79)         (4.24)          (4.52)
  Deemed dividends to preferred shareholders                             (0.29)         (1.81)              -
                                                                --------------- -------------- ----------------
   Net loss per share available to common stockholders         $         (2.08) $       (6.05) $        (4.52)
                                                                =============== ============== ================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                          13,736,495     13,784,897      10,153,565
                                                                =============== ============== ================
</TABLE>

      The accompanying footnotes are an integral part of these consolidated
                              financial statements.

                                       25

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                              Common Stock
                                                                       -------------------------    Additional
                                                     Preferred Stock     Shares        Amount     Paid-in Capital  Treasury Stock
                                                    -----------------  ----------- ------------- ----------------- --------------
<S>                                                 <C>                <C>         <C>           <C>               <C>    <C>
Balance at June 30, 1999                            $              -    6,830,240  $    136,600  $     11,299,100  $          -
Stock issued for cash                                              -    5,541,511       110,800        11,020,800             -
Stock issued for acquisitions                                      -      835,598        16,700        20,938,200             -
Stock issued for contract termination                              -      119,314         2,400         4,154,300             -
Issuance of preferred
 stock - 1,210,398 shares                                 14,900,000            -             -                               -
Compensation expense associated with
 variable stock options                                            -            -             -         1,144,400             -
Deferred compensation associated with
 grant of stock options                                            -            -             -        17,217,700             -
Common stock retired                                               -      (31,480)         (600)         (615,200)            -
Increase in investment in equity
 investee as a result of sale of stock
 by Tutopia                                                        -            -             -         4,079,800             -
Compensation expense associated with
 warrants for contract termination                                 -            -             -         1,659,000             -
Net loss                                                           -            -             -                 -             -
Foreign currency translation                                       -            -             -                 -             -


Comprehensive loss                                                 -            -             -                 -             -
                                                     ---------------   ----------    ----------    --------------    ----------
Balance at June 30, 2000                                  14,900,000   13,295,183       265,900        70,898,100             -
Stock issued for contract termination                              -        6,000           100            77,600             -
Stock issued for liabilities related to
 acquisitions                                                      -      733,666        14,700         4,293,800             -
Issuance of preferred stock - 5,238,733 shares            25,563,900            -             -                 -             -
Compensation expense associated with grant of
 stock                                                             -      241,646         4,800         2,122,400             -
Deferred compensation associated with
 grant of stock options                                            -            -             -          (337,300)            -
Beneficial conversion feature                             25,000,000            -             -       (25,000,000)            -
Deemed dividend to preferred shareholders                (25,000,000)           -             -        25,000,000             -
Net loss                                                           -            -             -                 -             -
Foreign currency translation                                       -            -             -                 -             -

Comprehensive loss                                                 -            -             -                 -             -
                                                     ---------------   ----------    ----------    --------------    ----------
Balance at June 30, 2001                                  40,463,900   14,276,495       285,500        77,054,600             -
Common stock cancelled and converted to
 preferred stock                                                   -   (2,177,400)      (43,500)       (1,701,700)            -
Stock held in Treasury related to sale
 of subsidiary                                                     -            -             -                 -      (150,000)
Issuance of preferred stock - 9,558,849 shares            12,312,000            -             -                 -             -
Series C preferred stock - value of
 Tutopia Put Option                                                -            -             -         1,626,900             -
Beneficial conversion feature                              4,035,300                                   (4,035,300)
Deemed dividend to preferred shareholders                 (4,035,300)                                   4,035,300
Compensation expense associated with grant of
 variable option agreements                                        -            -             -           (20,800)            -
Deferred compensation associated with
 grant of stock options                                            -            -             -          (688,800)            -
Compensation expense associated with
 warrants for contract termination                                 -            -             -           340,000             -
Net loss                                                           -            -             -                 -             -
Foreign currency translation                                       -            -             -                 -             -
Comprehensive loss                                                 -            -             -                 -             -
                                                     ---------------   ----------    ----------    --------------    ----------
Balance at June 30, 2002                            $     52,775,900   12,099,095  $    242,000  $     76,610,200  $   (150,000)
                                                     ===============   ==========    ==========    ==============    ==========
</TABLE>





<TABLE>
<CAPTION>
                                                                          Retained Earnings    Accumulated Other
                                                        Deferred            (Accumulated         Comprehensive
                                                      Compensation             Deficit)           Income(loss)          Total
                                                   --------------------   -------------------   ----------------  ----------------
<S>                                                <C>                   <C>                    <C>               <C>
Balance at June 30, 1999                           $       (129,500)      $     4,817,200       $     (26,000)    $    16,097,400
Stock issued for cash                                             -                     -                   -          11,131,600
Stock issued for acquisitions                                     -                     -                   -          20,954,900
Stock issued for contract termination                             -                     -                   -           4,156,700
Issuance of preferred stock - 1,210,398 shares                    -                     -                   -          14,900,000
Compensation expense associated with
 variable stock options                                           -                     -                   -           1,144,400
Deferred compensation associated with
 grant of stock options                                 (12,003,000)                    -                   -           5,214,700
Common stock retired                                              -                     -                   -            (615,800)
Increase in investment in equity
 investee as a result of sale of stock
 by Tutopia                                                       -                     -                   -           4,079,800
Compensation expense associated with
 warrants for contract termination                                -                     -                   -           1,659,000
Net loss                                                          -           (45,877,000)                  -         (45,877,000)
Foreign currency translation                                      -                     -            (303,000)           (303,000)
                                                                                                                    -------------
Comprehensive loss                                                -                     -                   -         (46,180,000)
                                                      -------------         -------------          ----------       -------------
Balance at June 30, 2000                                (12,132,500)          (41,059,800)           (329,000)         32,542,700
Stock issued for contract termination                             -                     -                   -              77,700
Stock issued for liabilities related to
 acquisitions                                                     -                     -                   -           4,308,500
Issuance of preferred stock - 5,238,733 shares                    -                     -                   -          25,563,900
Compensation expense associated with grant of
 stock                                                            -                     -                   -           2,127,200
Deferred compensation associated with
 grant of stock options                                   5,283,000                     -                   -           4,945,700
Beneficial conversion feature                                     -                     -                   -                   -
Deemed dividend to preferred shareholders                         -                     -                   -                   -
Net loss                                                          -           (58,355,200)                  -         (58,355,200)
Foreign currency translation                                      -                     -            (789,500)           (789,500)
                                                                                                                    -------------
Comprehensive loss                                                -                     -                   -         (59,144,700)
                                                      -------------         -------------          ----------       -------------
Balance at June 30 2001                                  (6,849,500)          (99,415,000)         (1,118,500)         10,421,000
Common stock cancelled and converted to
 preferred stock                                                  -                     -                   -          (1,745,200)
Stock held in Treasury related to sale
 of subsidiary                                                    -                     -                   -            (150,000)
Issuance of preferred stock - 9,558,849 shares                    -                     -                   -          12,312,000
Series C preferred stock - value of
 Tutopia Put Option                                               -                     -                   -           1,626,900
Beneficial conversion feature                                     -                     -                   -                   -
Deemed dividend to preferred shareholders                         -                     -                   -                   -
Compensation expenses associated with grant of
 variable option agreements                                       -                     -                   -             (20,800)
Deferred compensation associated with
 grant of stock options                                   4,828,900                     -                   -           4,140,100
Compensation expense associated with
 warrants for contract termination                                -                     -                   -             340,000

Net loss                                                          -           (24,597,100)                  -         (24,597,100)
Foreign currency translation                                      -                     -            (881,800)           (881,800)
                                                                                                                    -------------
Comprehensive loss                                                -                     -                   -         (25,478,900)
                                                      -------------         -------------          ----------       -------------
Balance at June 30, 2002                           $     (2,020,600)      $  (124,012,100)      $  (2,000,300)    $     1,445,100
                                                      =============         =============          ==========       =============
</TABLE>

The accompanying footnotes are an integral part of these consolidated financial
                                  statements.

                                       26

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                        For the fiscal year ended June 30,
                                                                                 -------------------------------------------------
                                                                                      2002            2001               2000
                                                                                 -------------   --------------    ---------------
<S>                                                                              <C>             <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss                                                                         $ (24,597,100)  $  (58,355,200)   $  (45,877,000)

Adjustments to reconcile net loss to cash used in operating activities:

   Depreciation                                                                      9,508,200        7,239,600         2,696,800
   Amortization                                                                      1,985,200        9,854,200         5,356,300
   Stock related compensation                                                        4,119,300        7,150,600         6,359,100
   Bad debt expense                                                                  1,122,800        1,033,300           842,400
   Non-cash interest expense paid in preferred shares                                  187,500                -                 -
   (Gain) loss on sale of investments                                               (4,426,700)       2,505,700                 -
   Compensation associated with consulting agreements                                        -                -         4,156,700
   Impairment of long-lived assets                                                   3,229,700       10,919,100                 -
   Impairment of equity investment                                                   1,672,100                -                 -
   Loss valuation allowance on investments                                                   -          350,400                 -
   Equity in net loss of investees                                                     858,400        3,181,400           330,200
   Gain on sale of subsidiary                                                         (526,700)               -                 -
   Gain from early extinguishment of debt                                           (4,324,700)               -                 -
   Effect of deconsolidation of Tutopia.com                                                  -       (2,391,900)        4,674,300
   Change in net assets of discontinued operations                                           -          813,700         2,774,300
   Changes in operating assets and liabilities:                                              -                -                 -
         Foreign taxes recoverable                                                    (392,700)        (553,700)       (1,422,400)
         Receivables                                                                (2,210,900)      (2,426,300)       (1,112,100)
         Due from related party                                                        481,200         (910,500)                -
         Prepaid expenses and other current assets                                     737,500         (515,200)         (746,000)
         Income taxes receivable                                                             -        1,632,600        (1,632,600)
         Other assets                                                                 (426,100)         306,900           (24,300)
         Accounts payable and accrued expenses                                         662,400        4,419,900         7,464,400
         Deferred revenues                                                            (346,800)         740,800           361,900
                                                                                 -------------   --------------    --------------
Cash used in operating activities                                                  (12,687,400)     (15,004,600)      (15,798,000)
                                                                                 -------------   --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Acquisitions, primarily customer base                                                     -         (656,600)       (2,443,900)
   Investments                                                                               -       (3,135,000)        4,171,500
   Restricted cash                                                                   2,113,100       (2,113,100)                -
   Increase in notes receivable                                                              -                -            (2,700)
   Purchases of property and equipment                                              (1,334,200)      (7,140,400)       (4,236,200)
                                                                                 -------------   --------------    --------------
Cash provided by (used in) investing activities                                        778,900      (13,045,100)       (2,511,300)
                                                                                 -------------   --------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Proceeds from notes payable and other long-term liabilities                               -           27,300           933,400
   Payment of capital lease obligations                                             (5,951,200)      (2,939,800)                -
   Issuance of common stock                                                                  -                -        11,131,600
   Issuance of preferred stock                                                      12,000,000       25,563,900        14,900,000
                                                                                 -------------   --------------    --------------
Cash provided by financing activities                                                6,048,800       22,651,400        26,965,000
                                                                                 -------------   --------------    --------------
Effect of exchange rate changes on cash and cash equivalents                            39,900         (789,500)         (303,000)
                                                                                 -------------   --------------    --------------
Net (decrease) increase in cash and cash equivalents                                (5,819,800)      (6,187,800)        8,352,700
Cash and cash equivalents, beginning of period                                       7,647,700       13,835,500         5,482,800
                                                                                 -------------   --------------    --------------
Cash and cash equivalents, end of period                                         $   1,827,900   $    7,647,700    $   13,835,500
                                                                                 =============   ==============    ==============
   Supplemental disclosure of cash flow information:

   Cash paid for interest                                                        $   1,863,800   $    1,918,400    $      611,300
                                                                                 =============   ==============    ==============
   Supplemental disclosure of non-cash investing and financing activities:

   Buydown of capital lease obligations                                          $   8,544,300   $            -    $            -
                                                                                 =============   ==============    ==============
   Acquisition of equipment through capital lease obligations                    $   1,254,600   $    8,186,800    $    1,000,000
                                                                                 =============   ==============    ==============
   Acquisition of equipment through increase in accounts payable                 $           -   $      940,700    $            -
                                                                                 =============   ==============    ==============
   Conversion of common stock to preferred stock                                 $   1,745,200   $            -    $            -
                                                                                 =============   ==============    ==============
   Value of common stock issued in conjunction with liabilities related to
   acquisitions                                                                  $           -   $    4,308,500    $   20,954,900
                                                                                 =============   ==============    ==============
</TABLE>

The accompanying footnotes are an integral part of these consolidated financial
                                  statements.

                                       27

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2002

Note 1   Company

     IFX Corporation was incorporated in Delaware in 1985 and is headquartered
in Miami Lakes, Florida. IFX provides Internet network connectivity services and
offers a broad range of Internet-related services to Internet service providers,
multinational corporations, telecommunications carriers, small to medium-sized
businesses and, to a lesser extent, individual consumers, in Latin America. The
Company has operations in Argentina, Brazil, Chile, Colombia, Mexico, Panama,
Uruguay, Venezuela and the United States. IFX also operates networks in El
Salvador, Honduras, Guatemala and Nicaragua (collectively, the "Central American
Operations") which the Company intends to sell or otherwise dispose of during
fiscal 2003.

Going Concern

     The Company's working capital deficit decreased by $1.5 million to a $10.1
million deficit at June 30, 2002 from an $11.6 million deficit at June 30, 2001.
The Company's available cash remains at a level that substantiallly limits the
Company's operations. Although the Company raised $12.0 million through the sale
of convertible preferred stock during fiscal 2002, the Company continues to
incur losses and operating cash flow deficiencies. The Company has experienced
operating losses amounting to $30.6 million, $54.4 million and $38.7 million and
negative cash flows from operations of $12.7 million, $15.0 million and $15.8
million for the years ended June 30, 2002, 2001 and 2000, respectively. As a
result, the Company must obtain substantial additional capital to sustain its
operations. The Company is dependent upon capital from outside sources,
including existing shareholders, to fund its operations and meet ongoing
commitments and obligations. There can be no assurances that such capital will
be available to the Company on acceptable terms, or at all.

     The Company is taking actions designed to improve cash flow, including (1)
reducing the scope of, selling or otherwise disposing of certain operations that
require cash (e.g., Central American operations); (2) selling certain equipment
and other assets that will generate cash in the short term and (3) decreasing
its overhead and personnel costs in the United States and, selectively, in the
Latin American operating units. Although the Company has made significant
reductions in personnel and overhead costs to reduce the operating losses,
additional reductions in personnel may have to be made in the near term. The
Company also believes that additional cost savings can be generated by combining
its operations with those of Tutopia in certain countries in which both entities
operate. In general, cash needs will also be affected by whether Tutopia is able
to fulfill its payment obligations under its network agreement with IFX.

     In September 2002, the Company received $1.1 million from ROF/IFX in
exchange for a 10% promissory note due June 30, 2003, that is convertible into
shares of either Series D or new preferred stock at the option of the note
holder.

     The Company is in the process of seeking additional capital from UBS
Capital Americas III, L.P. and UBS Capital LLC, which own approximately 63% of
the Company's common stock on an "as converted" basis and have the right to
appoint a majority of the members of the Board of Directors. Additional funding
from UBS Capital, if any, may be in the form of debt instruments convertible
into equity. The negotiations relating to the additional funding, the amount and
terms of such funding, if any, have not been completed.

     No assurance can be given that the Company will be successful in obtaining
additional capital, or that such capital will be available on terms acceptable
to the Company. There is no guarantee that projected decreases in expenses will
be sufficient to ensure the continued viability of the Company or that such
decreases will not affect the Company's customer service levels or ability to
generate revenues. Further, there can be no assurance that even if such capital
is obtained and such cost reductions are made, that the Company will achieve
profitability or positive cash flows. These conditions raise substantial doubt
as to the Company's ability to continue as a going concern. The consolidated
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the outcome of this
uncertainty.

Note 2   Summary of Significant Accounting Policies

Basis of Presentation: The consolidated financial statements include the
accounts of IFX Corporation and its wholly owned subsidiaries (collectively
referred to herein as "IFX", "IFX Networks" or the "Company") for which it has a
controlling financial interest. All intercompany accounts and transactions are
eliminated in consolidation.

     As more fully discussed in Note 16, during September 2000, the Company's
voting interest in its majority-owned subsidiary, Tutopia.com, Inc. ("Tutopia")
fell below 50%. As a result of this reduction, the Company deconsolidated
Tutopia and accounts for the investment in Tutopia under the equity method.
Accordingly, in fiscal 2001 the Company restated its fiscal 2000 consolidated
financial statements as if Tutopia had been accounted for under the equity
method since its inception in January 2000.

     In April 2000, Tutopia sold common stock representing approximately a 15%
interest in Tutopia to shareholders other than the Company, resulting in
proceeds of approximately $5.5 million at a price per common share exceeding the
Company's carrying value at that time for the Company's investment in Tutopia's
common stock. The restated financial statements reflect an increase in the
Company's investment in Tutopia and in paid-in-capital of approximately $4
million as of June 30, 2000, to record the amount in excess of the Company's
carrying value as a capital transaction.

                                       28

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Fiscal Year: The Company's fiscal year end is June 30. References herein to
fiscal 2002, 2001 and 2000 refer to the fiscal years ended June 30, 2002, 2001
and 2000, respectively.

Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles 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 financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Revenue Recognition: Revenue from customer contracts related to dial-up access,
dedicated phone line and web hosting fees are recognized ratably over the term
of the underlying contract, which is generally from one month to three years.
Cash received in advance of revenues earned is recorded as deferred revenues.
Revenues derived from other services are recognized as earned.

     Revenues related to amounts received under revenue sharing agreements with
telecommunications companies are generally recognized when such services are
utilized by the Company's end users. Revenues related to sales to Tutopia are
generally not recognized until collection is reasonably assured because of the
insufficiency of Tutopia's cash flows.

     During the year ended June 30, 2002, the Company entered into certain non-
monetary transactions with unrelated third parties for which revenues of
approximately $439,000 were recorded in the consolidated statement of
operations. In connection with these transactions, the Company received certain
non-monetary considerations amounting to approximately $439,000, which were
included as expenses in the Company's consolidated statement of operations for
the year ended June 30, 2002.

Credit Risk: Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist principally of trade accounts
receivable.

     The Company's receivables subject the Company to credit risk, as collateral
is generally not required. The Company's risk of loss is limited to billings to
customers for services. The use of pre-approved charges to customer credit cards
and the ability of IFX to terminate Internet access on delinquent accounts help
to limit the risks of these losses. In addition, the large number of customers
comprising the Company's customer base mitigate, to an extent, the concentration
of credit risk.

Vendor Services: The Company relies on third-party networks, local telephone
companies and other companies to provide data communications capacity. Although
management is of the opinion that alternative telecommunications facilities
could be found in a timely manner, any disruption of these services could have
an adverse effect on the Company's operating results.

Cash and Cash Equivalents: The Company considers as cash equivalents all
financial instruments with maturity of three months or less when purchased.

Restricted Cash: During fiscal 2001, the Company entered into capital lease
agreements relating to computer equipment for expansion of the Company's
network. As part of certain of these capital lease agreements, the Company was
required to maintain a minimum amount of cash in restricted specified
interest-bearing accounts. No such requirement existed at June 30, 2002.

Fair Value of Financial Instruments: The carrying amounts of the Company's cash
and cash equivalents, restricted cash, receivables, accounts payable and notes
payable approximate fair value due to the short-term nature of these accounts.

Impairment of Long-Lived Assets: Effective July 31, 2001, the Company accounts
for the possible impairment of long-lived assets in accordance with the
Financial Accounting Standards Board ("FASB") Statement of Financial Accounting
Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets." SFAS No. 144 requires that long-lived assets to be held and
used by the Company be reviewed for possible impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. If changes in circumstances indicate that the carrying amount of
an asset that an entity expects to hold and use may not be recoverable, future
cash flows expected to result from the use of the asset and its disposition must
be estimated. If the undiscounted value of future cash flows is less than the
carrying amount of the asset, an impairment charge should be recorded.

     At June 30, 2002, the Company concluded that the estimated undiscounted
cash flows associated with certain of its long-lived assets, including acquired
customer base and property and equipment, may not be sufficient to recover the
net book value of such assets. In accordance with SFAS No. 144, during 2002, the
Company recorded charges of approximately $0.8 million and $2.4 million related
to the impairment of acquired customer base and property and equipment,
respectively. A $10.9 million impairment charge was taken in fiscal 2001 as a
result of an analysis of the Company's acquired customer base at June 30, 2001.
The impairment charges were recorded to reduce long-lived assets to estimated
fair value. Fair value was estimated based on the present value of the future
cash flows expected to be derived from the underlying assets. The fair value
estimates, as required by SFAS No. 144, did not consider the value of such
assets in a forced sale or liquidation and were based primarily on an analysis
of the related operations discounted net cash flows.

Property and Equipment: Property and equipment are stated at cost. Depreciation
and amortization is provided using the straight-line method over the estimated
useful lives of the assets, commencing when assets are installed or placed in
service. The estimated useful lives generally range between 3 and 10 years.

Acquired Customer Base: Acquired customer base consists of the excess of the
purchase price paid over the tangible net assets of acquired companies. The
Company capitalizes specific costs incurred for the purchase of customer bases
from other Internet Service Providers ("ISPs").

                                       29

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     Amortization is recorded using the straight-line method over three years
commencing when the customer base is acquired. Amortization expense was
approximately $2.0 million and $9.9 million for the years ended June 30, 2002
and June 30, 2001, respectively.

Advertising and Marketing Expenses: The Company expenses all advertising and
marketing costs as incurred.

Risks and Uncertainties: The Company's operations are subject to certain risks
and uncertainties, including those associated with: a brief history operating in
the Internet network business; losses from continuing operations; negative cash
flows and fluctuations in operating results and in foreign currency exchange
rates; political and economic risks associated with international operations;
dependence on key personnel; dependence on suppliers for operation of the
network; the need to enhance management information systems; increasing
competition from competitors with lower cost structures, greater resources, or
greater brand recognition; regulatory risks in the countries in which the
Company operates; decreased growth in Internet usage; financing arrangement
terms that may restrict operations; and pending litigation related to the
continuing and discontinued operations.

Reclassification: Certain amounts reported in prior years have been reclassified
to conform to the current method of presentation.

Stock-Based Compensation: The Company grants stock options generally for a fixed
number of shares with an exercise price equal to or below the fair value of the
shares at the date of grant. The Company accounts for stock option grants to
employees in accordance with Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees" and, accordingly, recognizes
compensation expense only if the market value on the date of the grant is above
the exercise price of the options.

Computation of Earnings or Loss per Common Share: The Company calculates
earnings or loss per common share in accordance with SFAS No. 128, "Computation
of Earnings Per Share." Accordingly, basic earnings per share are computed using
the weighted average number of common shares outstanding during the period.
Diluted earnings per common share is calculated based upon the sum of the
weighted average number of shares outstanding and the weighted average number of
potentially dilutive securities consisting of stock options and common shares
issuable upon the conversion of preferred stock. Potentially dilutive securities
have been excluded from the calculation of diluted loss per common share since
their effect would have been anti-dilutive. Such securities include options,
warrants, covertible preferred stock and shares issuable in the event the
Tutopia put option is exercised. Approximately 43.6 million of such potentially
dilutive securities were excluded from the fiscal 2002 earnings per share
calculation.

New Pronouncements: In April 2002, the FASB issued SFAS No. 145, "Rescission of
FASB Statement No. 4, 44 and 64, Amendment of FASB Statement No. 13 and
Technical Corrections". SFAS No. 145 rescinds SFAS No. 4, which required all
gains and losses from the extinguishment of debt to be aggregated and, if
material, classified as an extraordinary item, net of related income tax effect.
As a result, the criteria in APB Opinion No. 30 will now be used to classify
those gains and losses. APB Opinion No. 30 requires disclosures about material
gains and losses associated with debt extinguishments that are unusual or
infrequent in nature. Thus, applying the provisions of APB Opinion No. 30 would
distinguish transactions that are part of an entity's recurring operations from
those that are unusual or infrequent or that meet the criteria for
classification as extraordinary items. The Company adopted SFAS No. 145
effective July 1, 2001. As a result, the Company reclassified $4.3 million of
gains from the early extinguishment of debt associated with capital lease
agreements, which had been recorded as an extraordinary item in the Company's
March 31, 2002 report on Form 10-Q, to "Other income (expense)". The Company
does not expect that adoption of SFAS No. 145 will have a material impact on its
financial position or results of operations other than as discussed herein.

                                       30

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supersedes SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets
to be Disposed Of" and APB No. 30, "Reporting the Results of Operations -
Reporting the Effects of the Disposal of a Segment Business and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions." SFAS No. 144
establishes a single accounting model for assets to be disposed of by sale
whether previously held and used or newly acquired. SFAS No. 144 retains the
provisions of APB No. 30 for presentation of discontinued operations in the
statement of operations, but broadens the presentation to include a component of
an entity. SFAS No. 144 is effective for fiscal years beginning after December
15, 2001 and interim periods within. As permitted, the Company decided to early
adopt SFAS No. 144, effective July 1, 2001, the beginning of the Company's
fiscal year. SFAS No. 144 requires that if an entity decides to adopt the
Statement prior to the effective date and during an interim period other than
the first interim period of a fiscal year, all prior periods of that fiscal year
shall be restated. Early adoption of SFAS No. 144 did not have a material impact
on the Company's operations for the year ended June 30, 2002 and, as a result,
did not require the restatement of any amounts previously reported.

     In July 2001, the FASB issued SFAS No. 141, "Business Combinations," and
SFAS No. 142, "Goodwill and Other Intangible Assets. SFAS No. 141 requires that
the purchase method of accounting be used for all business combinations
completed after June 30, 2001. SFAS No. 141 also specifies that intangible
assets acquired in a purchase method business combination must meet certain
criteria to be recognized and reported apart from goodwill. SFAS No. 142
requires that goodwill and intangible assets with indefinite useful lives no
longer be amortized, but instead be tested for impairment at least annually in
accordance with the provisions of SFAS No. 142. SFAS No. 142 also requires that
intangible assets with definite useful lives be amortized over their respective
estimated useful lives to their estimated residual values, and reviewed for
impairment in accordance with SFAS No. 121. The Company adopted the provisions
of SFAS No. 141 and SFAS No. 142 effective July 1, 2001. The adoption of these
pronouncements did not have an impact on the Company's financial condition or
results of operations.

     At the July 2001 Emerging Issues Task Force meeting, the Securities and
Exchange Commission staff announced that, among other things, preferred
securities that are redeemable upon the occurrence of an event outside the
control of the issuer, such as a change in control, are required to be
classified outside of equity (EITF D-98 Classification and Measurement of
Redeemable Securities).

Cost of Computer Software: Effective July 1, 1999, the Company adopted Statement
of Position ("SOP") 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use", which requires that certain costs for
the development of internal use software be capitalized, including the costs of
coding, software configuration, upgrades and enhancements. For the years ended
June 30, 2001 and 2000, the Company capitalized $1.5 million and $2.1 million,
respectively, of internal use software. No such costs were capitalized during
fiscal 2002.

Investments: The Company uses the equity method to account for its less than 50%
interest in Tutopia. Under the equity method, the Company's proportionate share
of Tutopia's net losses is included in the Company's consolidated statements of
operations. The Company periodically evaluates its investment in Tutopia for
indications of impairment such as, recent security sales, deterioration of
financial condition, near-term prospects for financial improvement, and other
relevant factors. As a result of such analysis, the Company reduced the carrying
value of its investment in Tutopia by approximately $1.7 million during the
fourth quarter of fiscal 2002. Management estimated the amount of the impairment
by comparing a recent sale of Tutopia preferred stock with that of the carrying
value of its investment in Tutopia. Tutopia is controlled by UBS, which also has
a controlling interest in IFX.

Foreign Currency Translation: The functional currency of the Company's active
subsidiaries is the local currency. Foreign currency transactions and financial
statements (except for those relating to countries with highly inflationary
economies) are translated into U.S. dollars at the rate in effect on the date of
the transaction or the date of the financial statements, except that revenues,
costs and expenses are translated at average exchange rates during each
reporting period. Resulting translation adjustments and transaction gains or
losses attributable to certain intercompany transactions that are of a long-term
investment nature are excluded from results of operations and reported in
accumulated other comprehensive income (loss), a separate component of
consolidated stockholders' equity. Gains and losses attributable to other
intercompany transactions are included in results of operations.

                                       31

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Note 3  Discontinued Operations

     Income from discontinued operations primarily consists of amounts received
under earn-out agreements that were based on the financial performance of
entities divested prior to July 1, 2000. The final payment due under such
agreements was received in December 2001 and, accordingly, the Company does not
expect to receive any additional significant earnings from its discontinued
operations.

     The following table summarizes financial information related to the
Company's discontinued operations:

<TABLE>
<CAPTION>
                                                                     Fiscal year ended June 30,
                                                             ----------------------------------------
                                                                 2002           2001         2000
                                                             -----------    -----------   -----------
<S>                                                          <C>            <C>           <C>
Income from discontinued operations before income taxes      $ 2,225,300    $ 4,359,300   $ 3,026,100

Income tax provision                                            (778,900)    (1,525,800)   (1,059,100)
                                                             -----------    -----------   -----------

Income from discontinued operations, net of income taxes     $ 1,446,400    $ 2,833,500   $ 1,967,000
                                                             ===========    ===========   ===========
</TABLE>

     The information set forth in the remaining notes to consolidated financial
statements relates to continuing operations unless otherwise specified.

Note 4  Acquisitions

     The Company completed no material acquisitions during fiscal 2002 or fiscal
2001. A majority of the Company's acquisitions were structured such that the
Company paid an agreed-upon percentage of the purchase price at closing with the
remainder of the purchase price paid 60 to 360 days after closing. During fiscal
2001, the Company settled various liabilities related to acquisition earn-out
payments that were completed prior thereto. The liabilities were satisfied
through the issuance of 733,666 shares of common stock with a fair market value
of $4.3 million and cash of $0.7 million, all of which was allocated to acquired
customer base.

Note 5  Property and Equipment

Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                                             June 30,
                                                                  -----------------------------
                                                                       2002            2001
                                                                  --------------  -------------
<S>                                                               <C>             <C>
Network and other equipment under capital lease agreements        $   6,410,400   $  19,062,500
Computer and network equipment                                        8,245,200       7,647,800
Software                                                              2,288,400       3,638,900
Furniture and fixtures                                                1,059,400       1,445,900
Leasehold improvements                                                1,048,200       1,172,500
Other                                                                   909,400       1,701,900
                                                                  -------------   -------------
                                                                     19,961,000      34,669,500
Less: accumulated depreciation and amortization                     (10,565,000)    (10,385,000)
                                                                  -------------   -------------
Property and equipment, net                                       $   9,396,000   $  24,284,500
                                                                  =============   =============
</TABLE>

     The decrease in property and equipment, net, from June 30, 2001 to June 30,
2002 is primarily attributable to the elimination of the carrying value of
assets subject to capitalized leases (arising from early payoff of the
associated obligations) and the sale of one of the Company's subsidiaries.

     Accumulated amortization of assets under capital lease agreements was
approximately $3.6 million at June 30, 2002. Amortization expense related to
capital leases is included as part of depreciation and amortization in the
consolidated statement of operations. An impairment charge of $2.4 million
against property and equipment was recorded as of June 30, 2002 in accordance
with the Company's policy regarding the impairment of long-lived assets
described in Note 2 to the consolidated financial statements.

                                       32

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Note 6   Accrued Expenses

     Accrued expenses consist of the following:

                                                        June 30,
                                              ---------------------------
                                                  2002           2001
                                              ------------   ------------
Salaries and employee benefits                $    987,300   $  1,078,800
Legal and professional fees                        509,300      1,271,800
Telecommunications services                        415,800      2,192,500
Foreign and local taxes                              9,500        146,400
All other                                          983,700        567,700
                                              ------------   ------------
       Total                                  $  2,905,600   $  5,257,200
                                              ============   ============

Note 7   Commitments

Operating and Capital Leases

     The Company maintains facilities and offices at various locations
throughout the United States and Latin America for general corporate purposes,
including technology centers, customer call centers, office space and
headquarters. Rent expense amounted to $2.1 million, $1.5 million and $2.0
million in fiscal 2002, 2001 and 2000, respectively.

     At June 30, 2002, the Company had capital lease obligations of
approximately $2.3 million. The capital leases were entered into primarily to
finance equipment and software for the Company's network.

     Future minimum payments under capital and operating leases with initial
terms of one year or more consisted of the following at June 30, 2002:

<TABLE>
<CAPTION>
                                                         Operating Lease     Capital Lease        Total
Fiscal Year                                                Obligations        Obligations      Obligations
---------------------------------------------            ----------------   --------------    -------------
<S>                                                    <C>                  <C>              <C>
2003                                                    $       5,027,600   $    2,023,400    $   7,051,000
2004                                                            4,206,200          512,800        4,719,000
2005                                                            1,960,700          131,100        2,091,800
2006                                                              224,800                -          224,800
---------------------------------------------           -----------------   --------------    -------------

Total lease obligations                                 $      11,419,300   $    2,667,300    $  14,086,600
                                                        =================                     =============
Amount representing interest                                                      (369,100)
                                                                            --------------

Present value of net minimum lease payments                                 $    2,298,200
                                                                            ==============
</TABLE>

     During fiscal 2002, the Company entered into various agreements to lease
network capacity infrastructure between Miami, Florida and several cities in
South America through separate indefeasible rights of use ("IRU") for each STM-1
circuit, with payments due over 36 months. The agreements state that the lessor
will provide the Company with portability of the STM-1s to the extent that there
is capacity on the lessor's network. At its option, the Company has the right to
terminate such agreements prior to expiration, subject to certain predefined
penalties. Future minimum payments under these agreements as of June 30, 2002
(net of amounts related to certain waived periods) are treated as operating
lease obligations, which total approximately $5.5 million. The 36-month leases
will convert into 15-year IRUs on the payment of the purchase option amount at
the end of the lease. The STM-1s are being amortized on a straight-line basis
over an estimated useful life of 10 years.

      Subsequent to June 30, 2002, the Company entered into a lease agreement
for additional network capacity for a total of approximately $4.1 million, with
payments also due over 36 months.

                                       33

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Employment agreements

     The Company has employment agreements with several of its officers. The
agreements generally require continuation of salary and provide other benefits
subsequent to termination under certain conditions or change of control of the
Company.

Note 8   Lease Obligations and Early Extinguishment of Debt

     During fiscal 2002, the Company and one of its lessors agreed to the
extinguishment of approximately $8.7 million in capital lease obligations in
exchange for the Company's payment to the lessor of approximately $2 million and
500,000 warrants to purchase shares of the Company's common stock at $1.00 per
share, subject to an anti-dilution adjustment. These warrants are immediately
exercisable and expire 10 years from date of grant. As a result of this
transaction, the Company recorded a $4.3 million gain resulting from the early
extinguishment of debt, which is included in other income in the accompanying
consolidated statement of operations. The gain was computed as the net $8.7
million reduction of lease obligations, less the estimated fair value of the
warrants granted to the lessor, the cash paid and an adjustment to the carrying
value of the related assets. The fair value of the warrants was estimated using
the Black-Scholes option valuation model.

Note 9   Litigation Contingencies

     The Company may be threatened with legal proceedings arising from its
regular business activities. On February 28, 2002, IFX do Brazil Ltda, ("IFX
Brazil") filed a lawsuit against IBM Leasing Brazil ("ILB") in the 11th Civil
Court, Sao Paulo, Brazil requesting the modification of IFX Brazil's equipment
lease agreement with ILB. The basis for the complaint by IFX Brazil was that the
leased equipment was delivered late by ILB. The complaint also stated that the
denomination of the lease in U.S. dollars resulted in an excessive exchange rate
variation in breach of the Brazilian consumption law. The object of this suit
was to obtain reduction of the contract value from approximately $568,600 to
approximately $189,500 for the return of unused equipment and compensation for
installments already paid.

     On August 18, 2002, the court denied IFX Brazil's claim and ordered IFX
Brazil to pay attorney's fees of approximately $21,700. IFX Brazil appealed the
verdict on September 3, 2002 and ILB responded to such appeal on September 30,
2002. No verdict on the appeal has been reached. On September 24, 2002, IFX
Brazil was granted an injunction to prevent ILB from registering a complaint in
Brazil that IFX Brazil was in default on the lease until there is a final
decision on the appeal. Such injunction is subject to ILB response, which is
expected by October 31, 2002.

    On June 3, 2002, ILB demanded payment of $939,200 from IFX under the
Continuing Contract of Parent Guaranty of Payment dated September 29, 2000
between IFX and ILB. IFX has not responded to this demand pending resolution of
the lawsuit in Brazil. There can be no assurances as to the outcome of this
litigation. Based on the advice of legal counsel, the Company has recorded
certain accruals to provide for this contingency.

    In addition, the Company is a defendant in, and may be threatened with,
various legal proceedings arising from its regular business activities.
Management, after consultation with legal counsel, is of the opinion that the
ultimate liability, if any, resulting from any pending action or proceedings
will not have a material effect on the financial position or results
of operations of the Company.

Note 10  Stockholders' Equity

Common Stock

     At June 30, 2002, approximately 4,631,790 shares of the Company's common
stock were reserved for issuance upon exercise of stock options. In addition,
500,000 warrants were granted in fiscal 2002 and 210,000 warrants were granted
in fiscal 1999, all of which remain outstanding at June 30, 2002.

     During fiscal 2001, IFX issued 6,000, 733,666 and 241,646 shares of common
stock to settle contract termination costs, acquisition-related liabilities and
stock grants associated with compensation arrangements, respectively.

Preferred Stock

     The Company is authorized to issue shares of preferred stock in series with
such preferences and designations as the Company's Board of Directors may
determine. The Board can, without shareholder approval, issue preferred stock
with voting, dividend, liquidation, and conversion rights. The issuance of
preferred stock may dilute the voting strength of the holders of the common
stock and may help IFX's management impede a takeover or attempted change in
control.

     Pursuant to the provisions of FASB's Emerging Issues Task Force No. D-98,
"Classification and Measurement of Redeemable Securities," the Company had
determined that as of December 31, 2001, its preferred stock could be considered
redeemable under certain circumstances that were beyond its control. This
resulted in the reporting of the Company's preferred stock outside of
stockholders' equity as of December 31, 2001 and March 31, 2002. However,
subsequent to March 31, 2002, the Company received a waiver of certain terms of
the Company's Certificates of Designation from the preferred shareholders that
resulted in the preferred stock being classified within stockholders' equity as
of June 30, 2002.

                                       34

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     As of June 30, 2002, the Company had the following equity instruments that
were convertible into shares of IFX common stock. Such instruments and the
common shares into which they are convertible are as follows:

<TABLE>
<CAPTION>
                                                                                    Number of common shares the
                                                     Shares/units outstanding    shares/units are convertible into
                                                    --------------------------  -----------------------------------
<S>                                                 <C>                         <C>
Series A Convertible Preferred                              2,030,869                        8,326,563
Series B Convertible Preferred                              4,418,262                        5,156,112
Series C Convertible Preferred                              3,126,241                        3,126,241
Series D Convertible Preferred                              6,432,608                       12,865,216
Warrants                                                      710,000                          710,000
Options                                                     3,269,585                        3,269,585
Tutopia Put Option                                         10,185,683                       10,185,683
                                                                                -----------------------------------
     Total                                                                                  43,639,400
                                                                                ===================================
</TABLE>

     At June 30, 2002, the Company's Series A, Series B, Series C and Series D
preferred stock had a liquidation preference of approximately $95 million
(including 10% per annum liquidation preference return).

Fiscal 2002 Transactions

     As reported on the Company's Report on Form 8-K dated February 19, 2002,
and pursuant to the Stock Purchase Agreement ("Series C Purchase Agreement")
dated as of October 11, 2001, UBS Capital Americas III, L.P. and UBS Capital LLC
(collectively, "UBS"), invested $7.0 million of cash and surrendered 1.5 million
shares of IFX's common stock in exchange for 3,876,241 shares of the IFX Series
C preferred stock. Prior to the closing of the Series C preferred round, UBS had
advanced IFX $5.5 million through February 18, 2002 in exchange for 10%
convertible notes. Upon the closing of the Series C investment, the 10%
convertible notes were automatically converted to Series C preferred shares.
Each share of Series C preferred stock is convertible into one share of common
stock. The Series C preferred stock carries a liquidation preference such that,
upon a bankruptcy, liquidation, dissolution or unwinding of IFX, each holder of
Series C preferred stock will be entitled to receive $3.00 per share plus 10% of
such amount per annum from the date of issuance (the "Stated Preference") and
will also participate with the holders of common stock after holders' of the
Company's preferred stock receive their liquidation preference and accrued
dividends, provided that the maximum amount that can be received with respect to
the Series C preferred after taking into account the Participation Feature is
limited to 3 1/2 times the Stated Preference.

     The Series C investment caused the conversion ratio of the approximately 2
million shares of Series A preferred stock held by UBS to be adjusted so that
each share of Series A preferred stock is convertible into approximately 4.1
shares of common stock, rather than 3.52 shares of common stock as previously
provided. This investment also caused the conversion ratio of the approximately
4.4 million shares of Series B preferred stock held by UBS to be adjusted so
that each share of Series B preferred stock would be convertible into
approximately 1.167 shares of common stock, rather than one share of common
stock as originally provided. The change in conversion ratio of the Series B
preferred stock does not result in a beneficial conversion feature since the
conversion price remains greater than the market price of the Company's common
stock on the date the Series B preferred stock was originally sold. No
beneficial conversion feature was recognized on the Series A preferred stock
since previous adjustments to the conversion ratio of the Series A preferred
stock resulted in recognition of a beneficial conversion in a prior period which
equaled the proceeds received from the original sale of the Series A preferred
stock. The terms of both the Series A and B preferred stock were amended to add
the same limited Participation Feature as in the Series C preferred stock. As
part of this transaction, IFX provided a put right to UBS and the other Tutopia
preferred and common shareholders providing them the ability to exchange their
equity investment in Tutopia for like shares of IFX's preferred ("New Preferred
Stock") or common stock at an exchange ratio of approximately 0.70 shares of IFX
for each share of Tutopia within one year of closing (the "Put Option"), which
date is February 18, 2003. In general, the New Preferred Stock will have the
same terms as the Company's Series C preferred stock, except that the New
Preferred Stock will not have a Participation Feature.

     As a result of the Put Option, holders of Tutopia's shares can exchange
their shares for approximately 0.8 million shares of IFX Series D Preferred
Stock and 8.5 million shares of a to-be issued class of IFX preferred stock.
Such to-be issued IFX preferred shares will have substantially the same terms as
the Company's Series C preferred stock, except that the to-be issued shares will
not have the "participation" features contained in the Series C preferred stock.
The Company computed the estimated value of the Put Option using the Black
Scholes option valuation model and the following assumptions: risk-free interest
rate 1.7%, dividend yield 0%, and an expected life of 1 year. The $1.6 million
estimated fair value of the Put Option issued to Tutopia shareholders that are
also IFX preferred shareholders was recorded as additional paid-in capital and
resulted in a discount to the IFX Series C preferred stock. The Black Scholes
valuation model requires the input of highly subjective assumptions, such as the
expected stock price volatility, and the estimated fair value may not
necessarily represent amounts that could be realized in a current transaction.
The discount on the Series C preferred shares did not result in a beneficial
conversion feature since the intrinsic conversion price of the Series C
preferred shares remained greater than the market price of the

                                       35

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Company's common stock on the date the Series C preferred shares were sold. The
terms of the Put Option were later amended in connection with the Series D
financing so that holders of Tutopia common shares could convert such shares
into IFX preferred shares rather than IFX common shares as provided for in the
original Put Option.

     Under the terms of the Certificates of Designation for the Company's
Convertible Preferred Stock and the Third Amended and Restated Stockholders
Agreement dated as of February 19, 2002, among IFX, UBS Capital, International
Technology Investments, LC, ("ITI"), Joel Eidelstein (IFX's President), Michael
Shalom (IFX's CEO) and Lee S. Casty ("Casty") (the "Third Stockholders
Agreement"), IFX's Board of Directors was reduced to seven members from eight
(George Myers resigned as a member of the Board of Directors) and UBS Capital is
entitled to appoint four out of seven members of the Board of Directors. UBS
also has the right to jointly designate a fifth director in conjunction with ITI
and Casty. Casty and ITI each have the right to appoint one director. Prior to
the issuance of the Series C Preferred Stock and the execution of the Third
Stockholders Agreement, UBS had the right to appoint three members of an eight
member Board of Directors and to jointly designate a fourth director in
conjunction with ITI and Casty. After the issuance of the Series C Preferred
Stock as reported in Form 8-K filed on October 22, 2001 and February 27, 2002,
UBS capital owned approximately 57% of the voting shares of IFX (assuming
conversion of all Company convertible preferred stock into common stock).

     Pursuant to the Stock Purchase Agreement dated as of February 19, 2002, UBS
Capital, ITI, LSC, LLC ("LSC"), and Jak Bursztyn ("Bursztyn") (collectively with
UBS Capital, the "Purchasers") agreed to invest a total of $5 million and
surrender 750,000 shares of IFX Series C preferred stock and 684,000 shares of
IFX Common Stock in exchange for 6,432,608 shares of IFX's Series D Convertible
Preferred Stock ("Series D Preferred Stock"). LSC is an affiliate of Casty and
ITI is an affiliate of Michael Shalom. Prior to the closing of the Series D
preferred round, the Purchasers had advanced IFX $3.4 million in exchange for
10% convertible notes. Upon the closing of the Series D investment, the 10%
notes were automatically converted to Series D preferred shares. Each share of
Series D Preferred Stock is convertible into two shares of the Company's common
stock. The Series D Preferred Stock carries a liquidation preference such that,
upon a bankruptcy, liquidation, dissolution or winding up of the Company, each
holder of Series D Preferred Stock will be entitled to receive a Stated
Preference of $6.00 per share plus 10% of such amount per annum from the date of
issuance and will also participate with the holders of common stock after the
holder of the Company's preferred stock receive their liquidation preference and
accrued dividends, provided that the maximum amount which can be received with
respect to the Series D Preferred Stock after taking into account the
Participation Feature is limited to 3-1/2 times the Stated Preference. This
round closed on June 28, 2002, as reported on the Form 8-K filed on July 3,
2002.

     In this transaction, UBS Capital invested approximately $3.33 million in
cash and surrendered 750,000 shares of Series C Preferred Stock in exchange for
4,652,778 shares of Series D Preferred Stock. Each of ITI and LSC invested
approximately $0.8 million in cash and surrendered approximately 333,000 shares
of Common Stock in exchange for 843,808 shares of Series D Preferred Stock.
Bursztyn invested approximately $47,000 in cash and surrendered approximately
10,000 shares of Common Stock in exchange for 43,273 shares of Series D
Preferred Stock.

     As part of the Series D transaction, the Company amended the Put Option so
that for one year from February 18, 2002, the Purchasers are entitled to
exchange their shares of Tutopia Series B Preferred Stock for up to
approximately 830,000 shares of IFX Series D Preferred Stock. As a result
thereof, UBS Capital is entitled to exchange the shares of Tutopia, which it
currently owns for up to 5,610,000 shares of new preferred stock to be issued by
the Company. Holders of Tutopia Series A Preferred Stock and certain other
common stockholders of Tutopia are able to exchange their Tutopia shares for up
to approximately 1,300,000 shares of new preferred stock.

     After the purchase of the Series D Preferred Stock, UBS owns approximately
63% of the voting shares of IFX (assuming conversion of all Company convertible
preferred stock into common stock).

     Assuming conversion of all outstanding preferred shares and issued but
unexercised warrants and options, IFX would have approximately 43.6 million
shares of Common Stock outstanding at June 30, 2002. On June 27, 2002, IFX
amended its Restated Certificate of Incorporation to increase the number of
shares of common stock authorized from 60 million to 110 million and increase
the number of shares of preferred stock authorized from 20 million to 40
million.

                                       36

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Fiscal 2001 Transactions

     As reported on the Company's Reports on Forms 8-K dated March 16, 2001 and
May 10, 2001, the Company received approximately $15.4 million in funding from
UBS Capital Americas III, L.P. and UBS Capital LLC (collectively, the
"Purchasers"), to be used for working capital purposes. Pursuant to the Stock
Purchase Agreement dated as of March 16, 2001, by and among the Company and the
Purchasers, as amended by Amendment No.1 to the Stock Purchase Agreement dated
as of March 16, 2001, the Purchasers purchased 3,994,127 shares of IFX's Class I
Series B Convertible Preferred Stock and 424,135 shares of IFX's Class II Series
B Convertible Preferred Stock on May 7, 2001. All of the shares were sold at
$3.50 per share. The Class I Series B Convertible Preferred Stock has full
voting rights and each preferred share was initially convertible into one share
of IFX's common stock. The Class II Series B Convertible Preferred Stock has the
same rights as the Class I Series B Convertible Preferred Stock except that it
may not vote for the Board of Directors. At the election of Purchasers, each
share of the Class II Series B Convertible Preferred Stock is convertible after
one year into one share of Class I Convertible Preferred Stock.

     Under the terms of the Series A Preferred Stock previously issued by IFX,
the Series B investment caused the conversion ratio of the approximately 2
million shares of Series A Preferred Stock held by the Purchasers to be adjusted
so that each share of Series A Preferred Stock would be convertible into
approximately 3.52 shares of the Company's common stock, rather than one share
of the Company's common stock as originally provided. The Series A conversion
ratio adjustment resulted in a beneficial conversion feature of approximately
$25 million. Such amount was recognized as a deemed dividend to the preferred
shareholders in May 2001.

     IFX issued 2,030,869 shares of IFX Class I Series A Preferred Stock and IFX
Class II Series A Preferred Stock to UBS Capital Americas III, L.P. and UBS
Capital LLC in exchange for $25 million. Each share was initially exchangeable
for one share of common stock, subject to adjustment if IFX issues shares of
common stock (or certain common stock equivalents as discussed above) at less
than $3.50 per share. Each share of preferred stock has a liquidation preference
equal to the sum of: a) $12.31 per share and b) $1.231 for each year that the
preferred share is outstanding. The liquidation preference is payable both on a
liquidation of IFX as well as a merger, recapitalization, reorganization, sale
of voting control to a single buyer or a group of related buyers in one or a
series of related transactions, or other business combination transaction
involving IFX in which the shareholders of IFX immediately prior to the
consummation of such transaction do not own at least a majority of the
outstanding shares of the surviving corporation or IFX (as applicable)
immediately following the consummation of such transaction or sale of all or
substantially all of the assets of IFX. Dividends accrue on the shares at the
same rate that dividends accrue on shares of IFX common stock if and when
declared by the Company's Board of Directors.

                                       37

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Investment in Tutopia.com, Inc.

     At June 30, 2002, the Company reduced the carrying value of its investment
in the Series A preferred shares of Tutopia by approximately $1.7 million to
$0.4 million to reflect its estimated fair value. At that date, the Company
owned approximately 48% of Tutopia.

     Upon closing of the sale of the IFX Series B Preferred Stock to the
Purchasers in May 2001, the Purchasers and IFX invested approximately $1.8
million and $3.2 million, respectively, in Series A Convertible Preferred Stock
of Tutopia. After the investment, the Company's voting interest in Tutopia
remained at less than 50% of Tutopia's outstanding shares.

     In fiscal 2001, UBS Capital Americas and certain other shareholders of the
Company invested a total of $20 million in Tutopia in exchange for Series A
Preferred Stock of Tutopia. Immediately following these investments, assuming
the exchange of all of the Series A Preferred Stock for Tutopia common stock,
IFX indirectly owned approximately 48% of the outstanding stock of Tutopia.
Also, the majority of the owners of the Series A Convertible Preferred Stock
received the right to appoint a majority of the directors of Tutopia.

Note 11  Stock-Based Compensation Plans

Directors Stock Option Plan

     In November 1999, the Company's shareholders approved the IFX Corporation
Directors Stock Option Plan (the "Directors Plan"). In general, the Directors
Plan provides that each non-employee eligible director automatically will
receive an option to purchase (i) 450 shares of Common Stock upon such
director's initial election to the Board of Directors of the Company, provided
such director is elected after the effective date of the Directors Plan, and
(ii) for each year thereafter and on the date of each annual meeting of the
stockholders of the Company, 450 shares of Common Stock for service as a
director and 75 shares of Common Stock for each Committee of the Board of
Directors upon which such director serves.

Employee Stock Option Plan

     In November 1999, the Company approved an amendment to the IFX Corporation
1998 Stock Option and Incentive Plan (the "Option Plan") to increase the number
of shares of common stock available for issuance under the Option Plan from
900,000 to 1,800,000. In June 2000, the Company's shareholders voted to increase
the size of the Option Plan by an additional 600,000 shares and an additional
600,000 shares were reserved for issuance pursuant to the 1998 Stock Option
Plan. Generally, options vest over three years, with one-third vesting after
the first year, and the balance vesting ratably on a quarterly basis over the
remaining two years.

     In connection with the granting of stock options to employees in fiscal
2000, the Company recorded deferred compensation of approximately $17.2 million.
Deferred compensation is being amortized for financial reporting purposes over
the vesting period of the options. The amount recognized as expense during
fiscal 2002, 2001 and 2000 amounted to approximately $4.1 million, $4.9 million
and $5.2 million, respectively. No options were granted in 2001 for which
compensation expense was recorded. No options were granted in fiscal 2002.

In connection with the sale of the Series B Preferred Stock in May 2001, the
Company: (i) amended the Option Plan to, among other things, increase the number
of shares of common stock available for issuance under the Option Plan to
4,631,790 shares of common stock and (ii) adopted the IFX Corporation 2001 Stock
Option Plan (the "2001 Plan"). Options under the 2001 Plan are exercisable for
10 years after the date of grant and rest on June 30, 2006, subject to
acceleration under certain circumstances. The following table summarizes the
Company's stock option activity:

                                       38

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


                                                            Weighted Average
                                             Shares          Exercise Price
                                           ----------       ----------------
          Outstanding at June 30, 1999        442,500         $     5.97

          Granted                           1,896,167              12.54

          Cancelled                           (34,750)             18.21

          Exercised                            (9,033)              9.71
                                           ----------

          Outstanding at June 30, 2000      2,294,884              10.05

          Granted                             826,450               4.68

          Cancelled                          (165,518)             17.98
                                           ----------
          Outstanding at June 30, 2001      2,955,816               9.28

          Cancelled                          (396,231)             11.61
                                           ----------

          Outstanding at June 30, 2002      2,559,585               8.92
                                           ==========

     The following table summarizes information concerning outstanding options
at June 30, 2002:

<TABLE>
<CAPTION>
                                                  Weighted Average
                                   Weighted          Remaining
  Exercise Price    Number of      Average        Contractual Life       Shares      Weighted Average
      Range          Shares     Exercise Price       (in years)        Exercisable    Exercise Price
------------------------------------------------------------------------------------------------------
<S>                   <C>           <C>                 <C>              <C>              <C>
 $ 3.00 to 5.00       841,950       $ 3.32              8.0              225,333          $ 3.00
   5.01 to 10.00    1,078,134         8.75              7.8               94,141            7.85
  10.01 to 15.00      346,166        14.00              7.1               98,000           13.16
  15.01 to 20.00      273,335        19.13              7.4               52,500           18.58
  20.01 to 30.00       20,000        26.25              7.2               20,000           26.25
                   ----------                                          ---------
                    2,559,585       $ 8.92              7.7              489,974          $ 8.58
                   ==========                                          =========
</TABLE>

Statement of Financial Accounting Standards No. 123

     The Company has elected to account for its stock-based compensation plans
under APB No. 25; however, the Company has computed for pro forma disclosure
purposes the estimated fair value of all options granted using the Black-Scholes
option-pricing model as prescribed by SFAS No. 123, using the following
weighted-average assumptions:

                                           Fiscal year ended June 30,
                                     -------------------------------------
                                         2002         2001         2000
                                     -------------------------------------
         Risk-Free Interest Rate         __          5.65%        6.00%
         Expected Dividend Yield         __          0.00%        0.00%
         Expected Lives                  __        5.0 years    5.0 years
         Expected Volatility             __          1.01         0.96

     The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options that have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options. The per share
weighted average fair value of options granted during fiscal 2001 and 2000 was
$9.28 and $10.05, respectively. No options were granted during fiscal 2002.

                                       39

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     The Company's pro forma information is as follows:

<TABLE>
<CAPTION>
                                                                 Fiscal year ended June 30,
                                                   ------------------------------------------------------
                                                          2002               2001               2000
                                                   ------------------------------------------------------
          <S>                         <C>            <C>                <C>                <C>
          Net loss                    As reported    $ (24,597,100)     $ (58,355,200)     $ (45,877,000)
                                      Pro forma      $ (28,929,700)     $ (68,950,700)     $ (55,119,000)

          Basic and diluted loss      As reported    $       (1.79)     $       (4.24)     $       (4.52)
          per share                   Pro forma      $       (2.11)     $       (5.00)     $       (5.43)
</TABLE>

Note 12  Segment Reporting

     The Company is structured primarily around the geographic markets it serves
and operates reportable segments in Argentina, Brazil, Chile, Colombia, Mexico,
Venezuela, Central America and United States and all other. All of the segments
provide Internet related services. Selected financial information for the years
ended June 30, 2002, 2001 and 2000 by segment is presented below (in thousands):

<TABLE>
<CAPTION>
                                                                                           Central  United States
                           Argentina   Brazil     Chile    Colombia   Mexico   Venezuela   America  and all other     Total
                           ---------  --------  ---------  --------  --------  ---------  --------- -------------  -----------
<S>                        <C>        <C>       <C>        <C>       <C>        <C>        <C>        <C>           <C>
2002

Total revenues             $   4,356  $  6,546  $   3,936  $  3,207  $  2,515   $  2,358   $  2,912   $  2,321      $ 28,151
                           =========  ========  =========  ========  ========   ========   ========   ========      ========
Income (loss) from
  continuing operations
  before income taxes      $     160  $ (5,131) $     362  $     15  $ (1,838)  $ (1,649)  $ (1,516)  $(17,225)     $(26,822)
                           =========  ========  =========  ========  ========   ========   ========   ========      ========

Total assets               $     846  $  6,477  $   1,328  $  1,711  $  1,230   $    979   $  1,070   $  4,294      $ 17,935
                           =========  ========  =========  ========  ========   ========   ========   ========      ========
2001

Total revenues             $   3,767  $  5,725  $   3,843  $  1,945  $  3,999   $  2,730   $  2,170   $  7,943      $ 32,122
                           =========  ========  =========  ========  ========   ========   ========   ========      ========
Loss from
  continuing operations
  before income taxes      $  (1,910) $(11,365) $  (2,806) $ (1,301) $ (4,692)  $ (1,703)  $ (3,236)  $(35,702)     $(62,715)
                           =========  ========  =========  ========  ========   ========   ========   ========      ========

Total assets*              $   2,615  $  7,145  $   1,823  $  1,554  $  3,892   $  2,111   $  1,498   $ 27,886      $ 48,524
                           =========  ========  =========  ========  ========   ========   ========   ========      ========
2000

Total revenues             $      70  $  3,767  $   1,974  $    120  $  1,462   $  1,633   $    551   $  1,112      $ 10,689
                           =========  ========  =========  ========  ========   ========   ========   ========      ========
Loss from
  continuing operations
  before income taxes      $  (3,227) $ (4,814) $  (1,965) $ (1,128) $ (2,805)  $   (574)  $ (1,290)  $(34,812)     $(50,615)
                           =========  ========  =========  ========  ========   ========   ========   ========      ========

Total assets*              $     988  $ 10,178  $   5,695  $    884  $  6,830   $  2,711   $  2,961   $ 31,050      $ 61,297
                           =========  ========  =========  ========  ========   ========   ========   ========      ========
</TABLE>

* Allocation of total assets between the reportable segments as of June 30, 2001
and 2000 has been reclassified to conform to the presentation as of June 30,
2002.

     Total revenues include sales to Tutopia of approximately $7.2 million and
$13.8 million for fiscal 2002 and 2001, respectively. Sales to Tutopia
represented approximately 25.6% and 43.1% of IFX's total revenues for the fiscal
years ended June 30, 2002 and 2001, respectively. A portion of the increase in
revenues generated by the segments in Argentina, Chile and Colombia from fiscal
2001 to fiscal 2002 is attributable to the Company's revenue sharing
arrangements.

     Subsequent to June 30, 2002, the Company decided to sell or otherwise
dispose of the operations that comprise its Central American reportable segment.
The Company is in the process of selling its operations in three of the four
countries - i.e., El Salvador, Honduras and Nicaragua. While no assurances can
be made regarding consummation of the proposed transaction, the Company does
expect to complete the sale during the quarter ended December 31,

                                       40

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

2002. For the year ended June 30, 2002, the revenues and loss from continuing
operations before income taxes of the three operations to be sold were $1.8
million and $0.7 million, respectively. At June 30, 2002, the total assets of
these operations were $0.7 million.

Note 13  Foreign Taxes Recoverable

     In general, IFX's foreign subsidiaries pay a Foreign Value Added Tax
("VAT") on their purchases. At June 30, 2002, the Company had approximately $1.2
million of foreign taxes recoverable that it expects to realize in the future as
revenues increase.

Note 14  Income Taxes

     The Company accounts for income taxes under SFAS No. 109, "Accounting for
Income Taxes". Deferred income tax assets and liabilities are determined based
upon differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.

     The income tax benefit relating to each of the years ended June 30, 2002,
2001 and 2000 is as follows:

<TABLE>
<CAPTION>
                                                        Fiscal year ended June 30,
                                             ----------------------------------------------
                                                 2002             2001           2000
                                             --------------   -------------- --------------
                <S>                          <C>              <C>            <C>
                Current                      $      778,900   $    1,525,800 $    2,771,400
                Deferred                                 -                -              -
                                             --------------   -------------- --------------
                Total Income Tax Benefit     $      778,900   $    1,525,800 $    2,771,400
                                             ==============   ============== ==============
</TABLE>

     The income tax benefit reflected is primarily due to the utilization of net
operating losses income tax ("NOL's") against income from discontinued
operations.

     Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's net deferred income taxes are as follows:

<TABLE>
<CAPTION>
                                                                    At June 30,
                                                       -----------------------------------
                                                             2002              2001
                                                       -----------------  ----------------
                <S>                                   <C>                <C>
                DEFERRED TAX ASSETS:
                Bad debt provision                    $            -     $        684,600
                Depreciation                               2,349,400               73,700
                Accruals                                       7,800               98,400
                Amortization expense                       3,837,500            4,357,300
                Gain on investment                                 -            2,639,900
                Impairment of acquired customer base       4,408,300            3,614,400
                Deferred compensation                      4,946,600                    -
                Tax credits                                  761,400              761,400
                NOL carry-forward                         25,583,000           19,298,200
                Property and equipment impairment            915,900                    -
                Tutopia investment                           629,200                    -
                                                       --------------     ----------------
                Deferred tax assets                       43,439,100           31,527,900
                Less: valuation allowance                (43,422,700)         (31,325,900)
                                                       --------------     ----------------
                Total deferred tax assets                     16,400              202,000
                                                       --------------     ----------------
                Deferred tax liabilities:
                Other liabilities                            (15,000)            (202,000)
                Bad debt provision                            (1,400)                   -
                                                       --------------     ----------------
                Total deferred tax liabilities               (16,400)            (202,000)
                                                       --------------     ----------------
                Total net deferred taxes              $            -     $              -
                                                       ==============     ================
</TABLE>

                                       41

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     SFAS No. 109 requires a valuation allowance to reduce the deferred tax
assets reported if, based on the weight of the evidence, it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
After consideration of all the evidence, management has determined that a $43.4
million valuation allowance as of June 30, 2002 is necessary to reduce the net
deferred tax asset to an amount that will more likely than not be realized. The
increase in the valuation allowance for the current year is $12.1 million. At
June 30, 2002, the Company has available net operating loss carryforwards as
follows:

      Losses expiring in fiscal 2003-2005
      -----------------------------------
      El Salvador                                              $       (548,400)
      Guatemala                                                      (1,142,600)
      Costa Rica                                                       (484,600)
      Honduras                                                         (991,800)
      Uruguay                                                          (651,900)
      Venezuela                                                      (3,534,900)

      Losses expiring in fiscal 2004-2007
      -----------------------------------
      Nicaragua                                                $       (462,800)
      Argentina                                                        (691,600)
      Colombia                                                       (2,260,900)
      Panama                                                           (997,200)

      Losses expiring after 2011
      --------------------------
      Mexico                                                   $     (6,298,100)
      United States                                                 (67,985,700)

      Losses with indefinite life:
      ----------------------------
      Bolivia                                                  $     (1,852,400)
      Brazil                                                        (11,779,900)
      Chile                                                          (2,320,000)

     The United States and foreign components of loss from continuing operations
before income taxes are as follows:

<TABLE>
<CAPTION>
                                            Fiscal year ended June 30,
                             -----------------------------------------------------------
                                    2002                 2001                2000
                             ------------------   ------------------  ------------------
<S>                         <C>                  <C>                 <C>
      United States         $     (18,381,000)   $     (43,970,000)  $      (24,775,900)
      Foreign                      (8,441,400)         (18,744,500)         (25,839,500)
                             ------------------   ------------------  -------------------
      Total                 $     (26,822,400)   $     (62,714,500)  $      (50,615,400)
                             ==================   ==================  ===================
</TABLE>

     Reconciliation of the total provision for income taxes to the Federal
statutory rate is as follows:

<TABLE>
<CAPTION>
                                                                Fiscal year ended June 30,
                                                    --------------------------------------------------
                                                         2002               2001             2000
                                                    ----------------   ---------------   -------------
<S>                                                         <C>               <C>           <C>
      Tax at U.S. statutory rate                            (34.0)   %        (34.0)  %     (34.0)   %
      State taxes, net of federal benefit                    (4.0)             (3.0)         (2.0)
      Stock option expense                                  (14.0)              3.0           3.0
      Warrant expense                                           -                 -           1.0
      Other                                                  (1.0)              1.0            --
      Change in valuation allowance                          50.0              30.0          27.0
                                                    ----------------   ---------------   -------------
                                                             (3.0)   %         (3.0)  %      (5.0)   %
                                                    ================   ===============   =============
</TABLE>

                                       42

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Note 15  Related Party Transactions

     The Company believes that all transactions disclosed below and in other
notes have been, and the Company's Board of Directors intends that any future
transactions with its officers, directors, affiliates or principal stockholders
will be, on terms that are no less favorable to the Company than those that are
obtainable in arm's length transactions with unaffiliated third parties.

UBS Capital Americas: On an as converted basis at June 30, 2002, UBS Capital
owned approximately 63% of the Company and approximately 37% of the Company's
investee, Tutopia. During fiscal 2002, 2001 and 2000 UBS Capital made
significant investments in both the Company and Tutopia as more fully discussed
in Note 10. Sales to Tutopia accounted for 25.6% and 43.1% of the Company's
total sales for fiscal 2002 and 2001, respectively. Tutopia was a consolidated
subsidiary of the Company during fiscal 2000 (see Note 16) and was
deconsolidated from the operations of the Company in September 2000. Tutopia had
revenues of approximately $8.5 million in fiscal 2002, $2.1 million in fiscal
2001 and nominal revenues in fiscal 2000. To date, Tutopia has been dependent in
part upon funding from UBS and the Company to pay for the services provided by
IFX. Should UBS or the Company be unwilling or unable to make additional
investments, or should Tutopia be unable to pay the Company through its
operations, the financial condition and operating results of the Company would
be seriously impacted.

     Mr. Capone and Mr. Duarte are partners and Mr. Lama is a principal of UBS
Capital Americas, LLC, an affiliate of UBS Capital Americas III, L.P. and UBS
Capital LLC, which together have made significant investments in both IFX and
Tutopia in the period June 2000 to June 2002. Mr. Capone, Mr. Duarte and Mr.
Lama have an investment interest in UBS and thus may benefit from transactions
between UBS on the one hand and IFX and its subsidiaries on the other.

UBS Capital Investment in IFX: As reported on the Company's Reports on Forms 8-K
dated March 16, 2001 and May 10, 2001, the Company received approximately $15.4
million in funding from UBS Capital Americas III, L.P. and UBS Capital LLC
(collectively, the "Purchasers"), to be used for working capital purposes.
Pursuant to the Stock Purchase Agreement dated as of March 13, 2001, by and
among the Company and the Purchasers, as amended by Amendment No. 1 to the Stock
Purchase Agreement dated as of May 7, 2001, the Purchasers purchased 3,994,127
shares of IFX's Class I Series B Convertible Preferred Stock and 424,135 shares
of IFX's Class II Series B Convertible Preferred Stock on May 7, 2001. All of
the shares were purchased at $3.50 per share. The Class I Series B Convertible
Preferred Stock has full voting rights and each preferred share is convertible
into one share of the IFX's common stock. The Class II Series B Convertible
Preferred Stock has the same rights as the Class I Series B Convertible
Preferred Stock except that it may not vote for the Board of Directors. At the
election of Purchasers, each share of the Class II Series B Convertible
Preferred Stock is convertible after one year into one share of Class I
Convertible Preferred Stock. Under the terms of the Series A Preferred Stock
previously issued by IFX, this investment caused the conversion ratio of the
approximately 2 million shares of Series A Preferred Stock held by the
Purchasers to be adjusted so that each share of Series A Preferred Stock will be
convertible into approximately 3.52 shares of the IFX's common stock, rather
than one share of the IFX's common stock as originally provided. The Series B
conversion ratio adjustment resulted in a beneficial conversion feature of
approximately $25 million. Such amount was recognized as a dividend to preferred
shareholders in May 2001.

     As discussed in Forms 8-K filed on October 22, 2001 and February 27, 2002,
pursuant to a Stock Purchase Agreement dated as of October 11, 2001, UBS Capital
Americas III, L.P. and UBS Capital LLC (referred to herein collectively as
"UBS") agreed to invest an additional $7 million of cash and surrender 1.5
million shares of IFX's common stock currently held by UBS in exchange for
approximately 3.8 million shares of IFX Series C preferred stock. Each share of
Series C preferred stock will initially be convertible into one share of common
stock. The Series C preferred stock carries a liquidation preference such that,
upon a bankruptcy, liquidation, dissolution or unwinding of IFX, each holder of
Series C preferred stock will be entitled to receive $3.00 per share plus 10% of
such amount per annum from the date of issuance (the "Stated Preference") and
will also participate with the holders of common stock after UBS receives their
liquidation preference and accrued dividends, provided that the maximum amount
which can be received with respect to the Series C preferred stock after taking
into account the Participation Feature is limited to 3-1/2 times the Stated
Preference.

     Prior to the closing of the Series C preferred round, UBS advanced funds to
the Company in exchange for 10 percent convertible notes which were
automatically converted to Series C preferred shares on closing. This

                                       43

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

investment caused the conversion ratio of the approximately 2 million shares of
Series A preferred stock held by UBS to be adjusted so that each share of Series
A preferred stock is convertible into approximately 4.1 shares of common stock,
rather than 3.52 shares of common stock as currently provided. This investment
also caused the conversion ratio of the approximately 4.4 million shares of
Series B preferred stock held by UBS to be adjusted so that each share of Series
B preferred stock is convertible into approximately 1.167 shares of common
stock, rather than one share of common stock as originally provided. The change
in conversion ratio did not result in a beneficial conversion feature since the
conversion price remained greater than the market price of the Company's
common stock on the date the Series B preferred stock was originally sold. No
beneficial conversion feature will be recognized on the Series A preferred stock
since previous adjustments to the conversion ratio of the Series A preferred
stock resulted in recognition of a beneficial conversion in a prior period which
equaled the proceeds received from the original sale of the Series A preferred
stock. The terms of both the Series A and B preferred stock were amended to add
the same limited participation feature as in the Series C preferred stock. As
part of this transaction, IFX also provided to UBS and the other Tutopia
preferred and common shareholders the ability to exchange their equity
investment in Tutopia (in which IFX holds a minority investment) for additional
shares of IFX's preferred and common stock at a price of $3.00 per share within
one year of closing. After the purchase of the Series C preferred stock, UBS
owned approximately 57% of the common shares of IFX (assuming conversion of all
the Company's convertible preferred stock into common stock) and therefore UBS
is entitled to appoint a majority of the Company's Board of Directors. After the
close of this investment, IFX would have had approximately 30 million shares of
Common Stock outstanding if all of the Company's outstanding convertible
preferred stock were converted into common stock.

     On June 28, 2002, pursuant to a Stock Purchase Agreement dated as of
February 19, 2002, UBS, International Technology Investments LC ("ITI"), LSC,
LLC ("LSC"), and Jak Bursztyn ("Bursztyn") (collectively, the "Purchasers")
agreed to invest a total of $5 million and surrender shares of IFX's preferred
stock and common stock in exchange for 6,432,608 shares of IFX's Series D
Convertible Preferred Stock ("Series D Preferred Stock"). ITI is an affiliate of
Michael Shalom and LSC is an affiliate of Lee Casty. Each share of Series D
Preferred Stock is convertible into two shares of IFX's common stock. The Series
D Preferred Stock carries a liquidation preference such that, upon a bankruptcy,
liquidation, dissolution or winding up of IFX, each holder of Series D Preferred
Stock will be entitled to receive a Stated Preference of $6.00 per share plus
10% of such amount per annum from the date of issuance and will also participate
with the holders of common stock after the Purchasers receive their liquidation
preference and accrued dividends, provided that the maximum amount which can be
received with respect to the Series D Preferred Stock after taking into account
the Participation Feature is limited to 3-1/2 times the Stated Preference. In
this transaction, UBS invested approximately $3.33 million in cash and
surrendered 750,000 shares of Series C Preferred Stock in exchange for 4,652,778
shares of Series D Preferred Stock. Each of ITI and LSC invested approximately
$812,500 in cash and surrendered approximately 333,000 shares of common stock in
exchange for 843,808 shares of Series D Preferred Stock. Bursztyn invested
approximately $47,000 in cash and surrendered approximately 10,000 shares of
common stock in exchange for approximately 43,273 shares of Series D Preferred
Stock. IFX would now have approximately 41.5 million shares of common stock
outstanding assuming all of IFX's convertible preferred stock were converted
into common stock. On June 27, 2002, IFX amended its Restated Certificate of
Incorporation to increase the number of shares of common stock authorized from
60 million to 110 million and increase the number of shares of preferred stock
authorized from 20 million to 40 million.

Investment in Yupi Internet, Inc.("Yupi"): Pursuant to an Amended and Restated
Stock Purchase Agreement, dated June 2000 between IFX Online, a subsidiary of
the Company, and Lee Casty, a significant stockholder of IFX, IFX Online sold a
part of its shares of Yupi Preferred Stock to Mr. Casty for a total purchase
price of approximately $5.0 million. The proceeds were used for the Company's
working capital.

     The aforementioned sale resulted in a gain of approximately $4.4 million,
which was deferred for financial reporting purposes since the terms of the sale
included certain provisions that potentially guaranteed Mr. Casty a minimum
return on the Yupi shares under certain circumstances and thus prevented
immediate recognition of the gain. In August 2001, Yupi entered into a merger
agreement with T1msn Corp. that resulted in net proceeds to the Company of
approximately $20,000 and negated the minimum return provisions of the original
terms of the sale to Mr. Casty. Accordingly, during the first quarter of fiscal
2002, the Company recognized the deferred gain on the sale of the shares to Mr.
Casty.

                                       44

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     Other: Index Futures Group, Inc. ("IFG"), a wholly-owned subsidiary of the
Company, and LC Management, Inc., a corporation controlled by Lee S. Casty, a
significant stockholder of IFX, have entered into an Amended and Restated
Consulting Agreement dated as of July 1, 2002. Under the terms of the Consulting
Agreement, Mr. Casty is available to provide consulting services regarding
operational matters of IFX and its affiliates for a fee of $5,000 per month.
Such consulting services include attendance once each quarter at a two-day
meeting with IFX management in Miami, Florida. Mr. Casty is responsible for his
own travel expenses. The Consulting Agreement may be terminated by either party
on at least 30 days notice after June 1, 2003.

     The INTCOMEX Group ("INTCOMEX") is a group of companies which is a Latin
American wholesale distributor of microcomputers, networking products, mass
storage products, multimedia products, computer peripheral equipment and
computer components. INTCOMEX is owned by family members of Michael Shalom, the
Company's Chief Executive Officer and a director. Mr. Shalom was a principal of
INTCOMEX until July 1999. During fiscal year 2002, IFX sold connectivity
services for approximately $55,200 to INTCOMEX and purchased equipment from
INTCOMEX at a cost of approximately $225,400.

     Joel Eidelstein, the President and a director of the Company, has received
loans for personal expenses from the Company and Tutopia, pursuant to two
promissory notes to the Company and two promissory notes to Tutopia. The
promissory notes to the Company in the amount of $20,000 and $10,000 were made
on August 4, 1999 and November 4, 1999, respectively. Interest in the amount of
5% per annum, compounds monthly, from the date of each note. Principal and
interest on both notes was due on August 4, 2000. Any principal or interest not
paid when due bears interest at the rate of 8% per annum. The promissory notes
to Tutopia, each in the amount of $15,000, were made on January 22, 2001 and
September 11, 2001. The January 22, 2001 note to Tutopia accrues interest at a
rate of 5% per annum from the date of the note and any amount not paid when due
bears interest at a rate of 10% per annum. Interest on the January 22, 2001 note
was payable semi-annually beginning on July 22, 2001. All principal and interest
was due on January 22, 2002. The September 11, 2001 note to Tutopia accrues
interest at a rate of 5% per annum from the date of the note and any amount not
paid when due bears interest at a rate of 15% per annum. All outstanding
principal and interest was due on September 11, 2002. As of September 30, 2002,
Mr. Eidelstein owed $37,100 in principal and interest to the Company and $32,800
in principal and interest to Tutopia, the largest amount outstanding on such
loans since they were made.

Note 16 Tutopia.Com, Inc.

     In September 2000, the Company's voting interest in its majority-owned
subsidiary, Tutopia was reduced to less than 50%. As a result of this reduction,
the Company deconsolidated Tutopia and began accounting for Tutopia under the
equity method. For the fiscal year ended June 30, 2002, IFX derived
approximately 25.6% of its revenue from Tutopia. At June 30, 2002, IFX has
accounts receivable from Tutopia in the amount of approximately $0.3 million,
net of $1.0 million of revenues which have been deferred. As of June 30, 2002,
IFX had billed Tutopia $1.6 million for connectivity in Brazil. Prior to June
30, 2002, IFX fully reserved the amount billed to Tutopia, which was reflected
as a reduction of the related deferred revenues. Tutopia ceased Brazilian
operations during fiscal 2001.

     The operating results of Tutopia were as follows:

                                               Fiscal year ended June 30,
                                     -------------------------------------------
                                          2002           2001            2000
                                     -------------------------------------------

                                      (Unaudited)    (Unaudited)    (Unaudited)
                                     -------------  -------------  -------------
         Revenues                    $  8,450,900   $  2,052,400   $     58,300

         Operating expenses            15,366,900     25,268,400     13,937,600
                                     -------------  -------------  -------------
         Operating loss              $ (6,916,000)  $(23,216,000)  $(13,879,300)
                                     =============  =============  =============
         Net loss                    $ (6,893,500)  $(22,919,200)  $(13,457,300)
                                     =============  =============  =============

     During the first quarter of fiscal 2001, the Company's investment in
Tutopia was reduced to $0 under the equity method of accounting. In May 2001,
IFX invested an additional $3.1 million in Tutopia as a result of UBS investment
in IFX. As a result of this investment, the Company expensed $0.9 million and
$0.2 million of losses related to its proportionate share of Tutopia's losses
during fiscal 2002 and 2001, respectively. The Company reduced the carrying
value of its investment in the preferred stock of Tutopia by $1.7 million during
2002 as a result of Tutopia's continued losses.

     Selected financial information from Tutopia's balance sheet:

                                                      June 30,
                                              -----------------------
                                                 2002         2001
                                              (Unaudited) (Unaudited)
                                              ----------- -----------
         Current assets                      $   965,600  $4,878,700
         Non-current assets                    1,097,400   1,460,100
         Total assets                        $ 2,063,000  $6,338,800
                                             ===========  ===========
         Current liabilities                 $ 4,119,300  $1,329,100
         Long-term liabilities                    27,500           -
         Total liabilities                     4,146,800   1,329,100

         Stockholder's equity                $(2,083,800) $5,009,700
                                             ===========  ===========

                                       45

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Note 17 Agreement with T1msn

     On March 15, 2002, IFX entered into a binding term sheet agreement to
provide T1msn, Corp. ("T1msn") with Internet access services for its dial-up
access service in Argentina and Chile, and potentially for other Latin American
markets. T1msn is a joint venture between Microsoft Corp. and Telefonos de
Mexico, S.A. de C.V. The access services include "free" Internet access in
certain countries and fee-for use Internet access in other jurisdictions, as
well as technical support for those services. As of September 2002, IFX was
providing service for T1msn end users in Argentina, Chile, El Salvador,
Guatemala, Panama and Venezuela. Under the agreement, IFX and T1msn will share
time-on-line revenues attributable to the access service provided to T1msn's end
users. Also, under the terms of the agreement, IFX has provided a service level
agreement committing to maintain its network to specified standards. If not
otherwise extended, the term sheet will expire on October 31, 2002, if the
parties have not entered into definitive transaction documents by that date. It
is anticipated that the definitive agreement will have a term of one year from
the effective date of such agreement with elections for T1msn to renew for eight
additional six-month periods.

     As part of its binding term sheet agreement with T1msn, IFX will grant to
T1msn warrants potentially enabling T1msn to acquire up to 15% of the common
stock of IFX (approximately 8.3 million warrants as of June 30, 2002, treating
preferred shares on a "as converted" basis) if certain performance and contract
renewal provisions are met by T1msn. Determination of the number of warrants
would be made at the date of the definitive agreement. The definitive agreement
may provide T1msn with additional cash bonus provisions instead of some or all
of the warrants.

Note 18  Quarterly Financial Data (Unaudited)

<TABLE>
<CAPTION>
                                                                                 Quarter ended
                                                 ----------------------------------------------------------------------------
Fiscal 2002                                        9/30/2001       12/31/2001       3/31/2002       6/30/2002        Total
------------                                     -------------    ------------     -----------     -----------    -----------
<S>                                              <C>              <C>              <C>            <C>             <C>
Total revenues                                   $   7,029,800    $  7,418,100     $ 7,031,400    $  6,671,800    $ 28,151,100
Gross profit                                         3,106,200       3,429,900       3,336,000       2,720,900      12,593,000

Income from discontinued operations, net               199,600       1,207,700          10,000          29,100       1,446,400

Net loss                                            (3,970,600)     (7,403,600)     (1,801,900)    (11,421,000)    (24,597,100)
Deemed dividends to preferred shareholders                   -               -               -      (4,035,300)     (4,035,300)
                                                 -------------    ------------     -----------    ------------    ------------
Net loss available to common stockholders        $  (3,970,600)   $ (7,403,600)    $(1,801,900)   $(15,456,300)   $(28,632,400)
                                                 =============    ============     ===========    ============    ============

Per share - basic and diluted:

Loss from continuing operations                  $       (0.29)   $      (0.60)    $     (0.14)   $      (0.86)   $      (1.89)
Income from discontinued operations, net                  0.02            0.08               -               -            0.10
                                                 -------------    ------------     -----------    ------------    ------------
Net loss                                                 (0.27)          (0.52)          (0.14)          (0.86)          (1.79)

Deemed dividends to preferred shareholders                   -               -               -           (0.29)          (0.29)
                                                 -------------    ------------     -----------    ------------    ------------

Net loss available to common stockholders        $       (0.27)   $      (0.52)    $     (0.14)   $      (1.15)   $      (2.08)
                                                 =============    ============     ===========    ============    ============
</TABLE>

                                       46

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
                                                                                   Quarter ended
                                                     ---------------------------------------------------------------------------
Fiscal 2001                                               9/30/00         12/31/00      3/31/01       6/30/01          Total
-----------                                             -------------  -------------  ------------  -------------  -------------
<S>                                                     <C>            <C>            <C>           <C>            <C>
Total revenues                                              7,490,500  $   8,328,100  $  8,787,800      7,515,400  $  32,121,800
Gross profit                                                2,563,200      2,941,700     3,573,900      2,246,100     11,324,900

Income from discontinued operations, net                    1,911,700        395,800       406,300        119,700      2,833,500

Net loss                                                  (11,308,700)   (10,385,700)   (9,388,300)   (27,272,500)   (58,355,200)
Deemed dividends to preferred shareholders                          -              -             -    (25,000,000)   (25,000,000)
                                                        -------------  -------------  ------------  -------------  -------------
Net loss available to common stockholders               $ (11,308,700) $ (10,385,700) $ (9,388,300) $ (52,272,500) $ (83,355,200)
                                                        =============  =============  ============  =============  =============
Per share - basic and diluted:

Loss from continuing operations                         $       (0.99) $       (0.79) $      (0.70) $       (1.96) $       (4.44)
Income from discontinued operations, net                         0.14           0.03          0.03              -           0.20
                                                        -------------  -------------  ------------  -------------  -------------
Net loss                                                        (0.85)         (0.76)        (0.67)         (1.96)         (4.24)

Deemed dividends to preferred shareholders                          -              -             -          (1.81)         (1.81)
                                                        -------------  -------------  ------------  -------------  ------------
Net loss available to common stockholders               $       (0.85)         (0.76) $      (0.67) $       (3.77) $       (6.05)
                                                        =============  =============  ============  =============  =============
</TABLE>

     As described in Note 2, the Company estimated that the undiscounted cash
flows associated with property and equipment and acquired customer base may not
have been sufficient to recover the net book value of such assets, resulting in
the Company recording impairment charges of approximately $3.2 million and $10.9
million during the fourth quarter of fiscal 2002 and 2001, respectively.

     Note 10 includes a discussion of the deemed dividends on preferred stock of
$4.0 million and $25.0 million reported in the fourth quarter of fiscal 2002 and
2001, respectively.

     In June 2001, IFX recognized a loss on its Yupi investment in the amount of
approximately $2.5 million based on management's determination that the value of
such investment had been impaired.

     During September 2000, the Company's voting interest in its majority-owned
subsidiary Tutopia fell below 50%. As a result, the Company deconsolidated
Tutopia and began accounting for its investment under the equity method.
Accordingly, in fiscal 2001 the Company restated its fiscal 2000 consolidated
financial statements as if Tutopia had been accounted for under the equity
method since its inception in January 2000.

Note 19 Subsequent Events

Funding

     In September 2002, the Company received $1.1 million from ROF/IFX, LLC
("ROF") in exchange for a 10% promissory note due June 30, 2003, that is
convertible into shares of either Series D or new preferred stock at the option
of the note holder. As part of the transaction, ROF also was provided the right
to exchange up to 400,000 shares of IFX common stock for shares of that class of
Company preferred stock described in paragraph 3(a) of the Amended And Restated
Put Agreement among the Company, UBS Capital Americas III, L.P. and UBS Capital
LLC, with an exchange ratio of 6 shares of common stock for each share of newly
issued preferred stock.

NASDAQ Listing

     IFX's stock is traded on the NASDAQ SmallCap Market under the symbol
"FUTR." On February 14, 2002, the NASDAQ Staff notified the Company that the bid
price of its common stock had closed at less than $1.00 per share over the
previous 30 consecutive trading days and, as a result, did not comply with
Marketplace Rule 4310 (c)(4) (the "Price Rule"). In accordance with Marketplace
Rule 4310 (c)(8)(D), the Company was provided 180 calendar days, or until August
13, 2002, to regain compliance with the Price Rule.

     On February 21, 2002, NASDAQ Staff notified the Company that it did not
comply with Marketplace Rule 4310 (c)(2)(B) (the "Capital Rule"), which
requires a minimum of $2.0 million in net tangible assets, $2.5 million in
stockholders' equity, $35.0 million of market capitalization or $500,000 net
income for the most recently completed fiscal year or two of the three of a
company's most recently completed fiscal years. On May 9, 2002, the Company
received a waiver of certain terms of the Company's Certificates of Designation
from the preferred stockholders that resulted in the Company's preferred stock,
which had been stated as outside of stockholders' equity, to be reclassified as
part of stockholders' equity. On May 17, 2002, NASDAQ advised the Company that
it was now in compliance with the Capital Rule.

                                       47

<PAGE>

                        IFX CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     On August 14, 2002, the NASDAQ Staff advised the Company that while it had
not regained compliance in accordance with Marketplace Rule 4310 (c) (8) (D),
the staff noted that the Company did meet the initial listing requirements of
$5.0 million of stockholders' equity (based on pro forma stockholders' equity
as reported in the Company's Form 10-Q for the quarter ended March 31, 2002).
Hence, the Company was provided with an additional 180 days, or until February
10, 2003, to regain compliance with the applicable requirements. If the shares
of the Company's common stock were to be suspended or delisted from the NASDAQ
system, it would be much more difficult to dispose of the common stock or
obtain accurate quotations as to the price of the securities. This, in turn,
could make it more difficult for the Company to issue securities pursuant to
debt or equity offerings in the future.

     At June 30 and September 30, 2002, the Company's common stock was trading
below the NASDAQ's $1.00 per share listing price and, at June 30 and September
30, 2002, the Company did not meet the NASDAQ's initial minimum stockholders'
equity requirement of $5.0 million. These conditions may result in the Company's
stock being delisted from the NASDAQ.

                                       48

<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Stockholders of
IFX Corporation and Subsidiaries

     We have audited the accompanying consolidated balance sheets of IFX
Corporation and subsidiaries as of June 30, 2002 and June 30, 2001, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended June 30, 2002. Our audits
also included the financial statement schedule listed in the Index at Item
14(a). These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of IFX Corporation
and subsidiaries at June 30, 2002 and 2001 and the consolidated results of their
operations and their cash flows for each of the three years in the period ended
June 30, 2002, in conformity with accounting principles generally accepted in
the United States. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.

     The accompanying financial statements and schedule have been prepared
assuming that the Company will continue as a going concern. As more fully
described in Note 1, the Company has a working capital deficit at June 30, 2002
and has experienced operating losses and negative cash flows from operations
during the years ended June 30, 2002, 2001 and 2000. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are described in Note 1. The
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the outcome of this
uncertainty.

     As discussed in Note 2 to the financial statements, the Company adopted
Statement of Financial Accounting Standards No. 145, effective July 1, 2001,
which required the Company to change its method of accounting for extraordinary
items.

                                                           /s/ ERNST & YOUNG LLP



Miami, Florida,
October 4, 2002

                                       49

<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURES

         None

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Certain information with respect to directors and executive officers is
         set forth in Part I of this Report. Additional information required by
         this Item is incorporated herein by reference to the section entitled
         "Compliance with Section 16(a) of the Securities and Exchange Act of
         1934" of the Proxy Statement related to the Company's 2002 Annual
         Meeting of Stockholders to be filed by the Company with the Securities
         and Exchange Commission (the "Definitive Proxy Statement").

ITEM 11. EXECUTIVE COMPENSATION

         The information required by this Item is incorporated herein by
         reference to the sections entitled "Executive Compensation" and
         "Certain Transactions" of the Definitive Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by this Item is incorporated herein by
         reference to the section entitled "Security Ownership of Certain
         Beneficial Owners and Management" of the Definitive Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by this Item is incorporated herein by
         reference to the sections entitled "Certain Transactions" and
         "Compensation Committee Interlocks and Insider Participation" of the
         Definitive Proxy Statement.

ITEM 14. CONTROLS AND PROCEDURES

         Not applicable.
                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a).

1.   Financial Statements

     The following financial statements are attached to this Form 10-K.

<TABLE>
<CAPTION>
                                                                                                          Form 10-K
                                                                                                         Page Number
                                                                                                         -----------
     <S>                                                                                                 <C>
     Report of Independent Certified Public Accountants                                                      49

     Consolidated Balance Sheets as of June 30, 2002 and 2001                                                24

     Consolidated Statements of Operations for the years ended June 30, 2002, 2001 and 2000                  25

     Consolidated Statements of Changes in Stockholders' Equity for the years ended
     June 30, 2002, 2001 and 2000                                                                            26

     Consolidated Statements of Cash Flows for the years ended June 30, 2002, 2001 and 2000                  27

     Notes to Consolidated Financial Statements                                                              28
</TABLE>

                                       50

<PAGE>

2. Financial Statement Schedules

                                                                     SCHEDULE II

                        IFX CORPORATION AND SUBSIDIARIES
                        Valuation and Qualifying Accounts
                           (For Continuing Operations)

<TABLE>
<CAPTION>
                                                     Additions
                                            ----------------------------
                                  Balance at     Charged to         Charged       Deductions      Balance
                                  Beginning   (Benefits Against)   to Other       (Describe)      at End of
                                  of Period   Costs and Expenses   Accounts                       Period
                                                                  (Describe)
Description
------------------------------------------------------------------------------------------------------------
<S>                              <C>            <C>               <C>             <C>              <C>
Year ended June 30, 2002

Allowance for Doubtful Accounts  $ 1,955,800    $ 1,122,800       $         --    $(2,380,500)/2/$   698,100
Valuation Allowance on Deferred
Tax Assets                        31,300,000             --         10,500,000/1/          --     41,800,000
                                 ---------------------------------------------------------------------------
                                  33,255,800      1,122,800         10,500,000      (2,380,500)   42,498,100

Year ended June 30, 2001
Allowance for Doubtful Accounts  $   922,500    $ 1,033,300       $         --    $        --    $ 1,955,800
Valuation Allowance on Deferred
Tax Assets                        13,700,000             --         17,600,000/1/          --     31,300,000
                                 ---------------------------------------------------------------------------
                                  14,622,500      1,033,300         17,600,000                    33,255,800

Year ended June 30, 2000
Allowance for Doubtful Accounts  $    80,100    $   842,400       $         --    $        --    $   922,500
Valuation Allowance on Deferred
Tax Assets                                --             --         13,700,000/1/          --     13,700,000
                                 ---------------------------------------------------------------------------
                                      80,100        842,400         13,700,000             --     14,622,500
</TABLE>

--------------------------------------------------------------------------------

/1/ To record a valuation allowance for deferred tax assets.

/2/ To write-off receivables.

All other schedules called for under Regulation S-X are not submitted because
they are not applicable or not required or because the required information is
not material or is included in the financial statements or notes thereto.

                                       51

<PAGE>

3.  Exhibits

(1) The exhibits required to be filed by Item 601 of Regulation S-K are listed
in the Exhibit Index which is attached hereto and incorporated by reference
herein.

(b) The Company filed reports on Forms 8-K on October 22, 2001 (to report the
agreement to purchase the Company's Series C Convertible Preferred Stock),
February 27, 2002 (to report the closing of the Series C Convertible Preferred
Stock sale and the possible deemed change in control of the Company, NASDAQ
rule compliance matters and the agreement to purchase the Series D Convertible
Preferred Stock) and July 3, 2002 (to report the resignation and replacement of
two members of the Board of Directors and to report the closing of the Series D
Convertible Preferred Stock sale).

                                       52

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 the registrant duly caused this report statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Miami, State of Florida, on October 11, 2002.

                                          IFX CORPORATION

                                          By:__________________________________
                                                         Michael Shalom,
                                                   Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
  Signature                     Title                                             Date
  ---------                     -----                                             ----
<S>                             <C>                                               <C>
  /s/ Joel M. Eidelstein        Chairman of the Board and President               October 11, 2002
----------------------------                                                    --------------------
  Joel M. Eidelstein

  /s/ Michael Shalom            Chief Executive Officer and Director              October 11, 2002
----------------------------                                                    --------------------
  Michael Shalom                (Principal Executive Officer)

  /s/ Howard F. Zuckerman       Chief Financial Officer                           October 11, 2002
----------------------------                                                    --------------------
  Howard F. Zuckerman           (Principal Financial and Accounting Officer)

  /s/ Richard Capone            Director                                          October 11, 2002
----------------------------                                                    --------------------
  Richard Capone

  /s/ Mark O. Lama              Director                                          October 11, 2002
----------------------------                                                    --------------------
  Mark O. Lama

  /s/ Burton J. Meyer           Director                                          October 11, 2002
----------------------------                                                    --------------------
  Burton J. Meyer

  /s/ George Duarte             Director                                          October 11, 2002
----------------------------                                                    --------------------
  George Duarte

  /s/ Patrick Delhougne         Director                                          October 11, 2002
----------------------------                                                    --------------------
  Patrick Delhougne
----------------------------
</TABLE>

                                       53

<PAGE>

                                 CERTIFICATIONS

I, Michael Shalom, do hereby certify that:

(1) I have reviewed the June 30, 2002 annual report on Form 10-K filed by IFX
Corporation (the "Company");

(2) Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

(3) Based on my knowledge, the financial statements and other financial
information included in this annual report fairly present, in all material
respects, the financial condition, results of operations and cash flows of the
Company as of and for the periods presented in this annual report.

Date: October 11, 2002

Chief Executive Officer

I, Howard F. Zuckerman, do hereby certify that:

(1) I have reviewed the June 30, 2002 annual report on Form 10-K filed by IFX
Corporation (the "Company");

(2) Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

(3) Based on my knowledge, the financial statements and other financial
information included in this annual report fairly present, in all material
respects, the financial condition, results of operations and cash flows of the
Company as of and for the periods presented in this annual report.

Date: October 11, 2002


Chief Financial Officer

                                       54

<PAGE>

                                 Exhibit Index

      Exhibit Number                Description of Exhibit

          3.1/1/         Restated Certificate of Incorporation of the Registrant

          3.2/2/         Certificate of Amendment of Restated Certificate of
                         Incorporation of the Registrant

          3.3/6/         By-laws, effective June 15, 2000

          4.1/3/         Second Amended Certificate of Designation, Powers,
                         Preferences and Rights of Series A Convertible
                         Preferred Stock of the Registrant

          4.2/3/         Amended Certificate of Designation, Powers, Preferences
                         and Rights of Series B Convertible Preferred Stock of
                         the Registrant

          4.3/3/         Certificate of Designation, Powers, Preferences and
                         Rights of Series C Convertible Preferred Stock of the
                         Registrant

          4.4/2/         Certificate of Designation, Powers, Preferences and
                         Rights of Series D Convertible Preferred Stock of the
                         Registrant

         10.1/2/         Third Amended and Restated Registration Rights
                         Agreement dated as of June 28, 2002, among Registrant,
                         UBS Capital Americas III, L.P., UBS Capital LLC,
                         International Technology Investments, LC, LSC, LLC, Jak
                         Bursztyn and Lee S. Casty

         10.2/2/         Fourth Amended and Restated Stockholders Agreement
                         dated as of June 28, 2002, among Registrant, UBS
                         Capital Americas III, L.P., UBS Capital LLC,
                         International Technology Investments, LC, Joel
                         Eidelstein, Michael Shalom, LSC, LLC, Jak Bursztyn and
                         Lee S. Casty

         10.3/3/         Put Agreement dated as of February 19, 2002, among
                         Registrant, UBS Capital Americas III, L.P. and UBS
                         Capital LLC

         10.4            Amended and Restated Put Agreement dated as of August
                         15, 2002, among Registrant, UBS Capital Americas III,
                         L.P. and UBS Capital LLC

         10.5/4/         Series C Convertible Preferred Stock Purchase Agreement
                         dated as of October 11, 2001, among the Registrant, UBS
                         Capital Americas III, L.P. and UBS Capital LLC

         10.6/3/         Series D Convertible Preferred Stock Purchase Agreement
                         dated as of February 19, 2002, among Registrant, UBS
                         Capital Americas III, L.P., UBS Capital LLC,
                         International Technology Investment LC, LSC, LLC, and
                         Jak Bursztyn

         10.7            Amendment No. 1 to Series C Convertible Preferred Stock
                         Purchase Agreement dated as of December 10, 2001 among
                         the Registrant, UBS Capital Americas III, L.P. and UBS
                         Capital LLC

         10.8            Amendment No. 2 to Series C Convertible Preferred Stock
                         Purchase Agreement dated as of January 10, 2002 among
                         the Registrant, UBS Capital Americas III, L.P. and UBS
                         Capital LLC

         10.9            Amendment No. 1 to Series D Convertible Preferred Stock
                         Purchase Agreement dated as of April 19, 2002 among the
                         Registrant, UBS Capital Americas III, L.P. and UBS
                         Capital LLC

         10.10           Amendment No. 2 to Series D Convertible Preferred Stock
                         Purchase Agreement dated as of May 30, 2002 among the
                         Registrant, UBS Capital Americas III, L.P. and UBS
                         Capital LLC

         10.11/5/*       Form of Non-Qualified Stock Option Agreement (1998
                         Stock Option Plan) between the Registrant and employee

         10.12/5/*       Form of Stock Option Agreement (2001 Option Plan)
                         between the Registrant and employee

         10.13/5/*       Employment Agreement dated as of May 7, 2001 between
                         Joel Eidelstein and the Registrant

         10.14/5/*       Employment Agreement dated as of May 7, 2001 between
                         Michael Shalom and the Registrant

         10.15/5/*       Employment Agreement dated as of May 7, 2001 between
                         Jose Leiman and the Registrant

         10.16*          Employment Agreement dated as of August 1, 2002 between
                         Howard Zuckerman and the Registrant

         10.17/5/        Agreement between Registrant and Lee S. Casty dated
                         August 28, 2001

         10.18/5/*       Form of Directors Stock Option Agreement

         10.19/5/        Dial Access Agreement dated as of August 30, 2000
                         between Tutopia.com, Inc. and the Registrant

         10.20/5/        Revenue Sharing Agreement dated as of August 31, 2000
                         between Tutopia.com, Inc. and the Registrant

         10.21/5/        Inter-Company Services Agreement dated as of August 31,
                         2000 between Tutopia.com, Inc. and the Registrant

         10.22           Amendment to Inter-Company Services Agreement dated as
                         of October 4, 2002

         10.23/6/        Share Sale Agreement, dated August 24, 2000, between
                         Duncan Lawrie Offshore Services Limited in its capacity
                         as trustee for The IFX Group Trust and the Registrant

         10.24           Convertible Promissory Note to ROF/IFX dated September
                         9, 2002.

         21.1            List of subsidiaries of the Company

         23.1            Consent of Ernst & Young LLP

1    Incorporated by reference to Registrant's Report on Form 8-K filed on July
     5, 2000.
2    Incorporated by reference to Registrant's Report on Form 8-K filed on July
     3, 2002.
3    Incorporated by reference to Registrant's Report on Form 8-K filed on
     February 27, 2002.
4    Incorporated by reference to Registrant's Report on Form 8-K filed October
     22, 2001.
5    Incorporated by reference to Registrant's Report on Form 10-K filed on
     October 15, 2001.
6    Incorporated by reference to Registrant's Report on Form 10-K filed
     September 28, 2000.

*    Management contract or compensatory plan or arrangement required to be
     filed as an exhibit to the Company's Annual Report on Form 10-K.