<PAGE>
 
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                UNITED STATESSECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
 
                               ----------------
 
                                   FORM 10-K
 
(Mark
One)
 
  [X]        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
                    For the fiscal year ended June 30, 1998
 
                                      OR
 
  [_]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
                      For the Transition period from to
 
                          COMMISSION FILE NO. 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 NUMBER)
 
         200 WEST ADAMS STREET                          60606
           CHICAGO, ILLINOIS                         (ZIP CODE)
    (ADDRESS OF PRINCIPAL EXECUTIVE
               OFFICES)
 
      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (312) 419-9530
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
 
                          $.02 PAR VALUE COMMON STOCK
 
                               ----------------
 
  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 definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
 
  As of August 31, 1998, the aggregate market value of the voting stock held
by non-affiliates of the registrant was approximately $5,187,000.
 
  As of August 31, 1998, there were outstanding 6,155,539 shares of the
Registrant's common stock.
 
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<PAGE>
 
                                     PART I
 
ITEM 1--BUSINESS
 
 (a) General Development of Business.
 
  The Registrant was incorporated under the laws of the State of Illinois in
July, 1985, and in May, 1994, the Registrant changed its state of incorporation
to Delaware. Until July 1, 1996, the Registrant's primary business activity was
the conduct of commodity brokerage business through its principal operating
subsidiary, Index Futures Group, Inc. ("Index").
 
  On July 1, 1996, substantially all of the brokerage accounts maintained by
Index, together with all positions, securities, and other assets held in or for
such accounts and other agreed-upon assets used in the conduct of the brokerage
activities ("Sale of Assets") were sold to E.D.& F. Man International, Inc.
("MINC"). MINC is a unit of E.D.& F. Man Group, plc, a London-based
international trading and finance conglomerate.
 
  As a condition of the Sale of Assets, the Registrant has changed its name to
IFX Corporation, and Index has changed its name to FX Chicago Inc. ("FX
Chicago").
 
  As a result of the Sale of Assets, 207 employees were offered employment at
MINC, including, Burton J. Meyer, formerly president and a director of the
Registrant, and Philip Tanzar, formerly General Counsel and a director of the
Registrant, both of whom accepted such employment, and 85 employees resigned or
were terminated.
 
  Another result of this transaction, is that FX Chicago no longer acts as a
futures broker for public customers and has withdrawn as a clearing member from
all commodity exchanges. FX Chicago's operations are currently limited to
earnings from the Sale of Assets.
 
  Currently, the Registrant's primary, majority-owned, operating subsidiary is
IFX Ltd. (formerly Index FX, Ltd.), a British corporation. IFX Ltd. continues
to conduct foreign exchange business as a registrant of the British Securities
and Futures Authority ("SFA"). IFX Ltd. commenced trading operations in
October, 1995 and became an SFA registrant in November, 1996.
 
  Effective July 1, 1996, the Registrant's revenue stream consists of the
earnings from the Sale of Assets, as defined in the Sale of Assets agreement,
interest on its capital and income from operations of IFX Ltd. During fiscal
1998 and 1997, FX Chicago earned $4,159,600 and $2,157,900 respectively from
the Sale of Assets.
 
 (b) Narrative Description of Business.
 
  General
 
  The Registrant is a holding company with its businesses conducted through its
wholly-owned subsidiary, FX Chicago, and its majority-owned subsidiary, IFX
Ltd.
 
  Prior to the Sale of Assets, FX Chicago, formerly known as Index, was a
futures commission merchant registered with the United States Commodity Futures
Trading Commission ("CFTC") and the SFA in the United Kingdom and was a member
of the National Futures Association ("NFA"). It was involved in all aspects of
brokerage of futures and options on futures contracts. It was a clearing member
of the Chicago Mercantile Exchange, the Chicago Board of Trade, the Mid-America
Commodity Exchange, the Commodity Exchange, Inc., the New York Mercantile
Exchange, the New York Futures Exchange, the New York Cotton Exchange and the
Coffee, Sugar & Cocoa Exchange. It provided a full-range of futures brokerage,
clearing and back office services for professional, institutional and public
commodities traders and, through a subsidiary, IMSI, Inc. (formerly Index
Management Services, Inc.), until July 1, 1996 acted as a commodity pool
operator. Index, until July 1, 1996, was the clearing agent for other non-
clearing futures commission merchants, financial institutions, regional
brokerage houses and introducing brokers. Operations at FX Chicago currently
relate primarily to the net income derived from the Sale of Assets.
 
                                       2
<PAGE>
 
  FX Chicago presently has one wholly-owned subsidiary, IMSI, Inc., which was
organized in May, 1986. IMSI was previously registered with the CFTC as a
commodity pool operator and was a member of the NFA. IMSI was organized to
create and offer to the public, either by itself or in cooperation with others
through joint ventures, various commodity futures fund offerings which may be
marketed through broker-dealers or through participating regional brokerage
houses. As of July 1, 1996, IMSI no longer operates commodity pools. Currently,
IMSI, Inc. is a partner with a 50% interest in a trading partnership.
 
  IFX Ltd. continues to conduct foreign exchange business as a registrant of
the British SFA. IFX Ltd. commenced trading operations in October, 1995 and
became an SFA registrant in November, 1996. The operations of IFX Ltd. are
currently the Registrant's primary source of income, other than income from the
Sale of Assets.
 
  While the principal business of IFX Ltd. remains that of a primary market
maker in both spot and forward foreign exchange, IFX Ltd. has also now become a
recognized market maker for both Chicago Mercantile Exchange ("CME") Currency
Exchange for Physical (EFP) transactions and OTC options.
 
  IFX Ltd. works closely with many U.S. commodity trading advisors, many of
whom, for historical reasons, track and trade currency futures contracts,
rather than the cash market. Due to the relative illiquidity of the
international monetary market of the CME, and the limited trading hours, both
the creditworthiness of the CME (assets $42 billion) and the liquidity of the
cash market (daily volume of $1,200 billion), make EFP execution through IFX
Ltd., an independent market maker, an increasingly practical solution.
 
  During fiscal 1998, in addition to the above described subsidiaries, the
Registrant had one other majority-owned subsidiary, Stark Research, Inc.
("Stark"). In September, 1993, the Registrant purchased a controlling interest
in Stark and became the majority shareholder in that company. Stark is an
investment research company which publishes monthly and quarterly magazines
regarding investments with a primary focus on funds investing in commodities.
Stark is in the process of liquidation, and had no activity during fiscal 1998.
 
  In addition, the Company formed a new wholly owned subsidiary during the past
year, IFX/Telcom, Inc. The Company intends to utilize IFX/Telcom, Inc. as its
holding company for any internet or telecommunication related ventures into
which it may enter (if any). However, at the present time, IFX/Telcom, Inc. has
no assets, liabilities, revenues or activity and there can be no assurance that
IFX/Telcom, Inc. will enter into any business activities in the future.
 
  Customers
 
  The Registrant is a holding company and as such, does not directly have
customers. Prior to the Sale of Assets, Index was the Registrant's principal
source of revenue and was the Registrant's principal operating subsidiary
responsible for commodity and futures related activities for customers.
Subsequent to the Sale of Assets, the Registrant's only operating subsidiary
with customers is IFX Ltd. IFX is a primary market maker and actively makes
competitive 24 hour markets in spot and forward foreign exchange, from the
opening of the market in New Zealand at the start of the week, at 8:00 pm
London time each Sunday continuously until the close of business in New York,
at 10:00 pm London time, each Friday. IFX Ltd.'s customers are primarily non-
private, second tier banks, institutions, fund management companies, CTA's and
high net worth individuals.
 
  Marketing
 
  The Registrant's marketing activities are limited to promoting and
maintaining direct contact with IFX Ltd.'s customers. The expense associated
with such efforts is reflected in the Registrant's travel and entertainment
expenses.
 
                                       3
<PAGE>
 
  Competition
 
  IFX Ltd.'s competitors are primarily the US and European futures commissions
merchants which have their own inter-bank foreign exchange desks, as well as a
growing number of clearing banks which have margin foreign exchange
operations. Competition among firms such as IFX Ltd. is intense and is
primarily based upon both price and service. Other institutions offer their
customers the same or more services than those provided by IFX Ltd. At the
same time, the number of active participants in the foreign exchange market is
relatively small when compared to those engaged in futures and securities
trading
 
  Regulation
 
  In order to maintain its listing on the NASDAQ SmallCap Market the
Registrant must satisfy NASDAQ's revised entry and maintenance standards for
NASDAQ listed stocks. There is no assurance that the Registrant will be able
to maintain eligibility for NASDAQ.
 
  As a registrant, IFX Ltd. is subject to the financial resources requirements
adopted and administered by the SFA. As of June 30, 1998, IFX Ltd.'s financial
resources, as defined by the SFA, were $7,047,000, which was $4,233,000 in
excess of its requirements. The SFA requires all members to meet and maintain
specified financial requirements, and maintain segregated accounts for all
customers' funds, property and positions, and specified books and records on
customer transactions, all of which are open to inspection by the staff of the
SFA. Failure to meet its regulatory requirements could subject IFX Ltd. to
disciplinary actions including fines, censure, suspension or revocation of
registration.
 
  Employees
 
  As of August 31, 1998, the Registrant had 39 full and part-time employees
working for it, FX Chicago and IFX Ltd. As of June 30, 1997, the Registrant
and its subsidiaries had 30 full and part-time employees.
 
ITEM 2--PROPERTIES
 
  The Registrant leases office space at 200 West Adams Street, Chicago,
Illinois. This location serves as the Registrant's corporate headquarters. IFX
Ltd. leases office space at America House, 2 America Square, London, England,
which serves as the primary business location. Both of these facilities are
leased at rates competitive for the respective locations.
 
ITEM 3--LEGAL PROCEEDINGS
 
  As a brokerage firm having numerous customers and correspondents, Index,
from time to time, was subject to various lawsuits, including civil
litigation, arbitrations and reparations proceedings and administrative
proceedings by regulators in the commodity futures industry relating to
customers and regulatory requirements incidental to carrying on such brokerage
business. Such matters range from those in which Index was a party plaintiff
against customers to collect deficit amounts due from customers, to customer
complaints, allegations by regulatory authorities of alleged improprieties by,
or lack of registration of, employees of Index and the like. It also may be
likely in some of these actions that allegations requesting such items as
monetary penalties, license suspensions or revocations and the like will be
made. The number of such complaints, matters of litigation and administrative
proceedings amounted to a small percentage of Index's total business.
Management of the Registrant, after consultation with legal counsel, is of the
opinion that neither the Registrant, nor any of the Registrant's subsidiaries,
is involved in any current civil litigation or administrative proceeding which
it believes would have a material adverse effect on the Registrant's, or its
subsidiaries financial condition.
 
                                       4
<PAGE>
 
  Notwithstanding that the following matters are ordinary and routine
litigation incidental to the business, the Registrant believes it appropriate
to set forth the following information:
 
    On November 24, 1997, the trustee of a pension plan filed a Demand for
  Arbitration with the National Futures Association against Index and several
  other respondents, including an introducing broker guaranteed by Index. In
  the Demand, the trustee alleges breach of fiduciary duty, churning,
  misrepresentation, failure to supervise, breach of contract, aiding and
  abetting, and violation of ERISA. Claimant seeks actual damages of $141,000
  and punitive damages of $460,000. The Company believes the claim is without
  merit and will defend vigorously.
 
    On May 16, 1996, Index filed suit in the Circuit Court of Cook County--
  Law Division against Doug Niemann, a former customer, for breach of
  contract, seeking to recover a debit balance of $88,200 (Index Futures,
  Inc. v Doug Niemann case no. 96L-5506). On January 14, 1997, Niemann filed
  a counterclaim for $688,200. The Company believes that the counterclaim is
  without merit and will defend vigorously.
 
    In April, 1994, Index without admitting or denying the allegations, paid
  $100,000 to the CFTC, settling an administrative action file on September
  29, 1992. In a related action, the equity receiver of an alleged commodity
  pool operator brought an action to recover losses of approximately
  $600,000, alleging various theories such as constructive trust, negligence,
  breach of fiduciary duty and conversion. On May 29, 1996, the district
  judge dismissed the complaint in its entirety. On December 4, 1997, the
  Court of Appeals affirmed the district judge's dismissal of all claims
  against Index. On January 13, 1998, the Court of Appeals denied the
  Supplemental Plaintiffs' request for a rehearing of its appeal.
 
    Edward Schwarz ("Schwarz"), a former executive of Index whose employment
  was terminated as a result of the Sale of Assets, had rejected Index's
  severance payment offer. Schwarz had made a demand for $500,000, alleging
  age discrimination and breach of an alleged oral partnership agreement. The
  Registrant settled this case in July, 1997 for $75,000.
 
    A lawsuit was commenced in Germany against an affiliate of E.D. & F. Man
  International Inc. ("MINC") by a German citizen seeking damages of
  Deutschmark 6,403,519.19 (approximately $4,000,000 given the exchange rate
  as of September 15, 1998). The Complaint arises out of transactions which
  occurred in an account introduced by Index Futures Group, AG ("Index AG"),
  an introducing broker of Index Futures Group, Inc., prior to the Sale of
  Assets. The Plaintiff alleges that under German law, MINC's affiliate is
  successor to Index AG, and thus assumed any liabilities of Index AG.
  Pursuant to the Sale of Assets agreement, Index is responsible for any
  liability "arising out of any state of facts with respect to such Assigned
  Contract existing on or prior to the Closing Date". MINC has retained
  counsel in Germany to represent its interest in this matter. As Index AG
  was an introducing broker of Index, and not a former subsidiary of the
  Company or Index, the Company does not believe that it will ultimately be
  liable for damages. However, as the Company received notice of this suit on
  September 16, 1998, it does not have information as to the extent of any
  potential liability under the suit or legal costs required to defend such
  suit, at the present time.
 
ITEM 4--SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
  During the fourth quarter of the fiscal year ended June 30, 1998, no matters
were submitted to a vote of security holders.
 
                                    PART II
 
ITEM 5--MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
  The Registrant's stock is traded on the NASDAQ SmallCap Market.
 
  Set forth below is the range of high and low, trade prices per share of the
common stock in the over-the-counter market as reported by NASDAQ for the
periods indicated. The quotations do not include retail markups, markdowns, or
commissions. All previously disclosed data has been restated for the one-for-
five reverse split of common stock in January, 1998.
 
                                       5
<PAGE>
 
  On August 31, 1998, the closing price per share of common stock, as reported
through NASDAQ, in the over-the-counter market was $1.91.
 
<TABLE>
<CAPTION>
                                                         QUARTER     HIGH   LOW
      TYPE OF SECURITY                                    ENDED      TRADE TRADE
      ----------------                                   --------    ----- -----
      <S>                                                <C>         <C>   <C>
      Common Stock......................................  9/30/96    $ .94 $ .47
                                                         12/31/96     1.41   .47
                                                          3/31/97     1.09   .63
                                                          6/30/97     1.25   .78
                                                          9/30/97     1.09   .94
                                                         12/31/97     2.50   .94
                                                          3/31/98     2.63  1.41
                                                          6/30/98     2.94  1.81
                                                          8/31/98(1)  2.25  1.88
</TABLE>
--------
(1) Includes the period July 1, 1998 through August 31, 1998.
 
 Approximate Number of Holders of Securities
 
  As of August 31, 1998, there were 922 holders of record of the Registrant's
common stock. The Registrant believes it has a greater number of shareholders
because the Registrant believes that a substantial amount of its common stock
is held of record in street name by broker-dealers for their customers.
 
 Dividends
 
  The Registrant has never paid a cash dividend on its common stock and does
not expect to pay a cash dividend in the foreseeable future, but intends to
devote all funds to the operation of its business.
 
                                       6
<PAGE>
 
ITEM 6--SELECTED FINANCIAL DATA
 
                         SUMMARY FINANCIAL INFORMATION
 
  The following table presents summary historical information for the
Registrant. This summary information is derived from the audited historical
financial statements of the Registrant.
 
                       HISTORICAL FINANCIAL INFORMATION
 
<TABLE>
<CAPTION>
                                        IFX CORPORATION AND SUBSIDIARIES
                         ------------------------------------------------------------------
                                            YEAR ENDED JUNE 30, 1998
                         ------------------------------------------------------------------
                            1998         1997          1996          1995          1994
    OPERATING DATA:      -----------  -----------  ------------  ------------  ------------
<S>                      <C>          <C>          <C>           <C>           <C>
Revenues................ $15,465,100  $16,549,000  $ 41,134,900  $ 41,658,300  $ 37,565,300
                         ===========  ===========  ============  ============  ============
Income (loss) before
 income taxes and
 minority interest...... $ 6,573,800  $ 6,354,900  $ (1,307,200) $  3,947,800  $    992,300
Income tax expense
 (benefit)..............   2,169,200    2,325,500      (174,100)    1,536,200       406,200
                         -----------  -----------  ------------  ------------  ------------
Income (loss) before
 minority interest......   4,404,600    4,119,400    (1,133,100)    2,411,600       586,100
Minority interest (1)...  (1,037,900)    (935,600)          --            --            --
                         -----------  -----------  ------------  ------------  ------------
  Net income (loss).....   3,366,700    3,183,800    (1,133,100)    2,411,600       586,100
Assumed cumulative
 dividend on Class A
 preferred stock........         --       (23,300)      (40,000)      (40,000)      (40,000)
                         -----------  -----------  ------------  ------------  ------------
Net income (loss)
 applicable to common
 stock.................. $ 3,366,700  $ 3,160,500  $ (1,173,100) $  2,371,600  $    546,100
                         ===========  ===========  ============  ============  ============
Basic earnings (loss)
 share as restated for
 reverse split of common
 stock (2):
  Income (loss) before
   minority interest.... $       .71  $       .62  $       (.17) $        .39  $        .14
                         ===========  ===========  ============  ============  ============
  Net income (loss)..... $       .54  $       .48  $       (.17) $        .39  $        .14
                         ===========  ===========  ============  ============  ============
  Weighted average
   number of shares
   outstanding, as
   restated for reverse
   split of common
   stock................   6,246,545    6,616,893     6,744,236     6,136,105     4,035,122
                         ===========  ===========  ============  ============  ============
Diluted earnings (loss)
 per share as restated
 for reverse split of
 common stock (2):
  Income (loss) before
   minority interest.... $       .71  $       .62  $       (.17) $        .39  $        .14
                         ===========  ===========  ============  ============  ============
  Net income (loss)..... $       .54  $       .48  $       (.17) $        .39  $        .14
                         ===========  ===========  ============  ============  ============
  Weighted average
   number of shares
   outstanding, as
   restated for reverse
   split of common
   stock................   6,246,545    6,616,893     6,744,236     6,136,105     4,035,122
                         ===========  ===========  ============  ============  ============
<CAPTION>
                                              AS OF JUNE 30, 1998
                         ------------------------------------------------------------------
                            1998         1997          1996          1995          1994
   BALANCE SHEET DATA:   -----------  -----------  ------------  ------------  ------------
<S>                      <C>          <C>          <C>           <C>           <C>
Total assets............ $45,353,900  $56,400,200  $239,887,700  $190,932,400  $202,806,200
Notes payable...........         --     1,586,600     6,390,000     6,390,000     7,690,000
Subordinated debt.......         --           --      4,000,000     1,690,000     2,000,000
Stockholders' equity....  11,335,200    8,203,700     6,216,500     7,364,100     3,876,500
</TABLE>
--------
(1) Represents minority interest from sale of interest in IFX Ltd., the
    Registrant's London subsidiary.
(2) Earnings per share are computed on the basis of the weighted average
    number of shares of common stock outstanding during each year, adjusted
    for the effect of common stock equivalents arising from the assumed
    exercise of stock options and warrants if dilutive. All earnings per share
    data has been restated for the one-for-five reverse stock split in
    January, 1998.
 
                                       7
<PAGE>
 
ITEM 7--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1998
 
  IFX Corporation (formerly Jack Carl / 312-Futures, Inc.) (which when
consolidated with its subsidiaries is henceforth referred to as the
"Registrant") is a holding company which operates its business through its
subsidiaries. Index Futures Group, Inc. ("Index"), until July 1, 1996, the
Registrant's principal operating subsidiary, provided a full range of futures
brokerage, clearing and back office services for institutional and public
commodity traders. It was a clearing member of all major U.S. commodity
exchanges. Effective July 1, 1996, Index sold, transferred and assigned
substantially all of its brokerage accounts ("Sale of Assets") to E.D. & F.
Man International, Inc. ("MINC"). As a result of the Sale of Assets, Index
immediately withdrew as a clearing member from all commodity exchanges, and
terminated its registration as a futures commission merchant in December,
1996. In addition, as a condition of the Sale of Assets, Index changed its
name to FX Chicago, Inc. IFX Ltd. (formerly Index FX, Ltd.), a British
corporation and a majority-owned subsidiary of IFX Corporation, continues to
conduct foreign exchange business as a registrant of the British Securities
and Futures Authority ("SFA"). IFX Ltd. commenced trading operations in
October, 1995 and became an SFA registrant in November, 1996. The other
subsidiaries of IFX Corporation and FX Chicago currently have minimal
operations.
 
 Liquidity and Capital Resources
 
  The Company maintains a highly liquid balance sheet with a majority of the
Company's assets consisting of short-term investments, which are reflected at
market. IFX Ltd.'s role as a market maker in spot and forward foreign exchange
markets for customer activities, results in significant levels of customer-
related balances on the Company's balance sheet.
 
  The Company's cash and short-term investment portfolio totaled $36,604,000
at June 30, 1998. Included in this amount is approximately $25,406,000 of
funds from IFX Ltd. customers, which have been invested by IFX Ltd. on the
customers' behalf or are held in segregated cash accounts, pursuant to rules
of the SFA. The Company's positions are generally liquid. The portfolio is
invested primarily in U.S. dollar denominated securities, but also includes
foreign currency positions deposited by IFX customers.
 
  As a registrant, IFX Ltd. is subject to the financial resources requirements
adopted and administered by the SFA. As of June 30, 1998, IFX Ltd.'s financial
resources, as defined by the SFA, were $7,047,000, which was $4,233,000 in
excess of its requirements.
 
  From time to time the Company has obtained loans from its principal
stockholder, affiliates of its principal stockholder and executive officers of
the Company. The proceeds of these loans were used for working capital of the
Company. (See Notes 4 and 7 of the footnotes to financial statements.) During
February, 1998, the Company repaid an $836,600 note payable, which was issued
in January, 1997, to its principal stockholder. During September, 1997, the
Company repaid a $750,000 note payable, which was issued in January, 1997, to
an affiliate of its principal stockholder.
 
  Stockholders' equity at June 30, 1998 was $11,335,200. The Company effected
a one-for-five reverse split of its common stock, par value .004, effective on
January 12, 1998 (the "Effective Date"). Each five shares of such common stock
were reclassified and reflected as one share of common stock having a par
value of $.02, as of January 12, 1998. Outstanding shares of the Company's
common stock were reduced to 6,279,130 shares from 31,395,649 shares
outstanding before the split. Any holder of fractional shares resulting from
this reverse split will be paid an amount equal to the mean between the bid
and the offer prices for the Company's Common Stock on the NASDAQ SmallCap
market on the Effective Date multiplied by the amount of the fractional share.
The one-for-five reverse split also resulted in certain shareholders owning
"odd lots," that is, less than one hundred shares of Common Stock. In order to
reduce the disproportionately high costs to the Company of servicing numbers
of such shareholder accounts, and to enable those shareholders to dispose of
their securities without incurring the brokerage fees that normally attend
odd-lot transactions, the Company offered to purchase from its shareholders
all odd lots (i.e., holdings of less than one hundred shares). The purchase
amount was based
 
                                       8
<PAGE>
 
upon the number of odd-lot shares multiplied by the mean between the bid and
offer prices on the date of purchase, without commissions. The Company
maintained its offer to repurchase such odd lots until February 26, 1998,
forty-five days immediately following the Effective Date. As of June 30, 1998,
the Company had repurchased approximately 3,500 shares.
 
  The Company continues to repurchase and retire shares of its common stock,
pursuant to a repurchase program which permits the Company to purchase up to
1,000,000 shares. Pursuant to this program, the Company repurchased and retired
120,070 shares for $228,100 during fiscal 1998.
 
  In November, 1996, the Board of Directors authorized the issuance of options
for 250,000 shares of common stock at $1.20 per share, terminating June 30,
1998. These options replaced those that were originally issued in February,
1994 and terminated upon the former President accepting employment with MINC.
In June, 1998, the Company purchased and terminated these options for $200,000.
 
  As a result of the repurchase of fractional shares and odd-lots, as well as
the repurchase and retirement of shares, outstanding shares of common stock as
of June 30, 1998 totaled 6,155,539.
 
  As of June 30, 1998, the Company had outstanding lease commitments of
approximately $2,100,000 through the year 2002. The majority of this commitment
related to space leased in Chicago. While the Company remains legally committed
under terms of the lease, subsequent to June 30, 1998, the Company subleased
its' office space in Chicago, through the end of the lease term. The Company
has signed a sublease to occupy a much smaller space in Chicago through June
1999, providing for aggregate lease payments of approximately $70,000.
 
  For the year ended June 30, 1998, cash used in operations was $1,551,400
compared to cash provided by operations of $8,891,800 for the same period in
fiscal 1997. The majority of cash provided by or used in operations is related
to customer funds from customers of IFX Ltd. Cash flows from operations include
the changes in customer funds and customer payables, and will vary depending on
the amount of excess customer funds at a given time. In fiscal 1997, the amount
of excess customer funds was greater than the excess in 1998, thus contributing
to greater cash provided by operations in 1997. In addition, the Company
invests cash not needed for operations at FX Chicago, Inc. in short-term
investments such as U.S. Government obligations and overnight time deposits. As
of June 30, 1998, the Company held $5,311,300 in U.S. short-term investments.
 
  Management believes existing cash and short-term investments together with
operating cash flows, access to equity capital, and borrowing capacity through
its principal stockholder, provide adequate resources to fund ongoing operating
requirements and future capital expenditures related to the expansion of
existing businesses and development of new projects.
 
 Year 2000
 
  The Company is currently in the process of evaluating its information
technology infrastructure for Year 2000 compliance. The Company does not expect
that the cost to modify its information technology infrastructure to be Year
2000 compliant will be material to its financial position or results of
operations. The Company does not anticipate any material disruption in its
operations as a result of any failure by the Company to be in compliance. The
majority of the Company's suppliers have indicated that they are in the process
of or have already achieved Year 2000 compliance. In the event that any of the
Company's significant suppliers or customers does not successfully and timely
achieve Year 2000 compliance, the Company's business or operations could be
adversely affected.
 
 Results of Operations--Fiscal 1998 Compared to Fiscal 1997
 
  IFX Ltd., the Company's London-based operation, continues to grow. IFX Ltd.'s
target customer base is beginning to recognize it as an effective and efficient
alternative to the larger money center banks. In addition,
 
                                       9
<PAGE>
 
the Company's earnings from the Sale of Assets have continued to increase as
MINC generates additional business from the brokerage accounts it purchased
from Index, and reduces the costs associated with that business. As such,
revenues of the Company are currently increasing at a much greater rate than
are expenses. Pursuant to the Sale of Assets agreement, the Company's
percentage of earnings from the brokerage accounts will decrease based upon a
predetermined schedule as defined in the sales agreement, over the remainder
of the original sixty-six month period following the sale. As such, earnings
from the Sale of Assets may decrease accordingly.
 
  Revenues were $15,465,100 during the year ended June 30, 1998, representing
a decrease of 7% from the same period a year ago. Commission revenues continue
to increase as the IFX Ltd. business continues to expand. Trading revenues
decreased by 25% for the year ended June 30, 1998, compared to the same period
a year ago, largely as a result of the lack of volatility in the foreign
currency market during the year.
 
  Revenues from the Sale of Assets increased by $2,001,700, or 93%, for the
year ended June 30, 1998, compared to the same period a year ago. Reported
revenues during previous quarters of fiscal 1997 were subsequently adjusted
and increased by $308,000 by MINC. These adjustments are reflected in the
earnings from the Sale of Assets for the year ended June 30, 1998. The
Company's earnings from the Sale of Assets continue to increase as MINC
generates more and more business from the brokerage accounts it purchased from
Index.
 
  Other revenue decreased by $956,700 during the year ended June 30, 1998,
compared to the same period a year ago. Included in other revenue during the
year ended June 30, 1997 was a net gain of $885,600 on the sale of exchange
memberships and clearing corporation stock. No revenues were generated from
these sources during 1998.
 
  Total expenses were $8,891,300 for the year ended June 30, 1998,
representing a decrease of 13% from the same period a year ago. The decrease
in expenses resulting from the Sale of Assets has been somewhat offset by the
increasing expenses from the expanding operations of IFX Ltd. Operating
expenses should continue to decrease in fiscal 1999, given the sublease of the
office space in Chicago.
 
  As a result of the aforementioned changes in revenues and expenses, net
income for the year ended June 30, 1998 is $3,366,700 or $.54 per share
compared to net income of $3,183,800 or $.48 per share for the year ended June
30, 1997.
 
  The Board of Directors is exploring various business opportunities for the
Company now that FX Chicago, Inc. no longer acts as a futures commission
merchant, and as a result has capital available for investments. The Company
has formed a wholly-owned subsidiary, IFX/Telcom, Inc., in order to explore
and/or pursue telecommunications or Internet related projects.
 
 Results of Operations--Fiscal 1997 Compared to Fiscal 1996
 
  As a result of the Sale of Assets in July, 1996, FX Chicago (formerly Index)
no longer acts as a futures commission merchant. Differences between revenues
and expenses for the years ending June 30, 1997 and June 30, 1996 are
primarily a result of the Sale of Assets, unless otherwise noted below.
 
  Revenues were $16,549,000 in fiscal 1997, a decrease of 60% from fiscal
1996. The decrease in revenues resulting from the Sale of Assets has been
offset somewhat by the increased revenues from IFX Ltd.
 
  Trading gains increased by $6,799,700 during the year ended June 30, 1997,
compared to the same period a year ago. The primary component in trading gains
in fiscal 1997 is the revenue from IFX Ltd.
 
  Other revenue increased $3,072,400 during the year ended June 30, 1997,
compared to same period a year ago. Included in other revenue for the year
ended June 30, 1997 is $2,157,900 from the Sale of Assets, and a net gain of
$737,700 on the sale of clearing corporation stock and exchange memberships.
 
 
                                      10
<PAGE>
 
  Total expenses were $10,194,100, or 76% lower than the prior fiscal year.
The decrease in expenses as resulting from the Sale of Assets has been offset
somewhat by the increasing expenses from the expanding operations of IFX Ltd.
The expenses for fiscal 1997 reflect the ongoing expenses of IFX Ltd., IFX
Corporation and FX Chicago, transitional expenses from the Sale of Assets, and
minimal expenses for other subsidiaries.
 
  As a result of the aforementioned changes in revenues and expenses, net
income for the year ended June 30, 1997 is $3,183,800 or $.48 per share
compared to a net loss of $1,133,100 or $.17 per share for the year ended June
30, 1996.
 
 Forward-Looking Statements
 
  Statements contained in this Form 10-K regarding the Company's prospective
business opportunities, anticipated future results of operations and planned
expansion are forward-looking statements that involve substantial risks and
uncertainties. Such forward-looking statements include (i) the Company's
belief that it will not incur material costs or operational disruptions as a
result of Year 2000 problems that may be resident in its, or its customers'
and suppliers' computer information systems, (ii) the expected continued
expansion and profitability of IFX Ltd.'s operations, (iii) the amount of
future revenues the Company expects to receive from MINC pursuant to the Sale
of Assets Agreement, (iv) the amount and nature of planned capital
expenditures, (v) the Company's belief that its existing cash, short-term
investments, operating cash flows, access to equity capital and borrowing
capacity will be sufficient to finance the Company's ongoing operations and
future capital expenditures, and (vi) statements relating to the Company or
its operations that are preceded by terms such as "anticipates", "expects",
"believes" and similar expressions.
 
  In accordance with the Private Securities Litigation Reform Act of 1995,
following are important factors that could cause the Company's actual results,
performance or achievements to differ materially from those implied by such
forward-looking statements: The Company has not determined (and may be unable
to determine), with certainty, the magnitude and scope of any Year 2000
problems that may be resident on its, or on its customers' or suppliers'
information systems. There can be no assurance that IFX Ltd. can maintain or
increase its historic growth rate or profitability. The amount of revenues the
Company receives pursuant to the Sale of Assets agreement is dependent upon
(i) the amount of earnings MINC generates from the brokerage accounts it
purchased from Index and (ii) the contractual percentage of such earnings to
which the Company is entitled, which is set forth in the agreement and
decreases over time.
 
ITEM 7A--QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
  The Company's exposure to market risk is directly related to its role,
through IFX Ltd., as a foreign exchange market maker in customer-related
transactions. IFX Ltd.'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 financial instruments. When IFX Ltd. buys or sells a foreign
currency or a financial instrument denominated in a foreign currency, exposure
exists from the net open currency position. Until the position is covered by
selling or buying an equivalent amount of the same currency, IFX Ltd. is
exposed to the risk that the exchange rate may move against it. In general,
IFX Ltd. offsets it open customer positions, thus substantially reducing its
foreign exchange rate risk. IFX Ltd. is also exposed to credit risk. Credit
risk arises from the potential inability of market counterparties, such as
exchanges and banks, or customers to perform an obligation in accordance with
the terms of the contract. IFX Ltd. has established policies and procedures to
manage credit risk. A Credit Committee is responsible for approving and
reviewing new and existing customer accounts. The Committee is responsible for
establishing margin requirements and margin call levels, position limits and
trade restrictions (i.e., 1 month forward trading, instrument types, etc.).
The Finance Officer is responsible for monitoring all customer accounts on a
daily basis to ensure that they are in compliance with the agreed terms of
trading. Customer trading positions, equity balances, margin excess amounts,
and margin calls are monitored daily. As IFX Ltd. conducts the majority of its
business for its customers in foreign currencies on the spot market, its
trades generally settle on the next business day. However, if margin calls are
necessary and not satisfied in a timely manner, (within 5 days), IFX Ltd.
reserves the right to liquidate all or part of the customer's open positions.
Management believes that with trades settling the next business day and the
margin policies it employs, its credit risk is reduced substantially.
 
                                      11
<PAGE>
 
ITEM 8--FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
  For financial information, see the financial statements and notes thereto set
forth at Item 14 hereof.
 
ITEM 9--CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
 
  The Registrant did not have any changes in, or any material disagreements on
accounting and financial disclosure with, its independent public accountants in
fiscal 1998 or 1997.
 
                                    PART III
 
ITEM 10--DIRECTORS AND EXECUTIVE OFFICERS
 
  The Directors and Executive Officers of the Registrant as of June 30, 1998
were as follows:
 
<TABLE>
<CAPTION>
             NAME              AGE                           OFFICE
      ------------------       ---           --------------------------------------
      <S>                      <C>           <C>
      Joel M. Eidelstein       31            President and Director
      Christina S. Donka       31            Chief Financial Officer and Secretary
      Colleen M. Downes        35            Vice President, Treasurer and Director
      George A. Myers          47            Director
      Zalman Lekach            31            Director
</TABLE>
 
  Joel M. Eidelstein was elected Director and President of the Registrant
effective November, 1990 and November, 1996, respectively. Mr. Eidelstein
graduated from Brandeis University in May, 1988. Since June, 1988, until
immediately prior to the Sale of Assets, he was an independent commodity
futures trader and a floor manager with Index.
 
  Christina S. Donka was the Assistant Chief Financial Officer of the
Registrant from November, 1996, until June, 1997, when she became the Chief
Financial Officer and Secretary. Prior to joining the Registrant, she was
manager in the financial services division of Arthur Andersen LLP. She is a
Certified Public Accountant.
 
  Colleen M. Downes has been an employee at Index since January, 1985. She has
been Director and Treasurer of the Registrant since February, 1997. She became
Vice President in June, 1998. She is pursuing a bachelor's degree at DePaul
University in Chicago, Illinois.
 
  George A. Myers was elected Director of the Registrant effective November 16,
1990. Mr. Myers, since 1981, has been managing general partner of MC Capital, a
diversified real estate company with offices in Chicago, Illinois, Phoenix,
Arizona, and San Diego, California.
 
  Zalman Lekach has been a Director of the Registrant since February, 1997. He
is President and Chief Operating Officer of Parlux Fragrances, Inc. ("Parlux").
He became a director and an executive in Parlux, S.A., Parlux's French
subsidiary, in May 1990. In May 1993, he resigned his executive position and
owned and operated a company exporting foods and health/beauty aids to South
America. In January of 1995, he rejoined Parlux as its Chief Operating Officer
and a director. In June 1996, Mr. Zalman Lekach also assumed the position of
President of Parlux.
 
  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.
 
ITEM 11--EXECUTIVE COMPENSATION
 
  The following table sets forth all cash compensation paid by the Registrant
as well as the number of stock options earned by the Registrant's President,
who is acting in a capacity similar to a chief executive officer. There were no
other executive officers of the Company whose compensation for fiscal 1998
exceeded $100,000.
 
 
                                       12
<PAGE>
 
                          SUMMARY COMPENSATION TABLE
 
                              ANNUAL COMPENSATION
 
<TABLE>
<CAPTION>
                                 YEAR
                                ENDED                 OTHER ANNUAL  ALL OTHER
NAME AND PRINCIPAL POSITION    JUNE 30, SALARY  BONUS COMPENSATION COMPENSATION
---------------------------    -------- ------- ----- ------------ ------------
<S>                            <C>      <C>     <C>   <C>          <C>
Joel M. Eidelstein............   1998   $24,000  --       --           --
 President and Director          1997   $16,000  --       --           --
                                 1996   $68,000  --       --           --
</TABLE>
 
 Fiscal 1998 Option Grants
 
  No options were granted to the Registrant's President during fiscal 1998.
 
 Fiscal 1998 Option Exercises
 
  There were no options exercised during fiscal 1998 and the Registrant's
President did not hold any options as of June 30, 1998. During June, 1998, the
Registrant purchased for 200,000, 250,000 options previously issued to the
Registrant's former president which were exercisable at $1.20 per share.
 
 Compensation of Directors
 
  Directors are not currently compensated in connection with their duties as
directors, but may be reimbursed for expenses incurred by them, in connection
with their services as directors.
 
 Compensation Committee Interlocks and Insider Participation Compensation
Decisions
 
  The Registrant does not have a compensation committee. Prior to the Sale of
Assets, Mr. Burton J. Meyer, at the time, President and a Director of the
Registrant, participated in the negotiations of employment agreements for
executive officers of the Registrant.
 
ITEM 12--SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
  The following table sets forth as of August 31, 1998, certain information
regarding the common stock beneficially owned by each present director, the
Registrant's President, each person known by the Registrant to own more than
five percent of the common stock of the Registrant and all present executive
officers and directors as a group:
 
<TABLE>
<CAPTION>
                                          AMOUNT AND NATURE OF   APPROXIMATE
                     NAME                 BENEFICIAL OWNERSHIP PERCENT OF CLASS
                     ----                 -------------------- ----------------
      <S>                                 <C>                  <C>
      Lee S. Casty (1) (2)...............      3,092,891            50.25%
      Burton J. Meyer (3)................        314,212             5.10
      Joel M. Eidelstein.................         25,595              .42*
      George A. Myers....................          1,600              .02*
      All officers and directors as a
       group (5 persons).................         27,195              .44*
</TABLE>
--------
*Less than 1%
(1) Mr. Casty may be deemed a parent and promoter of the Registrant as those
    terms are defined under the Securities Act of 1933, as amended.
(2) c/o French-American Securities, Inc., 200 West Adams Street, Suite 1500,
    Chicago, Illinois 60606.
(3) Resigned as director and executive officer effective close of business
    July 1, 1996.
 
                                      13
<PAGE>
 
ITEM 13--CERTAIN TRANSACTIONS
 
  Effective November 30, 1985, Mr. Casty, the principal shareholder, loaned
the Registrant $400,000 evidenced by a "satisfactory subordination agreement"
approved by the regulatory authorities to which the Registrant was at that
time subject. This subordinated loan was due to mature on December 1, 1988. On
March 5, 1986, the Registrant amended its Articles of Incorporation to
authorize 400,000 shares of Preferred Stock, par value $1.00 per share, 10%
cumulative, all of which Preferred Stock was thereupon issued to Mr. Casty in
satisfaction of such subordinated loan. The Preferred Stock is redeemable,
with cumulative dividends, at the option of the Registrant under certain
circumstances. No liability for these dividends had been recorded as dividends
are not payable until declared. In 1986, the Articles of Incorporation of the
Registrant were amended and the Preferred Stock was redesignated "Class A
Preferred Stock." On January 31, 1997, the Registrant redeemed and retired the
400,000 issued and outstanding shares of its Class A preferred stock. The
preferred stock was redeemed at a price equal to the aggregate par value
thereof plus the cumulative but previously undeclared and unpaid dividends
thereon, totaling $836,600. As payment, the Registrant issued to Mr. Casty a
promissory note in the amount of $836,600, bearing interest at the prime rate
and maturing on January 31, 1998. This note was repaid in February, 1998.
 
  In January, 1997, The Company repaid all notes payable (other than the note
for the redemption of the preferred stock) due to Mr. Casty, which aggregated
to $940,000. The Registrant, during the years ended June 30, 1998 and 1997,
paid Mr. Casty, approximately $42,900 and $91,100 in interest on such notes
payable.
 
  In January, 1997, all notes payable to French-American Securities, Inc., a
company wholly-owned by Mr. Casty, which aggregated to $5,450,000 were
extended to January 31, 1998. In June and September, 1997, $4,700,000 and
$750,000, respectively, of the notes payable to French-American Securities,
Inc. were repaid. The Registrant, during the years ended June 30, 1998 and
1997, paid French-American Securities, Inc. $11,000 and $520,000 in interest
on such notes payable.
 
  A note receivable in the amount of $811,400 arose in connection with
advances made by the Company to SRC, Inc. an affiliated entity of Mr. Casty.
These demand receivables were converted into a demand note bearing interest at
8% and was subsequently changed to the prime rate of interest. The Company
earned $52,400, $51,700, and $53,500 of interest income on this note during
the years ended June 30, 1998, 1997 and 1996, respectively.
 
  In November, 1996, the Board of Directors authorized the issuance of options
to Mr. Burt Meyer, the Company's former President, for 250,000 shares of
common stock at $1.20 per share, terminating June 30, 1998. These options
replaced those that were originally issued in February, 1994 and terminated
upon Mr. Meyer's acceptance of employment with MINC. In June, 1998, the
Company purchased and terminated these options for $200,000.
 
  The Company had an employment agreement pursuant to which Philip A. Tanzar
served, effective December 31, 1995, as the Registrant's Vice President and
General Counsel for a base annual compensation of $138,200 for a term ending
December 31, 1996. In the event that the terms of Mr. Tanzar's employment were
not extended by the Registrant for reasons other than "good cause," on terms
substantially equivalent to the current terms, the Registrant was obligated to
pay Mr. Tanzar a severance of $100,000. Effective July 1, 1996 Mr. Tanzar
accepted employment at MINC, thereby terminating his employment contract with
the Registrant. As an inducement for Mr. Tanzar to accept employment with MINC
and as a settlement of his contract, the Registrant has agreed to pay him up
to $100,000 as severance if he is terminated by MINC prior to January 1, 1999.
 
  The Company has guaranteed certain liabilities of a limited partnership to
Qwest/LCI, International. The general partner of this limited partnership is
an officer of the Company. There is no maximum amount payable under this
guarantee. However, the Company does not expect that the potential liability
will exceed $100,000 based on the business of the limited partnership.
 
                                      14
<PAGE>
 
                                    PART IV
 
ITEM 14--EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
  (a) The following documents are filed as a part of this report:
 
  (1) FINANCIAL STATEMENTS:
 
    The following financial statements are attached to this Form 10-K
  commencing on page 17.
 
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
      <S>                                                                   <C>
      Report of Independent Public Accountants............................   17
      Consolidated Statements of Financial Condition as of June 30, 1998
       and 1997...........................................................   18
      Consolidated Statements of Operations for the Years Ended June 30,
       1998, 1997 and 1996................................................   19
      Consolidated Statements of Changes in Stockholders' Equity for the
       Years Ended June 30, 1998, 1997 and 1996...........................   20
      Consolidated Statements of Changes in Liabilities Subordinated to
       Claims of General Creditors for the Years Ended June 30, 1998, 1997
       and 1996...........................................................   21
      Consolidated Statements of Cash Flows for the Years Ended June 30,
       1998, 1997 and 1996................................................   22
      Notes to Consolidated Financial Statements..........................   24
</TABLE>
 
  (2) SCHEDULES
 
  Schedule II--Valuation and qualifying accounts
 
  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.
 
  (3) EXHIBITS
 
    The following exhibits required by Item 601 of Regulation S-K to be filed
  herewith are incorporated by reference to previously filed documents:
 
<TABLE>
<CAPTION>
    EXHIBIT NO.        DESCRIPTION
    -----------        -----------
    <C>         <S>                        <C>
                THE FOLLOWING EXHIBITS
                ARE HEREBY INCORPORATED
                BY REFERENCE FROM FORM
                10-K FOR THE REGISTRANT
                AS FILED ON SEPTEMBER
                27, 1995 WITH THE SECU-
                RITIES AND EXCHANGE COM-
                MISSION:
    10.38       Employment agreement,
                dated September 14,
                1994, between Jack
                Carl/312-Futures, Inc.
                and Allyson D. Laackman
    10.39       Employment agreement,
                dated July 1, 1995, be-
                tween Jack Carl/312-
                Futures, Inc. and
                Allyson D. Laackman
    10.40       Letter containing terms
                of employment, dated
                January 27, 1995, be-
                tween Index Futures
                Group (UK) Limited and
                Charles Romilly
    10.41       Letter of understanding,
                dated July 1, 1995, be-
                tween Index Futures
                Group, Inc. and Michael
                Moss
                THE FOLLOWING EXHIBITS
                ARE HEREBY INCORPORATED
                BY REFERENCE FROM FORM
                10-K/A FOR THE REGIS-
                TRANT AS FILED ON JANU-
                ARY 14, 1997 WITH THE
                SECURITIES AND EXCHANGE
                COMMISSION:
    10.42       Employment agreement,
                dated December 31, 1995,
                between Jack Carl/312-
                Futures, Inc. and Philip
                A. Tanzar
</TABLE>
 
                                       15
<PAGE>
 
<TABLE>
<CAPTION>
   EXHIBIT NO.        DESCRIPTION
   -----------        -----------
   <C>         <S>                        <C>
   10.43       Heads of Agreement,
               dated July 19, 1995 be-
               tween Jack Carl/312-
               Futures, Inc., Simon
               Drabble, Graham
               Wellesley and Lorenzo
               Naldini
   10.44       Service Agreement, dated
               July 19, 1995 between
               Index Forex Limited and
               Simon Drabble, Graham
               Wellesley and Lorenzo
               Naldini
               THE FOLLOWING EXHIBITS
               ARE HEREBY INCORPORATED
               BY REFERENCE FROM FORM
               10-Q FOR THE REGISTRANT
               AS FILED ON MAY 14, 1997
               WITH THE SECURITIES AND
               EXCHANGE COMMISSION:
   10.51       Termination Letter dated
               November 28, 1996 be-
               tween IFX and Simon
               Drabble
   10.52       Terms of Employment
               dated January 1, 1997
               between IFX and Charles
               Romilly
   10.53       Memorandum of Agreement
               dated March 12, 1997 be-
               tween IFX and Lorenzo
               Naldini and Graham
               Wellesley
   10.54       Service Agreement dated
               March 12, 1997 between
               IFX and Graham Wellesley
   10.55       Service Agreement dated
               March 12, 1997 between
               IFX and Lorenzo Naldini
   10.56       Settlement Letter dated
               April 22, 1997 between
               IFX and Lorenzo Naldini
   10.57       Settlement Letter dated
               April 22, 1997 between
               IFX and Graham Wellesley
               THE FOLLOWING EXHIBITS
               ARE HEREBY INCORPORATED
               BY REFERENCE FROM FORM
               8-K FOR THE REGISTRANT
               AS FILED ON AUGUST 1,
               1997 WITH THE SECURITIES
               AND EXCHANGE COMMISSION:
   10.58       Stockholders Agreement
               between IFX Corporation,
               IFX Ltd. and the Park
               Trust
               THE FOLLOWING EXHIBITS
               ARE FILED AS PART OF
               THIS FORM 10-K AS OF
               JUNE 30, 1998:
   11.1        Computation of Earnings
               per Common Share
   21.1        Subsidiaries of the Reg-
                  istrant
   24.1        Power of Attorney (in-
                  cluded on signature
                  page)
   27          Financial Data Schedule
                  (Edgar Version Only)
</TABLE>
 
  (b) REPORTS ON FORM 8-K:
 
    The Registrant did not file any reports on Form 8-K during the fourth
  quarter of fiscal 1998.
 
                                       16
<PAGE>
 
                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
To the Stockholders of
IFX Corporation
and Subsidiaries:
 
  We have audited the accompanying consolidated statements of financial
condition of IFX Corporation (a Delaware corporation) and subsidiaries ("the
Company") as of June 30, 1998 and 1997, and the related consolidated
statements of operations, changes in stockholders' equity, changes in
liabilities subordinated to claims of general creditors and cash flows for the
years ended June 30, 1998, 1997 and 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
 
  We conducted our audits in accordance with generally accepted auditing
standards. 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 financial position of IFX Corporation and
Subsidiaries as of June 30, 1998 and 1997, and the results of their operations
and their cash flows for the years ended June 30, 1998, 1997 and 1996, in
conformity with generally accepted accounting principles.
 
                                          /s/ Arthur Andersen LLP
 
Chicago, Illinois,
September 16, 1998
 
                                      17
<PAGE>
 
                        IFX CORPORATION AND SUBSIDIARIES
 
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
                             JUNE 30, 1998 AND 1997
 
<TABLE>
<CAPTION>
                       ASSETS                            1998         1997
                       ------                         -----------  -----------
<S>                                                   <C>          <C>
Cash................................................  $   535,200  $ 3,279,300
U.S. Government obligations.........................    5,311,300    1,527,100
Other short term investments........................   30,757,500   44,875,100
Receivables:
  Brokers and dealers...............................  $ 4,573,100  $ 2,911,600
  Customers.........................................    1,646,800    1,422,900
  Affiliates........................................       54,600          --
  Other.............................................    1,452,600    1,503,300
  Less--Allowance for doubtful accounts.............     (358,900)    (430,000)
                                                      -----------  -----------
                                                        7,368,200    5,407,800
Investments in and advances to affiliated
 partnerships.......................................      134,200       50,000
Notes receivable....................................      811,400      618,900
Furniture, equipment, and leasehold improvements,
 net of accumulated depreciation and amortization of
 $298,800 in 1998 and $2,326,000 in 1997............      143,000      269,000
Other assets........................................      293,100      373,000
                                                      -----------  -----------
    Total...........................................  $45,353,900  $56,400,200
                                                      ===========  ===========
<CAPTION>
        LIABILITIES AND STOCKHOLDERS' EQUITY
        ------------------------------------
<S>                                                   <C>          <C>
Payables:
  Brokers and dealers...............................  $   863,100  $ 1,068,200
  Customers and counterparties......................   29,632,900   41,284,600
  Affiliates and employees..........................          --        57,900
Accounts payable and accrued expenses...............    1,601,200    3,163,600
Notes payable.......................................          --     1,586,600
                                                      -----------  -----------
    Total...........................................   32,097,200   47,160,900
                                                      -----------  -----------
Minority Interest...................................    1,921,500    1,035,600
                                                      -----------  -----------
Stockholders' equity:
  Common stock, (restated for reverse-split) $.02
   par value; 150,000,000 shares authorized,
   6,155,539 and 6,279,130 shares issued and
   outstanding in 1998 and 1997, respectively.......      123,100      125,600
Paid-in capital and retained earnings...............   11,212,100    8,078,100
                                                      -----------  -----------
    Total stockholders' equity......................   11,335,200    8,203,700
                                                      -----------  -----------
    Total...........................................  $45,353,900  $56,400,200
                                                      ===========  ===========
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       18
<PAGE>
 
                        IFX CORPORATION AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                FOR THE YEARS ENDED JUNE 30, 1998, 1997 AND 1996
 
<TABLE>
<CAPTION>
                                           1998         1997         1996
                                        -----------  -----------  -----------
<S>                                     <C>          <C>          <C>
Revenues:
  Commissions.......................... $ 1,182,400  $   199,200  $30,606,500
  Interest.............................   3,094,100    3,870,100    7,920,800
  Trading gains, net...................   6,875,000    9,211,100    2,411,400
  Earn-out from Sale of Assets.........   4,159,600    2,157,900          --
  Other................................     154,000    1,110,700      196,200
                                        -----------  -----------  -----------
    Total revenues.....................  15,465,100   16,549,000   41,134,900
                                        -----------  -----------  -----------
Expenses:
  Commissions, floor brokerage and
   clearing costs......................     972,100      365,700   16,825,600
  Compensation and related benefits....   2,626,000    3,622,400   10,536,500
  Interest.............................   1,921,000    3,013,600    4,238 900
  Communications.......................     563,300      735,700    2,066,800
  Business promotion...................     455,300      478,600    2,173,900
  Rent and other occupancy costs.......     774,000      629,800    1,546,300
  Professional and consulting fees.....     978,100      624,900      670,400
  Depreciation.........................     176,300      111,800      320,800
  Amortization of goodwill.............         --           --        53,600
  Doubtful accounts expense (benefit)..       2,700     (119,300)     140,600
  Other................................     422,500      730,900    2,312,200
  Restructuring charge, net............         --           --     1,556,500
                                        -----------  -----------  -----------
    Total expenses.....................   8,891,300   10,194,100   42,442,100
                                        -----------  -----------  -----------
Income (loss) before income taxes and
 minority interest.....................   6,573,800    6,354,900   (1,307,200)
Income tax expense (benefit)...........   2,169,200    2,235,500     (174,100)
                                        -----------  -----------  -----------
Net income (loss) before minority
 interest..............................   4,404,600    4,119,400   (1,133,100)
Minority Interest......................  (1,037,900)    (935,600)         --
                                        -----------  -----------  -----------
Net income (loss)......................   3,366,700    3,183,800   (1,133,100)
Assumed cumulative dividend on Class A
 preferred stock ......................         --       (23,300)     (40,000)
                                        -----------  -----------  -----------
Net income (loss) applicable to common
 stock................................. $ 3,366,700  $ 3,160,500  $(1,173,100)
                                        ===========  ===========  ===========
Basic earnings (loss) per share,
 restated for reverse split:
  Net income (loss).................... $       .54  $       .48  $      (.17)
                                        ===========  ===========  ===========
  Weighted average number of shares
   outstanding.........................   6,246,545    6,616,893    6,744,236
Diluted earnings (loss) per share,
 restated for reverse split:
  Net income (loss).................... $       .54  $       .48  $      (.17)
                                        ===========  ===========  ===========
  Weighted average number of shares
   outstanding                            6,246,545    6,616,893    6,744,236
                                        ===========  ===========  ===========
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       19
<PAGE>
 
                        IFX CORPORATION AND SUBSIDIARIES
 
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
 
                FOR THE YEARS ENDED JUNE 30, 1998, 1997 AND 1996
 
<TABLE>
<CAPTION>
                           CLASS A      COMMON STOCK                   RETAINED
                          PREFERRED  -------------------   PAID-IN     EARNINGS
                            STOCK     SHARES     AMOUNT    CAPITAL     (DEFICIT)      TOTAL
                          ---------  ---------  --------  ----------  -----------  -----------
<S>                       <C>        <C>        <C>       <C>         <C>          <C>
Balance June 30, 1995...  $400,000   6,724,906  $134,500  $8,395,300  $(1,565,700) $ 7,364,100
Net loss................       --          --        --          --    (1,133,100)  (1,133,100)
Foreign currency
 translation ...........       --          --        --      (14,500)         --       (14,500)
                          --------   ---------  --------  ----------  -----------  -----------
Balance June 30, 1996...  $400,000   6,724,906  $134,500  $8,380,800  $(2,698,800) $ 6,216,500
                          ========   =========  ========  ==========  ===========  ===========
Repurchase of common
 stock..................              (445,776)   (8,900)   (319,900)         --      (328,800)
Retirement of Class A
 Preferred Stock........  (400,000)        --        --          --           --      (400,000)
Repayment of Preferred
 Stock dividends........       --          --        --          --      (436,600)    (436,600)
Net income..............       --          --        --          --     3,183,800    3,183,800
Foreign currency
 translation............       --          --        --      (31,200)         --       (31,200)
                          --------   ---------  --------  ----------  -----------  -----------
Balance June 30, 1997...  $    --    6,279,130  $125,600  $8,029,700  $    48,400  $ 8,203,700
                          ========   =========  ========  ==========  ===========  ===========
Repurchase of fractional
 shares pursuant to one-
 for-five reverse split.       --          (11)      --          --           --           --
Repurchase of common
 stock and odd-lots.....       --     (123,580)   (2,500)   (232,700)         --      (235,200)
Net Income..............       --          --        --          --     3,366,700    3,366,700
                          --------   ---------  --------  ----------  -----------  -----------
Balance June 30, 1998...  $    --    6,155,539  $123,100  $7,797,000  $ 3,415,100  $11,335,200
                          ========   =========  ========  ==========  ===========  ===========
</TABLE>
 
 
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       20
<PAGE>
 
                        IFX CORPORATION AND SUBSIDIARIES
 
               CONSOLIDATED STATEMENTS OF CHANGES IN LIABILITIES
                  SUBORDINATED TO CLAIMS OF GENERAL CREDITORS
 
                FOR THE YEARS ENDED JUNE 30, 1998, 1997 AND 1996
 
<TABLE>
<S>                                                                 <C>
Balance, June 30, 1995............................................. $ 1,690,000
New borrowings.....................................................   4,000,000
Maturities.........................................................  (1,690,000)
                                                                    -----------
Balance, June 30, 1996............................................. $ 4,000,000
Repayments.........................................................  (4,000,000)
                                                                    -----------
Balance, June 30, 1997............................................. $       -0-
                                                                    ===========
Balance, June 30, 1998............................................. $       -0-
                                                                    ===========
</TABLE>
 
 
 
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       21
<PAGE>
 
                        IFX CORPORATION AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                FOR THE YEARS ENDED JUNE 30, 1998, 1997 AND 1996
 
<TABLE>
<CAPTION>
                                           1998          1997           1996
                                       ------------  -------------  ------------
<S>                                    <C>           <C>            <C>
Cash Flows From Operating Activities:
  Net income (loss)..................  $  3,366,700  $   3,183,800  $ (1,133,100)
  Adjustments to reconcile net income
   (loss) to net cash provided by
   (used in) operating activities:
    Depreciation and amortization....       176,300         83,200       374,400
    Deferred taxes...................       179,900        334,500      (272,300)
    Doubtful accounts expense
     (benefit).......................       (71,000)        20,700       140,600
    Equity in net (gain) loss of
     affiliated partnerships.........       (70,200)           --         (6,400)
    Gain on sale of clearing
     corporation stock...............           --        (664,000)          --
    Gain on sale of exchange
     memberships, net................           --         (73,700)          --
    Restructuring charge, net........           --             --      1,556,500
  Changes in:
    Cash segregated or secured under
     Commodity Exchange Act..........           --       2,009,500      (827,800)
    U.S. Government obligations......    (3,784,200)   142,801,700   (61,443,200)
    Other short term investments.....    14,117,600    (16,019,000)  (28,856,100)
    Deposits with clearing
     organizations...................           --      43,128,500    34,542,200
    Warehouse receipts...............           --         959,500       577,700
    Receivables......................    (1,834,600)    11,041,800     6,620,400
    Other assets.....................        79,900        130,000        92,800
    Payables.........................   (11,969,400)  (177,328,800)   48,828,800
    Accounts payable and accrued
     expenses........................    (1,742,300)      (715,900)   (1,699,000)
                                       ------------  -------------  ------------
      Cash provided by (used in)
       operating activities..........    (1,551,400)     8,891,800    (1,504,500)
                                       ------------  -------------  ------------
Cash Flows From Investing Activities:
  (Increase) decrease in investments
   in and advances to affiliated
   partnerships......................       (14,000)       (50,000)       45,500
  Decrease in notes receivable.......      (192,500)         8,300         6,500
  Proceeds from sale of exchange
   memberships.......................           --         855,000           --
  Purchase of furniture, equipment
   and leasehold improvements........       (50,300)      (188,900)     (290,600)
  Proceeds from sale of furniture and
   equipment.........................           --         116,200           --
  Proceeds from sale of clearing
   corporation stock.................           --       1,024,000           --
                                       ------------  -------------  ------------
      Cash provided by (used in)
       investing activities..........      (256,800)     1,764,600      (238,600)
                                       ------------  -------------  ------------
Cash Flows From Financing Activities:
  Increase in short term advance.....           --             --      1,000,000
  Repayment of short term advance....           --             --     (1,000,000)
  Increase in liabilities
   subordinated to claims of general
   creditors.........................           --             --      3,000,000
  Repayment of liabilities
   subordinated to claims of general
   creditors.........................           --      (4,000,000)     (690,000)
  Repayments of notes payable........    (1,586,600)    (5,640,000)          --
  Repurchase of common stock.........      (235,200)      (328,800)          --
  Minority interest..................       885,900      1,035,600           --
                                       ------------  -------------  ------------
      Cash provided by (used in)
       financing activities..........      (935,900)    (8,933,200)    2,310,000
                                       ------------  -------------  ------------
Effect of exchange rate changes on
 cash................................           --         (31,200)      (14,500)
                                       ------------  -------------  ------------
Increase (decrease) in cash..........    (2,744,100)     1,692,000       552,400
Cash, beginning of period............     3,279,300      1,587,300     1,034,900
                                       ------------  -------------  ------------
Cash, end of period..................  $    535,200  $   3,279,300  $  1,587,300
                                       ============  =============  ============
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                       22
<PAGE>
 
                        IFX CORPORATION AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                FOR THE YEARS ENDED JUNE 30, 1998, 1997 AND 1996
 
SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING
AND FINANCING ACTIVITIES
 
 1998
 
  None.
 
 1997
 
  In January, 1997, notes payable aggregating $5,450,000 due January 31, 1997
were extended to January 31, 1998. $4,700,000 of these notes payable were
repaid prior to June 30, 1997.
 
  Also in January, 1997, a note payable for $836,600 was issued to the
Company's principal stockholder as payment for the redemption of preferred
stock and dividends accrued thereon.
 
 1996
 
  Notes payable aggregating $6,390,000 due January 31, 1996 were extended to
January 31, 1997.
 
  In February, 1996, $1,000,000 of a $1,690,000 subordinated loan was extended
to February 24, 1997. The remaining $690,000 was repaid.
 
                                       23
<PAGE>
 
                       IFX CORPORATION AND SUBSIDIARIES
 
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
NOTE 1--ORGANIZATION OF IFX CORPORATION
 
  Until July 1, 1996, IFX Corporation ("formerly Jack Carl/312-Futures,
Inc."), through its subsidiaries, engaged principally in the business of
effecting transactions in futures and options on futures contracts for the
accounts of customers and the operation of commodity pools. Index Futures
Group, Inc. ("Index"), until July 1, 1996, was the principal operating
subsidiary of Jack Carl/312-Futures, Inc. Effective July 1, 1996, Index sold,
transferred and assigned substantially all of its brokerage accounts ("Sale of
Assets") to E.D. & F. Man International Inc. ("MINC"). Index ceased being a
registered futures commission merchant with the Commodity Futures Trading
Commission ("CFTC") in December, 1996. As a condition of the Sale, Index
changed its name to FX Chicago, Inc. ("FX Chicago"). IFX Ltd., (formerly Index
FX, Ltd.), a British corporation and a majority owned subsidiary of IFX
Corporation, continues to conduct foreign exchange business as a registrant of
the British Securities and Futures Authority. Another subsidiary of IFX
Corporation was a registered broker-dealer until it withdrew its registration
in April 1997. In addition, the Company formed a new wholly owned subsidiary
during the past year, IFX/Telcom, Inc. The Company intends to utilize
IFX/Telcom, Inc. as its holding company for any internet or telecommunication
related ventures into which it may enter (if any). However, at the present
time, IFX/Telcom, Inc. has no assets, liabilities, revenues or activity and
there can be no assurance that IFX/Telcom, Inc. will enter into any business
activities in the future.
 
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Principles of Consolidation
 
  The consolidated financial statements include the accounts of IFX
Corporation and its wholly-owned subsidiary, FX Chicago, as well as those of
its majority-owned subsidiaries, IFX, Ltd. and Stark Research, Inc. At the
present time, IFX/Telcom, Inc. has no assets, liabilities, revenues or
activity. All material intercompany accounts and transactions are eliminated
in consolidation. Brokers Resource Corp., Index Securities, Inc. and Jack Carl
Management and Trading, Inc., all former subsidiaries of IFX Corporation, were
dissolved during fiscal 1996 and 1997.
 
 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
 
  Foreign exchange revenue is recorded on a per transaction basis, based upon
marking underlying positions to market. Such revenue is included in trading
gains on the Statements of Operations.
 
  Commission revenues on commodity futures and options transactions and
related commission expenses were recorded on a half-turn basis.
 
 U.S. Government Obligations and other Short-term Investments
 
  U.S. Government obligations and other short-term investments are valued at
market. The change in unrealized appreciation on house and customer funds
invested is reflected in interest income.
 
                                      24
<PAGE>
 
                        IFX CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
 Investments in Partnerships
 
  The investments in partnerships are accounted for on the equity method.
 
 Furniture, Equipment and Leasehold Improvements
 
  Furniture and equipment are depreciated using the straight-line method over
the estimated useful lives of the assets. Leasehold improvements are amortized
using the straight-line method over the lesser of their useful lives or the
remaining terms of the leases. See Note 14 for the effect of the Sale of Assets
on furniture, equipment and leasehold improvements.
 
 Goodwill
 
  Prior to the Sale of Assets, the excess of cost over estimated fair value of
net assets acquired was reflected as goodwill and was being amortized over
twenty years. Goodwill arose as a result of business combinations which
occurred in 1985 and 1986. As a result of the Sale of Assets, the remaining
goodwill was written off as of June 30, 1996. See Note 14 for further
information.
 
 Income Taxes
 
  Deferred income taxes are provided to reflect the tax effects of timing
differences between financial and tax reporting. The nature of the timing
differences are discussed in Note 8.
 
 Reclassification
 
  Certain amounts previously reported have been reclassified to conform to the
current method of presentation.
 
 Earnings per Common Share
 
  In fiscal 1998, the Company adopted Statement of Financial Accounting
Standards No. 128. "Earnings Per Share" (FAS No. 128), which establishes
standards for computing and presenting earnings per share ("EPS"). FAS No. 128
replaces the presentation of primary EPS with a presentation of basic EPS.
Basic EPS excludes dilution and is computed by dividing income available to
common shareholders by the weighted-average number of common shares outstanding
for the period. FAS No. 128 also requires presentation of diluted EPS which is
computed similarly to fully diluted EPS previously presented. The adoption of
FAS No. 128 did not have a material impact on the Company's EPS or EPS trends
and comparisons.
 
 Recent Accounting Pronouncements
 
  In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130. "Reporting Comprehensive Income" (FAS
No. 130). This statement establishes standards for the reporting and display of
comprehensive income and its components. This statement is effective for fiscal
years beginning after December 15, 1997. The Company will adopt this statement
in fiscal 1999. Adoption will require additional disclosure, but will not have
a material effect on the Company's financial position or results of operations.
 
  In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133. "Accounting for Derivative Instruments
and Hedging Activities" (FAS No. 133), which establishes standards for
reporting and displaying derivatives and hedging. This statement is effective
for all
 
                                       25
<PAGE>
 
                       IFX CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
fiscal quarters of fiscal years beginning after June 15, 1999. The Company
does not believe that the application of this statement will have a
significant impact on the financial position, results of operations or
financial statement disclosures of the Company.
 
NOTE 3--OTHER SHORT-TERM INVESTMENTS
 
  Other short-term investments consist of $30,757,500 and $44,875,100 of time
deposits at June 30, 1998 and 1997, maturing at various dates through July,
1998 and 1997, respectively.
 
NOTE 4--NOTES PAYABLE
 
  Notes payable at June 30, consist of the following:
 
<TABLE>
<CAPTION>
                                                                 1998    1997
                                                                 ---- ----------
      <S>                                                        <C>  <C>
      Principal stockholder, interest at prime, due January 31,
       1998....................................................  $--  $  836,600
      Affiliates and other related parties, interest at prime
       plus 4%, due: January 31, 1998..........................   --     750,000
                                                                 ---- ----------
          Total................................................   --  $1,586,600
                                                                 ==== ==========
</TABLE>
 
  The $750,000 note was repaid in September, 1997. The note for $836,600 was
repaid in February, 1998.
 
  Interest paid on notes payable during the years ended June 30, 1998, 1997
and 1996 was $53,900, $634,900 and $801,400, respectively, substantially all
of which was paid to related parties.
 
  The weighted average interest rates on short-term borrowings outstanding at
June 30, 1997 was 10.4%. The weighted average interest rate was calculated by
dividing interest expense by the related average amount outstanding in June.
 
NOTE 5--LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS
 
  Liabilities subordinated to claims of general creditors were borrowed in
accordance with the terms of a revolving subordinated debt line totaling
$4,000,000 as of June 30, 1996. The full amount of the borrowing was repaid in
August, 1996, and the line was canceled.
 
  Interest expense on liabilities subordinated to claims of general creditors
during the years ended June 30, 1998, 1997, and 1996 was $0, $38,100, and
$352,000 respectively.
 
NOTE 6--STOCKHOLDERS' EQUITY
 
 Class A Preferred Stock
 
  On January 31, 1997, the Company redeemed and retired the 400,000 issued and
outstanding shares of its Class A preferred stock, all of which were owned by
its principal stockholder. The preferred stock was redeemed at a price equal
to the aggregate par value thereof plus the cumulative but previously
undeclared and unpaid dividends thereon, totaling $836,600. As payment, the
Company issued its principal stockholder a promissory note bearing interest at
the prime rate and maturing on January 31, 1998, this note was repaid in
February, 1998.
 
 Common Stock
 
  On January 8, 1998, the Company effected a one-for-five reverse split of its
common stock, par value $.004, effective on January 12, 1998 (the "Effective
Date"). Each five shares of such common stock were reclassified
 
                                      26
<PAGE>
 
                       IFX CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
and reflected as one share of common stock having a par value of $.02, as of
January 12, 1998. Outstanding shares of the Company's common stock were
reduced to 6,279,130 shares from 31,395,649 shares outstanding before the
split.
 
  Any holder of fractional shares resulting from this reverse split will be
paid an amount equal to the mean between the bid and the offer prices for the
Company's Common Stock on the NASDAQ SmallCap market on the Effective Date
multiplied by the amount of the fractional share. The one-for-five reverse
split also resulted in certain shareholders owning "odd lots," that is, less
than one hundred shares of Common Stock. In order to reduce the
disproportionately high costs to the Company of servicing numbers of such
shareholder accounts, and to enable those shareholders to dispose of their
securities without incurring the brokerage fees that normally attend odd-lot
transactions, the Company offered to purchase from its shareholders all odd
lots (i.e., holdings of less one hundred shares). The purchase amount was
based upon the number of odd-lot shares multiplied by the mean between the bid
and offer prices on the date of purchase, without commissions. The Company
maintained its offer to repurchase such odd lots until February 26, 1998,
forty-five days immediately following the Effective Date. As a result of the
odd-lot offer, the Company repurchased approximately 3,500 shares.
 
  The Company continues to repurchase and retire shares of its common stock,
pursuant to a repurchase program which permits the Company to purchase up to
1,000,000 shares. Pursuant to this program, the Company repurchased and
retired 120,070 shares for $228,100 during fiscal 1998. During fiscal 1997,
the Company repurchased and retired 445,776 shares (as adjusted for the one-
for-five reverse split) for $328,800.
 
  As a result of the repurchase of fractional shares and odd-lots, as well as
the repurchase and retirement of shares, outstanding shares of common stock as
of June 30, 1998 totaled 6,155,539.
 
 Stock Option Plan
 
  In March, 1986, the Company adopted an incentive stock option plan reserving
100,000 shares (as adjusted for the one-for-five reverse split) of common
stock. The Company also has granted options other than in accordance with the
March 1986 incentive stock option plan.
 
  In November, 1996, the Board of Directors authorized the issuance of options
for 250,000 shares of common stock at $1.20 per share, terminating June 30,
1998. These options replaced those that were originally issued in February,
1994 and terminated upon the former President accepting employment with MINC.
In June, 1998, the Company purchased and terminated these options for
$200,000. All other previously issued options expired upon termination of
former employees. As a result, there are no outstanding options as of June 30,
1998.
 
NOTE 7--RELATED PARTY TRANSACTIONS
 
  A note receivable in the amount of $811,400 arose in connection with
advances made by the Company to an affiliated entity. These demand receivables
were converted into a demand note bearing interest at 8% and was subsequently
changed to the prime rate of interest. The Company earned $52,400, $51,700,
and $53,500 of interest income on this note during the years ended June 30,
1998, 1997 and 1996, respectively.
 
  The Company receives funds, in the form of loans, from its principal
shareholder, an affiliated company and, prior to the Sale of Assets, an
officer and director of the Company. See Note 4 for the terms and balances at
June 30, 1998 and 1997.
 
                                      27
<PAGE>
 
                        IFX CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
NOTE 8--INCOME TAXES
 
  The provision for Federal income taxes for each of the years ended June 30,
is as follows:
 
<TABLE>
<CAPTION>
                                                   1998       1997      1996
                                                ---------- ---------- ---------
      <S>                                       <C>        <C>        <C>
      Current.................................. $1,989,300 $1,901,000 $  98,200
      Deferred.................................    179,900    334,500  (272,300)
                                                ---------- ---------- ---------
          Total provision...................... $2,169,200 $2,235,500 $(174,100)
                                                ========== ========== =========
</TABLE>
 
  State income tax expense is immaterial for the years ended June 30, 1998,
1997 and 1996.
 
  Reconciliation of the total provision for income taxes to the Federal
statutory rate for the years ended June 30, is as follows:
 
<TABLE>
<CAPTION>
                                  1998              1997             1996
                             ----------------  ---------------  ----------------
                               AMOUNT     %      AMOUNT    %     AMOUNT      %
                             ----------  ----  ---------- ----  ---------  -----
   <S>                       <C>         <C>   <C>        <C>   <C>        <C>
   At Federal statutory
    rate...................  $2,300,800  35.0  $2,160,700 34.0  $(444,400)  34.0
   Dividends from foreign
    subsidiary.............    (225,000) (3.4)     60,000  1.0        --     --
   Amortization of
    goodwill...............         --    --          --   --     184,300  (14.1)
   Non-taxable translation
    gain...................         --    --          --   --     (10,600)    .8
   Additional tax due IRS
    for 1987-1989
    settlement.............         --    --          --   --      30,300   (2.3)
   Non-deductible travel
    and entertainment......      50,000    .8      14,800   .2     18,000   (1.4)
   Non-deductible loss of
    majority-owned
    subsidiary.............         --    --          --   --       6,000    (.5)
   Additional provision for
    current and deferred
    taxes..................      33,600    .5         --   --      32,500   (2.4)
   Other, net..............       9,800    .1         --   --       9,800    (.8)
                             ----------  ----  ---------- ----  ---------  -----
       Net amounts.........  $2,169,200  33.0% $2,235,500 35.2% $(174,100)  13.3%
                             ==========  ====  ========== ====  =========  =====
</TABLE>
 
  The primary components of the Company's deferred tax assets and liabilities
are as follows:
 
<TABLE>
<CAPTION>
                                                          JUNE 30,   JUNE 30,
                                                            1998       1997
                                                          ---------  ---------
   <S>                                                    <C>        <C>
   Deferred income tax assets:
     Bad debt reserve.................................... $  38,500  $  61,600
     Book and tax depreciation difference................    56,300     54,600
     Accrued operating expenses..........................    38,200    115,000
     Accrued legal expense...............................    25,900     29,000
                                                          ---------  ---------
       Total deferred tax assets......................... $ 158,900  $ 260,200
                                                          =========  =========
   Deferred income tax liabilities:
     Accrued income--Sale of Assets...................... $(383,100) $(303,500)
     State and foreign taxes.............................   (12,400)   (19,800)
     Other, net..........................................    (8,600)    (2,200)
                                                          ---------  ---------
       Total deferred tax liabilities.................... $(404,100) $(325,500)
       Net deferred tax liabilities...................... $(245,200) $ (65,300)
                                                          =========  =========
</TABLE>
 
  No valuation allowance has been provided as management believes deferred tax
assets are realizable.
 
                                       28
<PAGE>
 
                       IFX CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
NOTE 9--COMMITMENTS AND CONTINGENCIES
 
  The Company has two noncancellable leases for office space. The Company's
lease for space in London expires in the year 1999, and its lease for space in
Chicago expires in the year 2002. Minimum annual rentals, excluding
escalations and increases in operating expenses and taxes, are as follows:
 
<TABLE>
<CAPTION>
             YEAR ENDING JUNE 30,             AMOUNT
             --------------------             ------
             <S>                            <C>
             1999.......................... $  530,500
             2000..........................    362,300
             2001..........................    374,000
             2002..........................    384,400
             2003 and thereafter...........    465,500
                                            ----------
                 Total..................... $2,116,700
                                            ==========
</TABLE>
 
  Subsequent to June 30, 1998, the Company subleased its office space in
Chicago, through the end of the lease term. The Company has signed a sublease
to occupy a much smaller space in Chicago through June 1999, providing for
aggregate lease payments of approximately $70,000.
 
  The Company has entered into employment agreements which expire at varying
dates through fiscal 1999 with certain of its employees, providing for
aggregate minimum annual payments for the year ending June 30, 1999 of
approximately $272,000. The Company has also entered into a consulting
contract which expires during fiscal 1999, providing for aggregate minimum
payments totaling $26,000.
 
  As a result of the Sale of Assets, if certain conditions occur over the next
year, the Company may be subject to additional severance payments of up to
$100,000.
 
  A limited indemnification agreement was issued to MINC related to the Sale
of Assets. This agreement covers potential customer claims arising from
activity prior to the sale. See Note 14.
 
  The Company has guaranteed certain liabilities of a limited partnership to
Qwest/LCI, International. The general partner of this limited partnership is
an officer of the Company. There is no maximum amount payable under this
guarantee. However, the Company does not expect that the potential liability
will exceed $100,000 based on the business of the limited partnership.
 
NOTE 10--FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK AND CONCENTRATION
        OF CREDIT RISK
 
  IFX Ltd. conducts the majority of business for its customers in foreign
currencies on the spot market, in which trades generally settle on the next
business day. It also conducts a limited amount of business in foreign
currencies in the futures market. Futures contracts are short-term in nature.
As of June 30, 1998, the majority of IFX Ltd.'s futures transactions had an
expiration in September, 1998. IFX Ltd. offsets its customer positions to
manage its currency risk. It also requires certain customers to post margin
deposits. Management believes that with the trades settling the next business
day and the margin policy that IFX Ltd. employs, credit risk is reduced
substantially. At June 30, 1998 and 1997, respectively, IFX Ltd. held long
foreign currency positions with an aggregate notional value of $3,332,978,000
and $2,993,671,900 respectively and short foreign currency positions with an
aggregate notional value of $3,332,380,900 and $2,993,109,600 respectively.
The notional value of the foreign currency positions provides only a measure
of involvement in these types of transactions and does not represent the
amounts subject to various types of market risk, nor the future cash
requirements of these instruments.
 
  At June 30, 1998 and 1997, the IFX Ltd. foreign currency business was
transacted with several international financial institutions.
 
 
                                      29
<PAGE>
 
                        IFX CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
NOTE 11--LITIGATION
 
  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.
 
  On November 24, 1997, the trustee of a pension plan filed a Demand for
Arbitration with the National Futures Association against Index and several
other respondents, including an introducing broker guaranteed by Index. In the
Demand, the trustee alleges breach of fiduciary duty, churning,
misrepresentation, failure to supervise, breach of contract, aiding and
abetting, and violation of ERISA. Claimant seeks actual damages of $141,000 and
punitive damages of $460,000. The Company believes the claim is without merit
and will defend vigorously.
 
  On May 16, 1996, Index filed suit in the Circuit Court of Cook County--Law
Division against Doug Niemann, a former customer, for breach of contract,
seeking to recover a debit balance of $88,200 (Index Futures Group, Inc. v.
Doug Niemann, case no. 96L-5506). On January 14, 1997, Niemann filed a
counterclaim for $688,200. The Company believes that the counterclaim is
without merit and will defend vigorously.
 
  In April, 1994, Index without admitting or denying the allegations, paid
$100,000 to the CFTC, settling an administrative action filed on September 29,
1992. In a related action, the equity receiver of an alleged commodity pool
operator brought an action to recover losses of approximately $600,000,
alleging various theories such as constructive trust, negligence, breach of
fiduciary duty and conversion. On May 29, 1996, the district judge dismissed
the complaint in its entirety. On December 4, 1997, the Court of Appeals
affirmed the district judge's dismissal of all claims against Index. On January
13, 1998, the Court of Appeals denied the Supplemental Plaintiffs' request for
a rehearing of its appeal.
 
  A former officer of Index whose employment was terminated as a result of the
Sale of Assets rejected Index's severance payment offer. The officer had made a
demand for $500,000. The Company settled this case in July, 1997 for $75,000.
 
  A lawsuit was commenced in Germany against an affiliate of E.D. & F. Man
International Inc. ("MINC") by a German citizen seeking damages of Deutschmark
6,403,519.19 (approximately $4,000,000 given the exchange rate as of September
15, 1998). The Complaint arises out of transactions which occurred in an
account introduced by Index Futures Group, AG ("Index AG"), an introducing
broker of Index Futures Group, Inc., prior to the Sale of Assets. The Plaintiff
alleges that under German law, MINC's affiliate is successor to Index AG, and
thus assumed any liabilities of Index AG. Pursuant to the Sale of Assets
agreement, Index is responsible for any liability "arising out of any state of
facts with respect to such Assigned Contract existing on or prior to the
Closing Date". MINC has retained counsel in Germany to represent its interest
in this matter. As Index AG was an introducing broker of Index, and not a
former subsidiary of the Company or Index, the Company does not believe that it
will ultimately be liable for damages. However, as the Company received notice
of this suit on September 16, 1998, it does not have information as to the
extent of any potential liability under the suit or legal costs required to
defend such suit, at the present time.
 
NOTE 12--CAPITAL REQUIREMENTS
 
  IFX Ltd. became a registrant of the Securities and Futures Authority ("SFA")
in London during November, 1996. As such, IFX Ltd. is subject to the financial
resources requirements adopted and administered by the SFA. As of June 30, 1998
and 1997, IFX Ltd.'s financial resources, as defined by the SFA, were
$7,047,000 and $8,976,000, which was $4,233,000 and $6,040,000 in excess of its
requirements, respectively.
 
                                       30
<PAGE>
 
                        IFX CORPORATION AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)
 
 
NOTE 13--CASH FLOWS
 
  For purposes of reporting cash flows, cash does not include segregated or
secured cash, as defined in the Commodity Exchange Act. Interest paid during
the years ended June 30, 1998, 1997 and 1996 amounted to $1,921,000,
$3,013,600, and $4,043,800 respectively. The Company made income tax payments
in the amount of $2,390,000, $1,190,000, and $1,184,000 during the years ended
June 30, 1998, 1997 and 1996, respectively.
 
NOTE 14--SALE OF ASSETS
 
  On May 31, 1996, an agreement was reached to sell, transfer and assign to
MINC substantially all of the brokerage accounts maintained by Index, together
with all positions, securities and other assets held in or for such accounts
and other agreed-upon assets used in the conduct of the brokerage activities.
MINC is a unit of E.D.& F. Man Group, plc, a London-based international trading
and finance conglomerate. This sale was completed as of July 1, 1996. During
1997, Index ceased being a clearing member at all exchanges, and ceased being a
registered futures commission merchant.
 
  The purchase price payable by MINC in connection with this transaction is
based on a percentage of the net income (as defined in the sales agreement) of
the transferred activities during the sixty-six month period following the
sale. As the purchase price is contingent upon the future earnings of the
customer accounts sold, none of which is guaranteed, no gain on the sale was
reflected in the financial statements for the year ended June 30, 1996. Rather,
income will be recognized as earned over the five and one-half years after the
date of the sale. The sales contract required the principal shareholder to sign
a non-competition agreement. As compensation for providing such an agreement, a
portion of the purchase price was to be paid to the principal shareholder. The
principal shareholder irrevocably transferred his right to receive payments
under such agreement to the Company. Accordingly, a portion of the purchase
price which would otherwise have been received by the principal shareholder is
being included in revenue by the Company.
 
  A net pre-tax, restructuring charge of $1,556,500, related to the sale, was
reflected in the income statement for fiscal year 1996. As all restructuring
charges were expensed in 1996, no restructuring charges remain payable as of
June 30, 1998. Restructuring charges consisted of the following:
 
<TABLE>
      <S>                                                          <C>
      Write-off of remaining goodwill............................. $  (488,400)
      Accrue employee benefits related to terminated and
       transferred employees......................................    (643,700)
      Revalue of furniture, fixtures and equipment................    (373,100)
      Accrue lease obligation.....................................    (154,600)
      Accrue legal expenses related to the sale...................    (110,000)
      Write-off printing stock....................................     (97,100)
      Reduce bonus accrual, related to terminated and transferred
       employees..................................................     195,000
      Write-off deferred rent for assumed lease...................      65,200
      Reduce business promotion accruals..........................      50,200
                                                                   -----------
          Total restructuring charge in fiscal 1996............... $(1,556,500)
                                                                   ===========
</TABLE>
 
  In addition, in conjunction with the sale, the Company issued a limited
indemnification agreement to MINC. The agreement covers potential customer
claims arising from activity prior to the sale.
 
  Given the Sale of Assets, the Company no longer has a need to own exchange
memberships or clearing corporation stock. All memberships and stock owned as
of June 30, 1996 were sold during fiscal 1997 at a net gain of $737,700.
 
  During the years ended June 30, 1998 and 1997, the Company earned $4,159,600
and $2,157,900, respectively, from the Sale of Assets. Such earnings are
included in other revenue in the Statements of Operations.
 
                                       31
<PAGE>
 
                                                                     SCHEDULE II
 
                        IFX CORPORATION AND SUBSIDIARIES
 
                       VALUATION AND QUALIFYING ACCOUNTS
 
<TABLE>
<CAPTION>
                                        ADDITIONS
                                   ---------------------
                                    CHARGED
                                      TO
                          BALANCE  (BENEFITS  CHARGED TO                 BALANCE
                            AT      AGAINST)    OTHER                     AT END
                         BEGINNING COSTS AND   ACCOUNTS    DEDUCTIONS       OF
DESCRIPTION              OF PERIOD EXPENSES   (DESCRIBE)   (DESCRIBE)     PERIOD
-----------              --------- ---------  ----------   ----------    --------
<S>                      <C>       <C>        <C>          <C>           <C>
Allowance for doubtful
 accounts
  For the year ended
   June 30, 1998........ $430,000  $   6,200        --      $(77,300)(a) $358,900
  For the year ended
   June 30, 1997........ $409,300  $(119,300)  $149,600(b)  $ (9,600)(a) $430,000
  For the year ended
   June 30, 1996........ $191,900  $ 140,600   $144,800(b)  $(68,000)(a) $409,300
</TABLE>
--------
(a) Uncollected receivables written off.
(b) Collection of receivables previously written off.
 
                                       32
<PAGE>
 
                                  SIGNATURES
 
  PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
 
                                          IFX Corporation
 
                                                /s/ Christina S. Donka
                                          By: _________________________________
                                                    Christina S. Donka
                                                 Chief Financial Officer
 
Date: September 16, 1998
 
                               POWER OF ATTORNEY
 
  EACH PERSON WHOSE SIGNATURE APPEARS BELOW HEREBY CONSTITUTES AND APPOINTS
CHRISTINA S. DONKA HIS TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENT, WITH FULL
POWER OF SUBSTITUTION AND RESUBSTITUTION FOR HIM OR HER IN HIS OR HER NAME,
PLACE AND STEAD, IN ANY AND ALL CAPACITIES, TO SIGN THIS FORM 10-K AND ALL
AMENDMENTS THERETO AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER
DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES EXCHANGE ACT OF 1934.
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
FORM 10-K 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/ Christina S. Donka          Chief Financial Officer       September 16, 1998
____________________________________  (Principal Financial and
         Christina S. Donka           Accounting Officer)
 
     /s/ Joel M. Eidelstein          President and Director        September 16, 1998
____________________________________  (Principal Executive
         Joel M. Eidelstein           Officer)
 
       /s/ George A. Myers           Director                      September 16, 1998
____________________________________
          George A. Myers
 
       /s/ Colleen Downes            Vice President and Director   September 16, 1998
____________________________________
           Colleen Downes
 
        /s/ Zalman Lekach            Director                      September 16, 1998
____________________________________
           Zalman Lekach
 
</TABLE>
 
                                      33