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

                                    FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 2002
                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


Commission File No.                 000-31359
                    ------------------------------------------------------------


                                CORECOMM LIMITED
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                        Delaware                                 23-3032245
---------------------------------------------                ----------------
(State or other jurisdiction of incorporation                (I.R.S. Employer
  or organization)                                          Identification No.)


110 East 59th Street, New York, New York                           10022
-----------------------------------------------------------------------------
(Address of principal executive offices)                        (Zip Code)


                                 (212) 906-8485
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                          Yes X                   No
                             ---                    ---

The number of shares  outstanding  of the issuer's  common stock as of March 31,
2002 was 141,655,388.

<PAGE>

                        CoreComm Limited and Subsidiaries

                                      Index

<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION                                                        Page
------------------------------                                                        ----

<S>                                                                                  <C>
Item 1.  Financial Statements
         Condensed Consolidated Balance Sheets -
            March 31, 2002 (Unaudited) and December 31, 2001 ........................   2
         Condensed Consolidated Statements of Operations -
            Three months ended March 31, 2002 and 2001 (Unaudited) ..................   3
         Condensed Consolidated Statement of Shareholders' Deficiency -
            Three months ended March 31, 2002 (Unaudited) ...........................   4
         Condensed Consolidated Statements of Cash Flows -
            Three months ended March 31, 2002 and 2001 (Unaudited) ..................   5
         Notes to Unaudited Condensed Consolidated Financial Statements .............   6

Item 2.  Management's Discussion and Analysis of Results of
             Operations and Financial Condition .....................................  19

Item 3.  Quantitative and Qualitative Disclosures about Market Risk .................  25

PART II. OTHER INFORMATION
--------------------------

Item 1.  Legal Proceedings............................................................ 26

Item 3.  Defaults upon Senior Securities.............................................. 29

Item 5.  Other Information............................................................ 30

Item 6.  Exhibits and Reports on Form 8-K ............................................ 31

SIGNATURES ........................................................................... 32
----------

Corecomm Holdco. Inc. and Subsidiaries Index to Financial Information.................S-1

</TABLE>


<PAGE>

                        CoreComm Limited and Subsidiaries

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                       Condensed Consolidated Balance Sheets
                                                                                        March 31,               December 31,
                                                                                          2002                       2001
                                                                                    ------------------------------------------
                                                                                      (Unaudited)                (See Note)
<S>                                                                                 <C>                       <C>
Assets
Current assets:
   Cash and cash equivalents                                                        $       472,000           $       109,000

   Other                                                                                     37,000                    45,000
                                                                                    ------------------------------------------
Total current assets                                                                        509,000                   154,000


Fixed assets, net                                                                           113,000                   146,000

Investment in CoreComm Holdco                                                             2,236,000                 3,863,000
Other, net of accumulated amortization of $2,503,000 (2002) and
   $2,251,000 (2001)                                                                      6,653,000                 8,260,000
                                                                                    ------------------------------------------
                                                                                    $     9,511,000           $    12,423,000
                                                                                    ==========================================
Liabilities and shareholders' deficiency
Current liabilities:
  Accounts payable                                                                  $       959,000           $       959,000
  Accrued expenses                                                                          348,000                   419,000
  Due to NTL Incorporated                                                                   209,000                   209,000
  Due to CoreComm Holdco                                                                 31,834,000                24,112,000
  Current portion of long-term debt                                                       4,750,000                        --
                                                                                    ------------------------------------------
Total current liabilities                                                                38,100,000                25,699,000

Long-term debt, including $258,087,000 (2002) and $256,874,000 (2001)
   due to CoreComm Holdco                                                               258,087,000               261,624,000

Commitments and contingent liabilities

Shareholders' deficiency:
  Series preferred stock - $.01 par value, authorized 5,000,000 shares:                          --                        --
     Series A, liquidation preference $56,750,000; issued and outstanding
        51,000 shares                                                                            --                        --
     Series B, liquidation preference $268,187,000; issued and outstanding
        250,000 shares                                                                        3,000                     3,000
     Series C, none issued or outstanding                                                        --                        --
  Common stock - $.01 par value, authorized 600,000,000 shares; issued and
    outstanding 141,655,000 shares                                                        1,417,000                 1,417,000
Additional paid-in capital                                                              782,922,000               787,434,000
Deficit                                                                              (1,060,444,000)           (1,053,180,000)
                                                                                    ------------------------------------------
                                                                                       (276,102,000)             (264,326,000)
Treasury stock at cost, 1,329,000 shares                                                (10,574,000)              (10,574,000)
                                                                                    ------------------------------------------
                                                                                       (286,676,000)             (274,900,000)
                                                                                    ------------------------------------------
                                                                                    $     9,511,000           $    12,423,000
                                                                                    ==========================================

Note:  The balance sheet at December 31, 2001 has been derived from the audited balance sheet at that date.

See accompanying notes.

                                                               2

</TABLE>

<PAGE>
                        CoreComm Limited and Subsidiaries

<TABLE>
<CAPTION>
                       Condensed Consolidated Statements of Operations
                                         (Unaudited)


                                                           Three Months Ended March 31,
                                                           2002                    2001
                                                     --------------------------------------

<S>                                                  <C>                     <C>
Revenues                                             $     108,000           $  72,937,000

Costs and expenses
Operating                                                       --              63,520,000
Selling, general and administrative                         68,000              31,599,000
Corporate                                                       --               3,894,000
Non-cash compensation                                           --               3,234,000
Other charges                                                   --                 119,000
Asset impairments                                               --             167,599,000
Depreciation                                                33,000              12,045,000
Amortization                                                    --              31,511,000
                                                     --------------------------------------
                                                           101,000             313,521,000
                                                     --------------------------------------
Operating income (loss)                                      7,000            (240,584,000)

Other income (expense)
Interest income and other, net                               7,000                 776,000
Equity in net loss of CoreComm Holdco                   (1,627,000)                     --
Interest expense                                        (5,651,000)             (9,838,000)
                                                     --------------------------------------
Loss before income tax provision                        (7,264,000)           (249,646,000)
Income tax provision                                            --                 (15,000)
                                                     --------------------------------------
Net loss                                             $  (7,264,000)          $(249,661,000)
                                                     ======================================

Basic and diluted net loss per common share          $       (0.09)          $       (3.58)
                                                     ======================================

See accompanying notes.

                                             3
</TABLE>

<PAGE>
                        CoreComm Limited and Subsidiaries

<TABLE>
<CAPTION>
                             Condensed Consolidated Statement of Shareholders' Deficiency
                                                      (Unaudited)


                                    Series A Preferred               Series B
                                           Stock                 Preferred Stock                Common Stock
                                   ---------------------     ----------------------    ------------------------------
                                     Shares        Par           Shares      Par            Shares           Par
                                   ---------------------     ----------------------    ------------------------------

<S>                                  <C>        <C>           <C>        <C>             <C>            <C>
Balance, December 31, 2001             51,000     $   --        250,000    $  3,000        141,655,000    $ 1,417,000
Accreted dividends on
   preferred stock
Net loss
----------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2001                51,000     $   --        250,000    $  3,000        141,655,000    $ 1,417,000
======================================================================================================================
</TABLE>



<TABLE>
<CAPTION>

                                      Additional                                Treasury Stock
                                       Paid-In                           -----------------------------
                                       Capital            Deficit           Shares           Amount
                                    -------------     ---------------    -----------     -------------
<S>                                 <C>               <C>                 <C>            <C>
Balance, December 31, 2001          $ 787,434,000     $(1,053,180,000)    (1,329,000)    $ (10,574,000)
Accreted dividends on
   preferred stock                     (4,512,000)
Net loss                                                   (7,264,000)
-------------------------------------------------------------------------------------------------------
Balance, March 31, 2001             $ 782,922,000     $(1,060,444,000)    (1,329,000)    $ (10,574,000)
=======================================================================================================


See accompanying notes.

                                                          4

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                  CoreComm Limited and Subsidiaries


                           Condensed Consolidated Statements of Cash Flows
                                             (Unaudited)

                                                                    Three Months Ended March 31,
                                                                     2002                 2001
                                                                -----------------------------------

<S>                                                             <C>                   <C>
Net cash provided by (used in) operating activities             $    363,000          $(19,208,000)

Investing activities
Purchase of fixed assets                                                  --              (530,000)
Proceeds from sales of marketable securities                              --             4,775,000
                                                                -----------------------------------
Net cash provided by investing activities                                 --             4,245,000

Financing activities
Proceeds from borrowing, net of financing costs                           --             9,736,000
Proceeds from exercise of stock options and warrants                      --                 4,000
Principal payments                                                        --            (4,299,000)
Principal payments of capital lease obligations                           --            (4,560,000)
                                                                -----------------------------------
Net cash provided by financing activities                                 --               881,000
                                                                -----------------------------------
Increase (decrease) in cash and cash equivalents                     363,000           (14,082,000)
Cash and cash equivalents at beginning of period                     109,000            25,802,000
                                                                -----------------------------------
Cash and cash equivalents at end of period                      $    472,000          $ 11,720,000
                                                                ===================================

Supplemental disclosure of cash flow information
 Cash paid for interest                                         $         --          $  1,110,000
                                                                ===================================

Supplemental schedule of non-cash investing activities
 Liabilities incurred to acquire fixed assets                   $         --          $  3,703,000
                                                                ===================================

See accompanying notes.

                                                  5
</TABLE>

                        CoreComm Limited and Subsidiaries

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Note 1.  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  pursuant  to the  rules  and  regulations  of  the  SEC.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results for the three months ended March 31, 2002 are not necessarily
indicative of the results that may be expected for the year ending  December 31,
2002. For further  information,  refer to the consolidated  financial statements
and footnotes  thereto  included in the Company's annual report on Form 10-K for
the year ended December 31, 2001.

The Company's only material asset is its ownership of  approximately  13% of the
outstanding  capital  stock of CoreComm  Holdco,  Inc.,  referred to as CoreComm
Holdco.  The Company  owned 100% of the  outstanding  capital  stock of CoreComm
Holdco  until  the   consummation   of   transactions  as  part  of  the  Holdco
recapitalization in December 2001. CoreComm Holdco provides integrated local and
toll-related  telephone,  Internet and high-speed  data services to business and
residential  customers  located  principally in Pennsylvania,  Ohio, New Jersey,
Michigan,   Wisconsin,   Maryland,   Illinois,  New  York,  Virginia,  Delaware,
Massachusetts, Washington, D.C. and Indiana.

Effective with the completion of the first phase of the Holdco  recapitalization
on December  28,  2001,  the  Company  began  accounting  for its  ownership  of
approximately 13% of the outstanding  shares of CoreComm Holdco using the equity
method.  The  Company  consolidated  CoreComm  Holdco  prior to that date.  This
transition from  consolidation to equity method accounting is referred to as the
deconsolidation  in the consolidated  financial  statements.  As a result of the
deconsolidation,  the assets and liabilities of CoreComm Holdco are not included
in the Company's  consolidated  balance sheet at December 31, 2001. In addition,
the results of operations and cash flows of CoreComm Holdco,  which  represented
substantially  all of the Company's  operations and cash flows, are not included
in the  Company's  consolidated  statement of  operations  and statement of cash
flows beginning January 1, 2002.

The Company  has a liquidity  problem  that raises  substantial  doubt about its
ability to  continue  as a going  concern.  The  Company  intends to resolve its
liquidity problem through the completion of the Holdco recapitalization exchange
offers, although the exchange offers may not be completed.

Note 2.  Holdco Recapitalization

In April 2001,  the Company  completed a  reevaluation  of its business  plan in
light of current market  conditions and made  significant  modifications  to its
plans.  The Company  streamlined its strategy and operations to focus on its two
most  successful  and  promising  lines of  business.  The  first is  integrated
communications products and other high bandwidth/data/web-oriented  services for
the business market. The second is bundled local telephony and Internet products
efficiently sold,  serviced and provisioned via  Internet-centric  interfaces to
the residential market.


                                       6

<PAGE>
                        CoreComm Limited and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 2.   Holdco Recapitalization (continued)

Also in April 2001,  the Company  commenced  a process to  potentially  sell its
assets and businesses  that are not directly  related to its  competitive  local
exchange carrier,  referred to as CLEC, business,  and retained advisors for the
purpose of  conducting  this sale. At the time,  the  Company's  CLEC assets and
businesses were CoreComm Holdco's local and toll-related telephone services that
compete with the incumbent local exchange carrier, referred to as ILEC.

In  October  2001,  the  Company  and  CoreComm  Holdco   commenced  the  Holdco
recapitalization.  The Company entered into agreements with numerous  holders of
its 6% Convertible Subordinated Notes Due 2006 whereby the holders agreed, among
other  things,  to  exchange  their  notes for the amount of the October 1, 2001
interest payment of $4.8 million in the aggregate in cash and shares of CoreComm
Holdco common stock. The exchange was completed in December 2001,  including the
payment of the $4.8 million by the Company.

On December 28, 2001,  CoreComm  Holdco  completed the first phase of the Holdco
recapitalization,  which was the  exchange  of shares  of its  common  stock for
substantial  amounts  of  the  outstanding   indebtedness  of  CoreComm  Holdco,
substantial amounts of the outstanding  indebtedness of the Company and CoreComm
Holdco as co-obligors and all of the outstanding preferred stock of the Company.

The following summarizes the indebtedness and preferred stock that was exchanged
for shares of CoreComm Holdco's common stock in December 2001:


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Principal Amount or
                 Description                    Date Issued               Issuer              Stated Value when Issued
--------------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>                      <C>                     <C>
10.75% Unsecured Convertible PIK Notes                                 CoreComm Holdco and
   due 2011                                    April 2001              the Company              $10.0 million
--------------------------------------------------------------------------------------------------------------------------------
10.75% Senior Unsecured Convertible PIK                                CoreComm Holdco and
   Notes Due 2010                              December 2000           the Company              $16.1 million
--------------------------------------------------------------------------------------------------------------------------------
Senior Unsecured Notes Due
   September 29, 2003                          September 2000          The Company              $108.7 million
--------------------------------------------------------------------------------------------------------------------------------
6% Convertible Subordinated Notes
   Due 2006                                    October 1999            The Company              $175.0 million (1)
--------------------------------------------------------------------------------------------------------------------------------
Series A and Series A-1 Preferred Stock        September 2000          The Company              $51.1 million
--------------------------------------------------------------------------------------------------------------------------------
Series B Preferred Stock                       September 2000          The Company              $250.0 million
--------------------------------------------------------------------------------------------------------------------------------

<FN>
(1)      $164.75 million was outstanding as of December 2001, of which $160 million was exchanged.
</FN>
</TABLE>


                                       7

<PAGE>
                        CoreComm Limited and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 2.   Holdco Recapitalization (continued)

As a result of the completed  exchanges in December 2001,  approximately  87% of
CoreComm Holdco's  outstanding  shares, or 26,056,806  shares,  are owned by the
former holders of indebtedness of the Company and CoreComm Holdco and the former
holders of preferred  stock of the Company,  and  approximately  13% of CoreComm
Holdco's  outstanding  shares, or 3,943,248  shares,  continue to be held by the
Company.

As part of the second phase of the Holdco recapitalization, on February 8, 2002,
CoreComm  Holdco  launched  registered  public  exchange  offers  whereby  it is
offering to exchange shares of CoreComm Holdco common stock which will have been
registered under the Securities Act of 1933, as amended,  pursuant to a Form S-4
registration  statement  to all holders of the  Company's  common  stock and all
remaining  holders of the Company's 6% Convertible  Subordinated  Notes due 2006
for their shares of the Company's common stock and their notes, respectively. As
soon as practicable after accepting at least 90% of the oustanding shares of the
Company's common stock in the exchange offers, CoreComm Holdco plans to transfer
all such shares to a newly  formed,  wholly-owned  subsidiary  and to merge this
subsidiary  into  the  Company  with  the  Company  surviving  the  merger  as a
wholly-owned subsidiary of CoreComm Holdco.

As a result of the first phase of the Holdco  recapitalization,  CoreComm Holdco
holds $160 million principal amount of the Company's 6% Convertible Subordinated
Notes,  approximately  $105.7 million  principal  amount of the Company's Senior
Unsecured  Notes  and all of the  Company's  outstanding  preferred  stock.  The
Company  has agreed  that it will  surrender  to  CoreComm  Holdco the number of
shares of  CoreComm  Holdco  common  stock that  CoreComm  Holdco  issues in the
exchange  offers and the merger.  (Therefore,  if the merger is  completed,  the
Company  will own no  common  stock of  CoreComm  Holdco,  and thus  will own no
material  assets,  since  CoreComm  Holdco  common stock is the  Company's  only
material  asset.)  In  exchange  for the  Company  surrendering  such  shares of
CoreComm  Holdco  common stock,  the Company and CoreComm  Holdco have agreed to
waivers and  amendments  to delay the Company  from having to make any  payments
with respect to these  securities.  If such a merger does not occur, the Company
does not  anticipate  that it will  have  the  financial  resources  to meet the
obligations  under its notes and preferred  stock if CoreComm Holdco requires it
to do so.

Under the exchange offers, those shareholders and noteholders who exchange their
shares and notes,  respectively,  will receive  shares of CoreComm  Holdco,  and
would no longer have securities of the Company.

The Company may lack the  resources  to meet the  obligations  of the  remaining
$4.75 million principal amount of 6% Convertible Subordinated Notes that are not
held by CoreComm  Holdco.  The Company  also  remains a party  liable  under the
$156.1  million senior  secured  credit  facility,  has no right to withdraw any
additional  money under that  facility,  and does not expect to be able to raise
additional financing in the foreseeable future.

                                       8

<PAGE>
                        CoreComm Limited and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 2.   Holdco Recapitalization (continued)

On December  17,  2001,  Nasdaq  granted the  Company an  exception  to Nasdaq's
stockholder  approval  requirements  permitting the Holdco  recapitalization  to
proceed  without  a vote  of the  Company's  stockholders  because  requiring  a
stockholder vote would seriously  jeopardize the Company's financial  viability.
Pursuant to conversations with Nasdaq, the Company and CoreComm Holdco intend to
transfer the Company's  current listing to CoreComm Holdco following  successful
completion of the exchange offers.  The Company cannot predict whether remaining
shares of the Company's common stock will continue to trade publicly thereafter.

On February 14, 2002,  the Company  received  written  notification  from Nasdaq
indicating  that it failed to comply with the minimum  market  value of publicly
held shares and  minimum bid price  requirements  for  continued  listing on the
Nasdaq National Market. The Company has until May 15, 2002 to regain compliance.
If the Holdco  recapitalization  is not  successfully  completed and the Company
does not regain compliance by this date, Nasdaq stated that it will then provide
the Company  with  written  notification  that its common stock will be delisted
from the Nasdaq National Market. The Company has not yet determined what actions
will be taken if it receives this written notification.  If the Company's common
stock is  delisted  from the  Nasdaq  National  Market,  shares may trade in the
over-the-counter  market and price  quotations may be reported by other sources.
The extent of the public market and the availability of quotations for shares of
the Company's common stock would, however,  depend upon the number of holders of
shares remaining at that time, the interest in maintaining a market in shares of
the common stock on the part of securities  firms,  the possible  termination of
registration of the shares under the Securities  Exchange Act of 1934, and other
factors.

Note 3.   Recent Accounting Pronouncements

In August 2001, the Financial Accounting  Standards Board,  referred to as FASB,
issued Statement of Financial Accounting Standards, referred to as SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived  Assets," effective for
the  Company on  January  1,  2002.  This  Statement  supercedes  SFAS No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" and other related accounting guidance.  The adoption of this new
standard  had no  significant  effect on the  results of  operations,  financial
condition or cash flows of the Company.

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations,"  effective  for the  Company on January  1, 2003.  This  Statement
addresses financial accounting and reporting for obligations associated with the
retirement of tangible fixed assets and the associated asset  retirement  costs.
The Company is in the process of evaluating  the financial  statement  impact of
the adoption of SFAS No. 143.

                                       9

<PAGE>
                        CoreComm Limited and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 3.   Recent Accounting Pronouncements (continued)

In June 2001,  the FASB issued SFAS No. 141,  "Business  Combinations,"  and No.
142,  "Goodwill  and Other  Intangible  Assets."  SFAS No. 141 requires that the
purchase  method of accounting be used for all business  combinations  initiated
after  June  30,  2001.  Use of the  pooling-of-interests  method  is no  longer
permitted.  SFAS No. 141 also includes  guidance on the initial  recognition and
measurement  of  goodwill  and other  intangible  assets  acquired in a business
combination  that is  completed  after  June 30,  2001.  SFAS  No.  142 ends the
amortization of goodwill and indefinite-lived  intangible assets. Instead, these
assets must be reviewed  annually (or more frequently under certain  conditions)
for impairment in accordance  with this  statement.  This impairment test uses a
fair value approach rather than the undiscounted  cash flow approach  previously
required by SFAS No. 121,  "Accounting  for the Impairment of Long-Lived  Assets
and for Long-Lived  Assets to Be Disposed Of." The Company  adopted SFAS No. 142
on January 1, 2002. The adoption of this new standard had no significant  effect
on the results of operations, financial condition or cash flows of the Company.

Note 4.   Asset Impairments

At March 31, 2001, the Company reduced the carrying  amount of goodwill  related
to two of its acquisitions by $167,599,000.  In connection with the reevaluation
of its business  plan and the decision to sell its non-CLEC  assets and business
announced  in April  2001,  the Company  was  required to report all  long-lived
assets and  identifiable  intangibles to be disposed of at the lower of carrying
amount or  estimated  fair  value  less  cost to sell.  The  carrying  amount of
goodwill  related to these  acquisitions  was  eliminated  before  reducing  the
carrying  amounts of other assets.  The estimated fair value of these businesses
was determined based on information provided by the investment bank retained for
the purpose of conducting this sale.

Note 5.   Investment in CoreComm Holdco

Effective with the completion of the first phase of the Holdco  recapitalization
on December  28,  2001,  the  Company  began  accounting  for its  ownership  of
approximately 13% of the outstanding  shares of CoreComm Holdco using the equity
method. The Company consolidated CoreComm Holdco prior to that date.

Following is the Company's investment in CoreComm Holdco:

Balance at December 31, 2001                               $3,863,000
Equity in net loss of CoreComm Holdco (unaudited)          (1,627,000)
                                                           -----------
Balance at March 31, 2002 (unaudited)                      $2,236,000
                                                           ===========

                                       10

<PAGE>
                        CoreComm Limited and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 5.   Investment in CoreComm Holdco (continued)

Following  is  the  condensed  financial  information  of  CoreComm  Holdco  and
subsidiaries as of March 31, 2002 and December 31, 2001 and for the three months
ended March 31, 2002 and 2001:


<TABLE>
<CAPTION>
                                  Condensed Consolidated Balance Sheets

                                                                      March 31,            December 31,
                                                                        2002                   2001
                                                                    (unaudited)
                                                                   --------------------------------------
          Assets
<S>                                                                <C>                     <C>
          Current assets                                           $  64,587,000           $  61,556,000
          Fixed assets, net                                           80,339,000              86,722,000
          Intangible assets, net                                     182,462,000             183,749,000
          Other assets, net                                           14,746,000              15,256,000
                                                                   --------------------------------------
                                                                   $ 342,134,000           $ 347,283,000
                                                                   ======================================
          Liabilities and shareholders' equity
          Current liabilities                                      $ 152,312,000           $ 145,350,000
          Long-term debt and capital lease obligations               172,943,000             172,541,000
          Shareholders' equity                                        16,879,000              29,392,000
                                                                   --------------------------------------
                                                                   $ 342,134,000           $ 347,283,000
                                                                   ======================================

                             Condensed Consolidated Statements of Operations
                                               (unaudited)

                                                                        Three Months Ended March 31,
                                                                         2002                    2001
                                                                   --------------------------------------

          Revenues                                                 $  74,311,000           $  72,811,000

          Costs and expenses
          Operating                                                   48,038,000              63,520,000
          Selling, general and administrative                         22,313,000              30,795,000
          Corporate                                                    1,698,000               2,098,000
          Non-cash compensation                                               --               3,234,000
          Recapitalization costs                                       1,182,000                      --
          Other charges                                                       --                 119,000
          Asset impairments                                                   --             167,599,000
          Depreciation                                                 8,881,000              12,012,000
          Amortization                                                 1,287,000              31,509,000
                                                                   --------------------------------------
                                                                      83,399,000             310,886,000
                                                                   --------------------------------------
          Operating loss                                              (9,088,000)           (238,075,000)

          Other income (expense)
          Interest income and other, net                                 134,000                 664,000
          Interest expense                                            (3,559,000)             (4,141,000)
                                                                   --------------------------------------
          Net loss                                                 $ (12,513,000)          $(241,552,000)
                                                                   ======================================

                                                   11

</TABLE>

<PAGE>
                        CoreComm Limited and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 6.   Fixed Assets

Fixed assets consist of:
                                             March 31,      December 31,
                                               2002            2001
                                            --------------------------
                                            (Unaudited)

        Computer hardware and software      $ 386,000       $ 386,000
        Other equipment                        10,000          10,000
                                            --------------------------
                                              396,000         396,000
        Accumulated depreciation             (283,000)       (250,000)
                                            --------------------------
                                            $ 113,000       $ 146,000
                                            ==========================

Note 7.   Accrued Expenses

Accrued expenses consist of:
                                             March 31,      December 31,
                                               2002            2001
                                            --------------------------
                                            (Unaudited)

        Taxes, including income taxes       $ 205,000       $ 205,000
        Interest                              143,000         214,000
                                            --------------------------
                                            $ 348,000       $ 419,000
                                            ==========================


Note 8.   Long-Term Debt

<TABLE>
<CAPTION>
Long-term debt consists of:
                                                                  March 31,        December 31,
                                                                    2002               2001
                                                                 -------------------------------
                                                                 (Unaudited)

<S>                                                              <C>               <C>
      6% Convertible Subordinated Notes                          $164,750,000      $164,750,000
      Senior Unsecured Notes Due 2003, less unamortized
        discount of $7,592,000 (2002) and $8,805,000 (2001)        98,087,000        96,874,000
                                                                 -------------------------------
                                                                  262,837,000       261,624,000
      Less current portion                                          4,750,000                --
                                                                 -------------------------------
                                                                 $258,087,000      $261,624,000
                                                                 ===============================
</TABLE>

At March 31, 2002, all of the Senior  Unsecured Notes Due 2003 and  $160,000,000
aggregate principal amount of the 6% Convertible Subordinated Notes were held by
CoreComm Holdco.

The  interest  payment  that  was  due  under  the  outstanding  6%  Convertible
Subordinated  Notes on April 1,  2002 has not been  made and the  Company  is in
default  under these notes.  The  consideration  we are offering in our exchange
offer for the 6% Convertible  Subordinated  Notes includes $30.00 in cash, which
represents  the April 1, 2002  interest  payment,  for each $1,000 in  principal
amount  outstanding.

                                       12

<PAGE>
                        CoreComm Limited and Subsidiaries


        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 9.   Related Party Transactions

The  balance due to CoreComm  Holdco at March 31, 2002  includes 6%  Convertible
Subordinated  Notes and  Senior  Unsecured  Notes Due 2003  interest  payable of
$8,238,000 and preferred  stock dividends  payable of $23,850,000,  net of other
amounts due from CoreComm Holdco of $254,000.

Some of the officers and directors of the Company are also officers or directors
of NTL  Incorporated,  referred to as NTL.  NTL  provided  CoreComm  Holdco with
management,  financial, legal and technical services, access to office space and
equipment  and use of  supplies.  Amounts  charged  to  CoreComm  Holdco  by NTL
consisted  of salaries  and direct  costs  allocated  to CoreComm  Holdco  where
identifiable, and a percentage of the portion of NTL's corporate overhead, which
cannot be specifically  allocated to NTL. It is not practicable to determine the
amounts of these expenses that would have been incurred had the Company operated
as an unaffiliated entity. In the opinion of management,  this allocation method
is reasonable.  For the three months ended March 31, 2001, NTL charged  CoreComm
Holdco $104,000,  which is included in corporate  expenses.  NTL did not provide
any services to the Company during the three months ended March 31, 2002.

Until August, 2001, CoreComm Holdco provided NTL with access to office space and
equipment  and the use of  supplies.  It is not  practicable  to  determine  the
amounts of these  expenses  that would have been  incurred had  CoreComm  Holdco
operated  as  an  unaffiliated  entity.  In  the  opinion  of  management,  this
allocation  method is  reasonable.  For the three  months  ended March 31, 2001,
CoreComm Holdco charged NTL $67,000, which reduced corporate expenses.

CoreComm  Holdco  provides   billing  and  software   development   services  to
subsidiaries  of NTL.  General  and  administrative  expenses  were  reduced  by
$467,000  for the  three  months  ended  March  31,  2001,  as a result of these
charges.

Note 10.  Other Charges

Other  charges of  $119,000  for the three  months  ended March 31, 2001 are for
adjustments  relating  to the  Company's  announcement  in  December  2000  of a
reorganization  of certain of its operations.  These charges include  additional
employee  severance and related  costs of $351,000,  offset by a reversal of the
lease exit provision of $232,000.

Note 11.  Non-Cash Compensation

In April 2000, the  Compensation  and Option Committee of the Board of Directors
approved the issuance of options to purchase  approximately  2,747,000 shares of
the Company's common stock to various  employees at an exercise price of $14.55,
which was less than the fair market value of the  Company's  common stock on the
date of the grant. In accordance with APB Opinion No. 25,  "Accounting for Stock
Issued  to  Employees,"   in  April  2000,  the  Company   recorded  a  non-cash
compensation  expense of  approximately  $29.0  million and a non-cash  deferred
expense of approximately $31.3 million.  From January 1, 2001 to March 31, 2001,
$3.2 million of the deferred non-cash compensation was charged to expense.

                                       13

<PAGE>
                        CoreComm Limited and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 12.  Net Loss Per Common Share

The following table sets forth the computation of basic and diluted net loss per
common share:

<TABLE>
<CAPTION>
                                                                      Three Months Ended March 31,
                                                                  ----------------------------------
                                                                        2002               2001
                                                                  ----------------------------------
      Numerator:
<S>                                                               <C>                 <C>
      Net loss                                                    $  (7,264,000)      $(249,661,000)
      Preferred stock dividend                                       (4,512,000)         (4,417,000)
      Preferred stock accretion to
         Redemption value                                            (1,192,000)         (1,117,000)
                                                                  ----------------------------------
      Loss available to common
         Shareholders                                               (12,968,000)       (255,195,000)
                                                                  ----------------------------------

      Denominator  for basic and diluted net loss per common
         share                                                      140,327,000          71,232,000
                                                                  ----------------------------------

      Basic and diluted net loss per common share                 $       (0.09)      $       (3.58)
                                                                  ==================================
</TABLE>

The shares issuable upon the exercise of stock options and warrants and upon the
conversion of convertible  securities  are excluded from the  calculation of net
loss per common share as their effect would be antidilutive.  At March 31, 2002,
the Company had 93.4 million shares  issuable upon the exercise of stock options
and warrants and the conversion of convertible securities.

Note 13. Commitments and Contingent Liabilities

Fiberstream,  Inc. ("FiberCo"), a wholly-owned subsidiary of the Company, has an
obligation  under  an  agreement  with  the  City of New  York to pay an  annual
franchise  fee in the  amount  of the  greater  of (a) 5% of gross  revenue  (as
defined in the agreement) or (b) $200,000.  Estimated  quarterly  payments begin
the earlier of (a) the date that FiberCo  completes  construction of its initial
backbone  or (b)  November  2002.  Additionally,  FiberCo has an  obligation  to
provide equipment,  cash or services to the City of New York with a value of not
more than $100,000 over 15 years.

Legal Proceedings

The Company is involved in various  disputes,  arising in the ordinary course of
its  business,  which may result in pending or  threatened  litigation.  None of
these  matters are expected to have a material  adverse  effect on the Company's
financial  position,  results of operations or cash flows.  However,  certain of
these  matters,  if resolved  unfavorably  to us, could have a material  adverse
effect  on  the  Company's  business,  financial  condition  and/or  results  of
operations.

                                       14

<PAGE>
                        CoreComm Limited and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 13. Commitments and Contingent Liabilities (continued)


o     CoreComm  Newco,  Inc., an indirect,  wholly-owned  subsidiary of CoreComm
      Holdco,  is currently in litigation  with Ameritech  Ohio, a supplier from
      whom it  purchases  telecommunications  products  and  services,  over the
      adequacy of Ameritech's performance under a 1998 contract between CoreComm
      Newco and Ameritech,  and related issues.  This  litigation  began in June
      2001 when Ameritech threatened to stop processing new orders following the
      Company's  exercise of its right under the  contract to withhold  payments
      for  Ameritech's  performance  failures.  In response to this threat,  the
      Company  sought  and  received  an order  from an  official  of the Public
      Utilities  Commission of Ohio barring  Ameritech  from refusing to process
      new CoreComm orders. Ameritech has appealed that order to the PUCO and the
      appeal is still pending.

      On July 5, 2001,  Ameritech  filed a claim with the PUCO  seeking  payment
      from the  Company of  approximately  $8,600,000  allegedly  owed under the
      contract.  On August  8,  2001,  Ameritech  filed a second  claim  against
      CoreComm Limited in Ohio state court, seeking an additional  approximately
      $4,300,000 in allegedly  improperly  withheld amounts. On August 28, 2001,
      the  Company  exercised  its right to remove the state  court claim to the
      United States  District  Court for the Northern  District of Ohio, and the
      parties then stipulated to a consolidation  of both of Ameritech's  claims
      in the United States District  Court.  To consolidate  the two claims,  on
      October 9, 2001, Ameritech filed an amended complaint in the United States
      District Court, seeking a total of approximately $14,400,000.

      On December  26,  2001,  CoreComm  Newco  filed its answer to  Ameritech's
      amended complaint and  simultaneously  filed three  counterclaims  against
      Ameritech  and  some  of its  affiliates,  alleging  breach  of  contract,
      antitrust violations,  and fraudulent or negligent  misrepresentation.  In
      lieu of  filing an answer to  CoreComm  Newco's  counterclaims,  Ameritech
      filed a series of motions on March 25,  2002,  asking the Court to dismiss
      several of CoreComm  Newco's  counterclaims.  On April 17, 2002,  CoreComm
      Newco filed its opposition to Ameritech's requests for dismissal and these
      items are now pending before the court for disposition.

      The Company  believes  that  CoreComm  Newco has  meritorious  defenses to
      Ameritech's amended complaint, and that the amount currently in dispute is
      substantially  less than the  $14,400,000  claimed in Ameritech's  amended
      complaint. For example, the figure specified in Ameritech's complaint does
      not  account  for (a) more than $5.2  million  in refunds  that  Ameritech
      contends it has already  credited to CoreComm  Newco's  accounts since the
      filing its complaint, and (b) payments that were made by CoreComm Newco in
      the ordinary course after the time of Ameritech's submission. However, the
      Company  cannot be certain  how or when the matter will be  resolved.  The
      Company also believes that, to the extent Ameritech  prevails with respect
      to any of its claims,  Ameritech's award may be offset in whole or in part
      by amounts that CoreComm Newco is seeking to obtain from  Ameritech  under
      its counterclaims.  However,  it is impossible at this time to predict the
      outcome of the litigation.

                                       15

<PAGE>
                        CoreComm Limited and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 13. Commitments and Contingent Liabilities (continued)


o     On March 7, 2002, CoreComm Massachusetts, Inc. (an operating subsidiary of
      CoreComm  Holdco) filed a complaint and request for temporary  restraining
      order against Verizon New England d/b/a Verizon  Massachusetts  seeking to
      prevent Verizon from proceeding with its threat to implement an embargo on
      the ability of CoreComm  Massachusetts  to place  orders for new  services
      pending  the  resolution  of  a  dispute  between  the  parties  over  the
      legitimacy of various  charges  billed by Verizon in that state.  On March
      13,  2002,  the court  denied  CoreComm's  request  for a TRO and  Verizon
      proceeded to implement the threatened  service  embargo.  On April 1, 2002
      Verizon filed an answer to CoreComm's  complaint along with  counterclaims
      seeking  approximately  $1.4  million in payment  for  allegedly  past due
      charges.  On April 10,  2002,  CoreComm  Massachusetts  filed an answer to
      these  counterclaims  denying the accuracy of Verizon's  contentions.  The
      Company  does not believe  that the embargo  will have a material  adverse
      affect on its business,  financial condition and/or operating results, and
      CoreComm  Massachusetts intends to defend itself vigorously and pursue all
      available claims and defenses.  However,  it is impossible at this time to
      predict the outcome of this litigation.

o     On December 3, 2001, General Electric Capital Corp. filed a lawsuit in the
      Circuit Court of Cook County,  Illinois  against the Company and MegsINet,
      Inc., an indirect subsidiary of CoreComm Holdco,  seeking approximately $8
      million in allegedly past due amounts and the return of equipment  under a
      capital  equipment  lease agreement  between Ascend and MegsINet.  GECC is
      seeking all amounts allegedly owed under the lease as well as repossession
      of the equipment.  On February 19, 2002, the defendants  filed a motion to
      dismiss several of GECC's claims. In response,  GECC withdrew its original
      complaint and on May 1, 2002 filed an amended  complaint  naming  CoreComm
      Holdco as an  additional  defendant.  Defendants'  response to dismiss the
      amended complaint is presently due on June 5, 2002. Concurrently, on April
      12,  2002,  GECC filed a second  complaint  in the  Circuit  Court of Cook
      County, Illinois against MegsINet, the Company and CoreComm Holdco seeking
      a court order allowing it to take  repossession of its alleged  equipment.
      After a hearing  on the  matter  following  defendants'  opposition,  GECC
      withdrew its complaint and filed a new action on May 3, 2002, in an effort
      to supply the court with  additional  information  regarding  its  alleged
      rights  to the  equipment.  Defendant's  response  to  dismiss  the  May 3
      complaint is currently due on or before May 23, 2002. Defendants intend to
      defend  themselves  vigorously  against both  complaints and to pursue all
      available claims and defenses.  However,  it is impossible at this time to
      predict the outcome of the litigation.

                                       16

<PAGE>
                        CoreComm Limited and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 13. Commitments and Contingent Liabilities (continued)


o     On May 25, 2001, KMC Telecom, Inc. and some of its operating  subsidiaries
      filed an  action  in the  Supreme  Court  of New York for New York  County
      against  the  Company,  Cellular  Communications  of  Puerto  Rico,  Inc.,
      CoreComm New York,  Inc. and MegsINet,  Inc. On that same date,  KMC filed
      the same cause of action in the  Circuit  Court of Cook  County,  IL. Upon
      defendant's Motion to Stay the New York action, KMC voluntarily  dismissed
      the  Illinois  litigation  and the matter is currently  proceeding  in New
      York. KMC contends that it is owed approximately $2 million,  primarily in
      respect  of  alleged  early  termination  liabilities,  under  a  services
      agreement and a co-location  agreement with MegsINet.  The defendants have
      denied KMC's  claims and have  asserted  that the  contracts at issue were
      signed without proper authorization,  that KMC failed to perform under the
      alleged contracts, and that the termination penalties are not enforceable.
      The defendants  have served  discovery and intend to defend  themselves in
      coordination  with one of their  insurance  carriers.  On March 27,  2002,
      certain of the  defendants  initiated  litigation  against  several former
      principals of MegsINet seeking  indemnification  and contribution  against
      KMC's claims.

o     On March 1, 2002,  Easton Telecom  Services,  LLC.,  referred to as Easton
      LLC,  initiated  litigation  in the  Northern  District  of  Ohio  against
      CoreComm Internet Group, Inc. asserting that Easton LLC is the assignee of
      several rights of Easton Telecom  Services,  Inc.,  referred to as Easton,
      Inc., under an asset purchase agreement approved as part of the bankruptcy
      disposition of Teligent, Inc., and demanding payment of approximately $4.9
      million, primarily in respect of alleged early termination penalities, for
      telecommunications  services  purportedly provided under alleged contracts
      between Easton and MegsINet, Inc. Subsequently,  on April 18, 2002, Easton
      filed an amended complaint in the  above-referenced  matter naming Voyager
      Information  Networks,  Inc. as an additional defendant and increasing the
      amount  in  dispute  to  approximately  $5.1  million.  On  May  7,  2002,
      defendants'  filed their  answer  denying  Easton  LLC's  allegations  and
      asserting multiple defenses,  including defenses  challenging the validity
      of the alleged  contracts and  plaintiff's  claims as to alleged  damages.
      Defendants intend to defend themselves vigorously and pursue all available
      claims and defenses. However, it is impossible at this time to predict the
      outcome of this litigation.

                                       17

<PAGE>
                        CoreComm Limited and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 13. Commitments and Contingent Liabilities (continued)


o     Fiberstream,  Inc.,  a  direct  subsidiary  of the  Company,  has  been in
      communications  with Metromedia Fiber Networks,  Inc., referred to as MFN,
      regarding a dispute  between the parties under a General  Agreement  dated
      September  29,  2000 and a related  Product  Order of the same  date.  The
      dispute  centers around the accuracy of certain  statements that were made
      by MFN  concerning  the nature of its network at the time of  contracting,
      the  timeliness  of the  installation  of the  circuits  by MFN  under the
      agreement,  and  Fiberstream's  obligation,  if any,  to make  payments in
      respect of those  circuits.  MFN has indicated that unless payment is made
      for the circuits, it may initiate arbitration under the agreement and seek
      early  termination  penalties  in excess of  approximately  $1.1  million.
      Fiberstream has rejected MFN's demands and has advised that it will defend
      itself vigorously and pursue all available counterclaims, including claims
      for  fraudulent  inducement  relating to the execution of the contract and
      damages  arising from MFN's alleged failure to perform under the contract.
      The parties  have  discussed  the  prospect of settling  their  respective
      claims without resort to litigation  and those  discussions  are presently
      ongoing.

o     On October 9, 2001,  Enavis Networks,  Inc. filed an action in the Circuit
      Court of Pinellas  County,  Florida  against the  Company  asserting  that
      Enavis is owed  approximately  $420,000  relating to the alleged  sale and
      installation of telecommunications  equipment by Enavis. The Company filed
      a motion to dismiss this action for lack of personal jurisdiction over the
      Company in Florida and this motion is still  pending.  Upon  resolution of
      the motion to dismiss in Florida and assuming that the matter  proceeds in
      litigation,  the  Company  intends to defend this  action  vigorously  and
      assert  counterclaims  against  Enavis  arising  from  Enavis'  failure to
      provide equipment complying with CoreComm's specifications.

o     On or about  September  14, 2001,  a lawsuit was filed by  WXIII/Far  Yale
      Gen-Par,  LLC, as General  Partner of WXIII/Far  Yale Real Estate  Limited
      Partnership, referred to as Yale, against CoreComm Communications, Inc., a
      direct,  wholly-owned  subsidiary  of  CoreComm  Holdco,  and the  Company
      seeking approximately  $172,500 in unpaid rent, interest and other charges
      allegedly  owed under a  commercial  real estate  lease  between  Yale and
      CoreComm  Communications  as to which the Company is the guarantor.  On or
      about  February  5, 2002,  Yale filed a motion  with the court  requesting
      permission  to  amend  the  complaint  to  specify  a  revised  figure  of
      $404,290.87  as the  amount  allegedly  due  under the lease and to add an
      additional  count  asking  the  court  to issue a  preliminary  injunction
      preventing  the  defendants   from   transferring,   selling,   assigning,
      encumbering or otherwise hypothecating any of their assets,  including any
      debt or  equity  interests  in their  subsidiaries,  except  for usual and
      ordinary  expenses paid in the usual and ordinary  course of business.  On
      February 27, 2002,  Yale's motion for a preliminary  injunction was denied
      subject  to the  substitution  of  CoreComm  Holdco  for  the  Company  as
      guarantor on the lease and Yale's motion to specify the revised  figure of
      $404,290.87 was granted.  The defendants are currently  proceeding to make
      the  substitution  relating to the guarantee and are litigating the matter
      vigorously.

                                       18

<PAGE>
                        CoreComm Limited and Subsidiaries

Item 2.       Management's Discussion and Analysis of Results of Operations
              and Financial Condition.

Liquidity and Capital Resources

As a result of the first phase of the Holdco recapitalization,  we, who formerly
owned  100% of  CoreComm  Holdco's  outstanding  capital  stock,  now  own  only
approximately  13% of CoreComm  Holdco's  outstanding  capital  stock.  CoreComm
Holdco owns  substantially  all of the  business  operations,  which we formerly
owned  indirectly  through CoreComm  Holdco.  However,  we remain a party liable
under the $156.1 million  senior  secured  credit  facility and have no right to
withdraw  any  additional  money  under  that  facility.  Additionally,  we  are
co-obligors with CoreComm Holdco for its 10.75% Unsecured  Convertible PIK Notes
due April 2011 of $16,599,000,  including accrued PIK interest.  In addition, as
of March 31, 2002, we had obligations of approximately  $591 million of debt and
preferred  securities now held by CoreComm Holdco,  the $4.75 million  principal
amount  of  public  notes  that  are not  held by  CoreComm  Holdco,  and  other
liabilities.  In addition,  the senior  secured  credit  facility does not allow
CoreComm Holdco to pay any dividends or distribute  assets to us. As a result of
these  financial  conditions,  we  currently  lack  the  resources  to meet  our
obligations as they become due.

Our  auditors  included a going  concern  explanatory  paragraph  in their audit
report for the year ended  December  31, 2001,  which states that our  liquidity
conditions  raise  substantial  doubt  about our  ability to continue as a going
concern.

We do not  contemplate  raising  any  additional  financing  in the  foreseeable
future.

As a result of the first phase of the Holdco  recapitalization,  CoreComm Holdco
holds $160 million  principal amount of our public notes,  approximately  $105.7
million  principal  amount  of  our  Senior  Unsecured  Notes  and  all  of  our
outstanding  preferred stock. We do not have the financial resources to meet the
obligations under these notes and preferred stock if CoreComm Holdco requires us
to do so. We have agreed that we will  surrender  to Holdco the number of shares
of Holdco common stock that Holdco issues in the exchange offers and the merger.
Therefore,  if the merger is  completed,  we will own no common stock of Holdco,
and thus will own no material  assets,  since  Holdco  common  stock is our only
material asset. In exchange for surrendering such shares of Holdco common stock,
both CoreComm  Holdco and us have agreed to waivers and  amendments to delay our
having to make any payments with respect to these securities.

Under the exchange offers, those stockholders and noteholders who exchange their
shares and notes,  respectively,  will receive  shares of CoreComm  Holdco,  and
would no longer hold our securities.

We may lack the resources to meet the obligations of the remaining $4.75 million
in principal amount of public notes that are not held by CoreComm Holdco. We did
not pay any  interest  that was due on the public notes on October 1, 2001 until
December  2001 at which time we paid such  interest to the parties  that entered
into public note  agreements  in  connection  with the first phase of the Holdco
recapitalization.  On March 28,  2002,  the  October 1, 2001  interest  payment,
together  with  interest  accrued  thereon,  was paid on the  $4.75  million  in
principal  amount of public  notes  that did not  receive  the  October  1, 2001
interest  payment in December  2001.  The April 1, 2002 interest  payment on the
public notes has not yet been paid and we are in default under those notes.  The
consideration  we are  offering  in our  exchange  offer for the 6%  Convertible
Subordinated  Notes includes $30.00 in cash,  which represents the April 1, 2002
interest  payment,  for each $1,000 in principal  amount  outstanding.

                                       19

<PAGE>
                        CoreComm Limited and Subsidiaries

On February 14, 2002, we received written  notification  from Nasdaq  indicating
that we failed to comply with the minimum  market value of publicly  held shares
and minimum bid price  requirements for continued listing on the Nasdaq National
Market and that we would have until May 15,  2002 to regain  compliance.  If the
Holdco  recapitalization  is not  successfully  completed  and we do not  regain
compliance by this date, Nasdaq stated that it will then provide us with written
notification  that our common  stock will be delisted  from the Nasdaq  National
Market. We have not yet determined what actions will be taken if we receive this
written  notification.  If our common stock is delisted from the Nasdaq National
Market, shares may trade in the over-the-counter market and price quotations may
be  reported  by  other  sources.  The  extent  of the  public  market  and  the
availability of quotations for shares of our common stock would, however, depend
upon the number of holders of shares  remaining  at that time,  the  interest in
maintaining  a market in shares of our  common  stock on the part of  securities
firms,  the  possible  termination  of  registration  of the  shares  under  the
Securities Exchange Act of 1934, and other factors.

On January 22, 2002,  the  Securities  and  Exchange  Commission  issued  FR-61,
Commission  Statement  about  Management's  Discussion and Analysis of Financial
Condition and Results of Operations. The release sets forth certain views of the
Securities  and  Exchange  Commission   regarding   disclosure  that  should  be
considered  by   registrants.   Our   contractual   obligations  and  commercial
commitments are summarized below.

The  following  table  includes  aggregate  information  about  our  contractual
obligations as of March 31, 2002 and the periods in which payments are due:

<TABLE>
<CAPTION>
                                                                   Payments Due by Period
Contractual                                            Less than 1             1-3               4-5           After 5
Obligations                            Total               Year               Years             Years           Years
----------------------------------------------------------------------------------------------------------------------
                                                     (in thousands)
<S>                                <C>                        <C>               <C>           <C>                <C>
Long-Term Debt (1)                 $270,429               $ 4,750           $105,679         $160,000          $   -

Capital Lease
   Obligations                       none                     -                   -                -               -

Operating Leases                     none                     -                   -                -               -

Unconditional
   Purchase                          none                     -                   -                -               -
Obligations

Other Long-Term
   Obligations                       none                     -                   -                -               -

                                   -----------------------------------------------------------------------------------
Total Contractual
   Cash Obligations                 $270,429              $ 4,750           $105,679          $160,000          $   -
                                   ===================================================================================
</TABLE>

                                       20

<PAGE>
                        CoreComm Limited and Subsidiaries

The  following  table  includes  aggregate   information  about  our  commercial
commitments as of March 31, 2002. Commercial commitments are items that we could
be obligated  to pay in the future.  They are not required to be included in the
condensed consolidated balance sheet.

<TABLE>
<CAPTION>
                                                                             Amount of Commitment
                                                                            Expiration Per Period

    Other Commercial       Total Amounts           Less than 1            1 - 3               4 - 5              Over 5
       Commitments           Committed                 year               years               years              years
---------------------------------------------------------------------------------------------------------------------------
                                                  (in thousands)
<S>                          <C>                      <C>                <C>                 <C>                <C>
Guarantees (2)               $172,699                 $  -               $15,600             $81,900            $75,199
Lines of Credit                  None                    -                    -                   -                  -

Standby Letters of
Credit                           None                    -                    -                   -                  -


Standby   Repurchase
Obligations                      None                    -                    -                   -                  -

Other Commercial
Commitments (3)                  None                    -                    -                   -                  -
                           ------------------------------------------------------------------------------------------------
Total Commercial
Commitments                   $172,699                $  -               $15,600              $81,900            $75,199
                           ================================================================================================

<FN>
(1)  Long-term  debt includes  $164,750,000  principal  amount of 6% Convertible
     Subordinated  Notes and  $105,679,000  principal amount of Senior Unsecured
     Notes due 2003, before unamortized discount of $7,592,000.
(2)  Guarantees  include  CoreComm  Holdco's  senior secured credit  facility of
     $156,100,000,  which  is  unconditionally  guaranteed  by us  and  CoreComm
     Holdco,  and CoreComm  Holdco's 10.75% Unsecured  Convertible PIK Notes due
     April 2011 of $16,599,000 including accrued PIK interest for which CoreComm
     Holdco and us are co-obligors.
(3)  Fiberstream, Inc.'s obligations to the City of New York have been excluded.
</FN>
</TABLE>


                                       21

<PAGE>
                        CoreComm Limited and Subsidiaries


Results of Operations

The first phase of the Holdco  recapitalization  was  completed  on December 28,
2001.  As a  result  of  the  completion  of  the  first  phase  of  the  Holdco
recapitalization,  our only material asset is its ownership of approximately 13%
of the outstanding  capital stock of CoreComm Holdco.  Our operating results for
the three months ended March 31, 2001 include the operations of CoreComm Holdco.
For the three  months ended March 31,  2002,  we  accounted  for all of CoreComm
Holdco's  operations  using the equity  method.  We do not have any  significant
operations of our own.

The following table includes the condensed  consolidated statement of operations
for the three months ended March 31, 2001 for CoreComm Holdco and  Subsidiaries,
CoreComm  Limited with the  operations  of CoreComm  Holdco  deconsolidated  and
CoreComm  Limited  and  Subsidiaries  as  reported  in our  quarterly  financial
statements.
<TABLE>
<CAPTION>
                                                                 CoreComm Limited
                                              CoreComm Holdco    without Corecomm       CoreComm Limited
                                             and Subsidiaries         Holdco            and Subsidiaries
                                             -------------------------------------------------------------

<S>                                              <C>                 <C>               <C>
      Revenues                                   $   72,811,000      $    126,000      $      72,937,000

      Costs and expenses
      Operating                                      63,520,000                -              63,520,000
      Selling, general and administrative            30,795,000           804,000             31,599,000
      Corporate                                       2,098,000         1,796,000              3,894,000
      Non-cash compensation                           3,234,000                -               3,234,000
      Other charges                                     119,000                -                 119,000
      Asset impairments                             167,599,000                -             167,599,000
      Depreciation                                   12,012,000            33,000             12,045,000
      Amortization                                   31,509,000             2,000             31,511,000
                                             -------------------------------------------------------------
                                                    310,886,000         2,635,000            313,521,000
                                             -------------------------------------------------------------
      Operating (loss)                             (238,075,000)       (2,509,000)          (240,584,000)

      Other income (expense)
      Interest income and other, net                    664,000           112,000                776,000
      Interest expense                               (4,141,000)       (5,697,000)            (9,838,000)
                                             -------------------------------------------------------------
      Loss before income tax provision             (241,552,000)       (8,094,000)          (249,646,000)
      Income tax (provision)                                -             (15,000)               (15,000)
                                             -------------------------------------------------------------
      Net (loss)                                  $(241,552,000)      $(8,109,000)         $(249,661,000)
                                             =============================================================
</TABLE>

As the table  above  indicates,  the  changes  between our results for the three
months ended March 31, 2002 and 2001 primarily relate to the  deconsolidation of
CoreComm Holdco's operations on December 28, 2001. All other significant changes
between our operating  results for the three months ended March 31, 2002 and our
operating results (excluding CoreComm Holdco's  operations) for the three months
ended March 31, 2001 are discussed herein.

Three Months Ended March 31, 2002 and 2001

One of our subsidiaries  provides information  technology consulting and billing
services to an unaffiliated  wireless  company.  Revenues  decreased to $108,000
from  $126,000 as a result of a  reduction  in these  services  during the three
months ended March 31, 2002.

                                       22

<PAGE>
                        CoreComm Limited and Subsidiaries

Selling,  general and administrative expenses decreased to $68,000 from $804,000
primarily  due to the  following:  In the three months ended March 31, 2001,  we
incurred legal and other professional fees of approximately  $363,000 due to our
financing  related  activities that culminated in additional  financing in April
2001. Also in the three months ended March 31, 2001, our wholly owned subsidiary
Fiberstream,   Inc.  incurred  costs  of  $367,000.   We  substantially  reduced
Fiberstream's  operations as a result of the  modifications to our business plan
in April 2001.  Finally,  in the three months ended March 31, 2001,  our billing
services  subsidiary  incurred costs of $74,000. In the three months ended March
31, 2002, selling,  general and administrative expenses include $60,000 from our
billing services subsidiary and $8,000 from Fiberstream.

Corporate  expenses  included the costs of our officers and headquarters  staff,
the costs of  operating  the  headquarters  and  costs  incurred  for  strategic
planning and  evaluation of business  opportunities.  In 2002,  CoreComm  Holdco
incurs all corporate  expenses other than those  directly  related to us. We did
not incur any  corporate  expenses in the three months ended March 31, 2002.  In
the three months ended March 31, 2001, a  significant  portion of our  corporate
expenses was due to our financing related activities.

Interest income and other, net, decreased to $7,000 from $112,000 primarily as a
result of declining cash balances.

Interest  expense of $5,651,000  and $5,697,000 for the three months ended March
31,  2002 and 2001,  respectively,  was  related to  interest  accrued on our 6%
Convertible Subordinated Notes and our Senior Unsecured Notes Due 2003.

The income tax provision of $15,000 in 2001 was for state and local income tax.

Condensed Consolidated Statements of Cash Flows

For the three months ended March 31, 2002, cash provided by operating activities
was  $363,000,  which  consisted  primarily  of  proceeds  received  from a note
receivable on behalf of CoreComm Holdco.  We have limited  operations and do not
expect to generate any significant cash from operations in the future.

For the three months  ended March 31,  2002,  we did not have any cash flow from
investing  activities.  Our operations did not require any capital  expenditures
during  the  three  months  ended  March  31,  2002.  No   significant   capital
expenditures are anticipated in the future.

For the three months  ended March 31,  2002,  we did not have any cash flow from
financing activities.  We do not contemplate raising any additional financing in
the foreseeable future.

For the three months ended March 31, 2001 we had cash flow deficit of $1,351,000
(excluding CoreComm Holdco's cash flow deficit).

Recent Accounting Pronouncements

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets,"  effective  for us on January  1, 2002.  This
Statement  supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" and other related accounting
guidance.  The adoption of this new standard  had no  significant  effect on our
results of operations, financial condition or cash flows.

                                       23

<PAGE>
                        CoreComm Limited and Subsidiaries

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations,"  effective  for us on January 1, 2003.  This  Statement  addresses
financial   accounting  and  reporting  for  obligations   associated  with  the
retirement of tangible fixed assets and the associated asset  retirement  costs.
We are in the  process  of  evaluating  the  financial  statement  impact of the
adoption of SFAS No. 143.

In June 2001,  the FASB issued SFAS No. 141,  "Business  Combinations,"  and No.
142,  "Goodwill  and Other  Intangible  Assets."  SFAS No. 141 requires that the
purchase  method of accounting be used for all business  combinations  initiated
after  June  30,  2001.  Use of the  pooling-of-interests  method  is no  longer
permitted.  SFAS No. 141 also includes  guidance on the initial  recognition and
measurement  of  goodwill  and other  intangible  assets  acquired in a business
combination  that is  completed  after  June 30,  2001.  SFAS  No.  142 ends the
amortization of goodwill and indefinite-lived  intangible assets. Instead, these
assets must be reviewed  annually (or more frequently under certain  conditions)
for impairment in accordance  with this  statement.  This impairment test uses a
fair value approach rather than the undiscounted  cash flow approach  previously
required by SFAS No. 121,  "Accounting  for the Impairment of Long-Lived  Assets
and for Long-Lived Assets to Be Disposed Of." We adopted SFAS No. 142 on January
1, 2002.  The  adoption of this new standard  had no  significant  effect on our
results of operations, financial condition or cash flows.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Certain statements  contained herein,  specifically  excluding references to the
exchange offers, constitute "forward-looking statements" as that term is defined
under the Private  Securities  Litigation  Reform Act of 1995. When used herein,
the words,  "believe,"  "anticipate,"  "plan," "will,"  "expects,"  "estimates,"
"projects,"  "positioned,"  "strategy,"  and similar  expressions  identify such
forward-looking  statements.  All  references  in this Safe Harbor legend to the
Company shall be deemed to include  CoreComm  Limited and its  subsidiaries  and
affiliates.  Such  forward-looking  statements  involve known and unknown risks,
uncertainties  and other factors that may cause the actual results,  performance
or achievements of the Company, or industry results, to be materially  different
from those contemplated,  projected,  forecasted, estimated or budgeted, whether
expressed or implied, by such forward-looking  statements.  Such factors include
the  following:  The  Company's  ability to  continue  as a going  concern;  the
Company's continued viability if the Holdco  recapitalization is not consummated
on a timely basis;  the Company's  ability to obtain trade credit  shipments and
terms with  vendors and service  providers  for current  orders;  the  Company's
ability to maintain  contracts  that are critical to its  operations;  potential
adverse  developments  with  respect to the  Company's  liquidity  or results of
operations;  the Company's  ability to fund and execute its business  plan;  the
Company's  ability  to  attract,   retain  and  compensate  key  executives  and
employees;  the Company's ability to attract and retain customers; the potential
delisting of the Company's common stock from the Nasdaq National Market; general
economic and business conditions;  industry trends;  technological developments;
the  Company's  ability to  continue  to design and build its  network,  install
facilities,  obtain and maintain any required governmental licenses or approvals
and finance construction and development,  all in a timely manner, at reasonable
costs and on  satisfactory  terms and  conditions;  assumptions  about  customer
acceptance,  churn  rates,  overall  market  penetration  and  competition  from
providers of alternative  services;  the impact of restructuring and integration
actions; the impact of new business opportunities requiring significant up-front
investment;  interest rate fluctuations; and availability,  terms and deployment
of capital.  The Company  assumes no  obligation  to update the  forward-looking
statements contained herein to reflect actual results, changes in assumptions or
changes in factors affecting such statements.

                                       24

<PAGE>
                        CoreComm Limited and Subsidiaries

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The SEC's rule related to market risk  disclosure  requires that we describe and
quantify  our   potential   losses  from  market  risk   sensitive   instruments
attributable  to  reasonably  possible  market  changes.  Market risk  sensitive
instruments  include all financial or commodity  instruments and other financial
instruments,  such as investments and debt, that are sensitive to future changes
in interest rates,  currency  exchange rates,  commodity  prices or other market
factors.  We are not exposed to market  risks from  changes in foreign  currency
exchange  rates  or  commodity  prices.  We do  not  hold  derivative  financial
instruments nor do we hold securities for trading or speculative purposes. Under
our current  policies,  we do not use interest rate  derivative  instruments  to
manage our exposure to interest rate changes.

The fair  market  value of  long-term  fixed  interest  rate debt is  subject to
interest rate risk.  Generally the fair market value of fixed interest rate debt
will increase as interest rates fall and decrease as interest rates rise.

                                             Interest Rate Sensitivity
                                               As of March 31, 2002
                                       Principal Amount by Expected Maturity
                                               Average Interest Rate


<TABLE>
<CAPTION>
                          For the
                            Nine
                           Months
                           Ending                  For the Years Ending December 31,                                Fair Value
                         December 31, --------------------------------------------------------------              -------------
                             2002         2003         2004         2005         2006     Thereafter     Total       3/31/02
                        -------------------------------------------------------------------------------------------------------
<S>                     <C>             <C>         <C>          <C>          <C>          <C>           <C>        <C>
Long-term debt,
  including current
  Portion

Fixed rate                $ 4,750       $105,679    $      -     $     -      $ 160,000    $      -      $270,429   $    -(a)
Average interest rate        6.00%          6.47%                                  6.00%

<FN>
(a) Amount not determinable because of financial difficulty of CoreComm Limited.
</FN>
</TABLE>


                                       25

<PAGE>
                        CoreComm Limited and Subsidiaries

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS


The Company is involved in various  disputes,  arising in the ordinary course of
its  business,  which may result in pending or  threatened  litigation.  None of
these  matters are expected to have a material  adverse  effect on the Company's
financial  position,  results of operations or cash flows.  However,  certain of
these  matters,  if resolved  unfavorably  to us, could have a material  adverse
effect  on  the  Company's  business,  financial  condition  and/or  results  of
operations.

o     CoreComm  Newco,  Inc., an indirect,  wholly-owned  subsidiary of CoreComm
      Holdco,  is currently in litigation  with Ameritech  Ohio, a supplier from
      whom it  purchases  telecommunications  products  and  services,  over the
      adequacy of Ameritech's performance under a 1998 contract between CoreComm
      Newco and Ameritech,  and related issues.  This  litigation  began in June
      2001 when Ameritech  threatened to stop  processing  new orders  following
      CoreComm  Limited's  exercise of its right under the  contract to withhold
      payments for Ameritech's performance failures. In response to this threat,
      CoreComm  Limited  sought and  received  an order from an  official of the
      Public  Utilities  Commission of Ohio barring  Ameritech  from refusing to
      process new CoreComm orders. Ameritech has appealed that order to the PUCO
      and the appeal is still pending.

      On July 5, 2001,  Ameritech  filed a claim with the PUCO  seeking  payment
      from CoreComm Limited of approximately $8,600,000 allegedly owed under the
      contract.  On August  8,  2001,  Ameritech  filed a second  claim  against
      CoreComm Limited in Ohio state court, seeking an additional  approximately
      $4,300,000 in allegedly  improperly  withheld amounts. On August 28, 2001,
      CoreComm  Limited  exercised  its right to remove the state court claim to
      the United States  District  Court for the Northern  District of Ohio, and
      the parties then  stipulated  to a  consolidation  of both of  Ameritech's
      claims in the United States District Court. To consolidate the two claims,
      on October 9, 2001,  Ameritech  filed an amended  complaint  in the United
      States District Court, seeking a total of approximately $14,400,000.

      On December  26,  2001,  CoreComm  Newco  filed its answer to  Ameritech's
      amended complaint and  simultaneously  filed three  counterclaims  against
      Ameritech  and  some  of its  affiliates,  alleging  breach  of  contract,
      antitrust violations,  and fraudulent or negligent  misrepresentation.  In
      lieu of  filing an answer to  CoreComm  Newco's  counterclaims,  Ameritech
      filed a series of motions on March 25,  2002,  asking the Court to dismiss
      several of CoreComm  Newco's  counterclaims.  On April 17, 2002,  CoreComm
      Newco filed its opposition to Ameritech's requests for dismissal and these
      items are now pending before the court for disposition.

                                       26

<PAGE>
                        CoreComm Limited and Subsidiaries

      We believe that CoreComm  Newco has  meritorious  defenses to  Ameritech's
      amended   complaint,   and  that  the  amount   currently  in  dispute  is
      substantially  less than the  $14,400,000  claimed in Ameritech's  amended
      complaint. For example, the figure specified in Ameritech's complaint does
      not  account  for (a) more than $5.2  million  in refunds  that  Ameritech
      contends it has already  credited to CoreComm  Newco's  accounts since the
      filing its complaint, and (b) payments that were made by CoreComm Newco in
      the ordinary course after the time of Ameritech's submission.  However, we
      cannot be certain how or when the matter will be resolved. We also believe
      that, to the extent Ameritech  prevails with respect to any of its claims,
      Ameritech's  award  may be  offset  in  whole or in part by  amounts  that
      CoreComm   Newco  is  seeking   to  obtain   from   Ameritech   under  its
      counterclaims.  However,  it is  impossible  at this time to  predict  the
      outcome of the litigation.

o     On March 7, 2002, CoreComm Massachusetts, Inc. (an operating subsidiary of
      CoreComm  Holdco) filed a complaint and request for temporary  restraining
      order against Verizon New England d/b/a Verizon  Massachusetts  seeking to
      prevent Verizon from proceeding with its threat to implement an embargo on
      the ability of CoreComm  Massachusetts  to place  orders for new  services
      pending  the  resolution  of  a  dispute  between  the  parties  over  the
      legitimacy of various  charges  billed by Verizon in that state.  On March
      13,  2002,  the court  denied  CoreComm's  request  for a TRO and  Verizon
      proceeded to implement the threatened  service  embargo.  On April 1, 2002
      Verizon filed an answer to CoreComm's  complaint along with  counterclaims
      seeking  approximately  $1.4  million in payment  for  allegedly  past due
      charges.  On April 10,  2002,  CoreComm  Massachusetts  filed an answer to
      these counterclaims denying the accuracy of Verizon's  contentions.  We do
      not believe  that the embargo will have a material  adverse  affect on our
      business,  financial  condition  and/or  operating  results,  and CoreComm
      Massachusetts intends to defend itself vigorously and pursue all available
      claims and defenses.  However it is impossible at this time to predict the
      outcome of this litigation.

o     On December 3, 2001, General Electric Capital Corp. filed a lawsuit in the
      Circuit  Court of Cook  County,  Illinois  against  CoreComm  Limited  and
      MegsINet,  Inc.,  an  indirect  subsidiary  of  CoreComm  Holdco,  seeking
      approximately  $8 million in allegedly  past due amounts and the return of
      equipment under a capital  equipment  lease  agreement  between Ascend and
      MegsINet.  GECC is seeking all amounts  allegedly  owed under the lease as
      well  as  repossession  of  the  equipment.  On  February  19,  2002,  the
      defendants  filed a  motion  to  dismiss  several  of  GECC's  claims.  In
      response, GECC withdrew its original complaint and on May 1, 2002 filed an
      amended  complaint  naming  CoreComm  Holdco as an  additional  defendant.
      response  Defendants' to dismiss the amended complaint is presently due on
      June 5,  2002.  Concurrently,  on  April  12,  2002,  GECC  filed a second
      complaint in the Circuit Court of Cook County,  Illinois against MegsINet,
      CoreComm  Limited and CoreComm Holdco seeking a court order allowing it to
      take repossession of its alleged equipment.  After a hearing on the matter
      following defendants' opposition,  GECC withdrew its complaint and filed a
      new  action  on May 3,  2002,  in an  effort  to  supply  the  court  with
      additional  information  regarding  its alleged  rights to the  equipment.
      Defendant's response to dismiss the May 3 complaint is currently due on or
      before May 23, 2002.  Defendants  intend to defend  themselves  vigorously
      against both  complaints and to pursue all available  claims and defenses.
      However,  it is  impossible  at this time to  predict  the  outcome of the
      litigation.

                                       27

<PAGE>
                        CoreComm Limited and Subsidiaries


o     On May 25, 2001, KMC Telecom, Inc. and some of its operating  subsidiaries
      filed an  action  in the  Supreme  Court  of New York for New York  County
      against CoreComm  Limited,  Cellular  Communications of Puerto Rico, Inc.,
      CoreComm New York,  Inc. and MegsINet,  Inc. On that same date,  KMC filed
      the same cause of action in the  Circuit  Court of Cook  County,  IL. Upon
      defendant's Motion to Stay the New York action, KMC voluntarily  dismissed
      the  Illinois  litigation  and the matter is currently  proceeding  in New
      York. KMC contends that it is owed approximately $2 million,  primarily in
      respect  of  alleged  early  termination  liabilities,  under  a  services
      agreement and a co-location  agreement with MegsINet.  The defendants have
      denied KMC's  claims and have  asserted  that the  contracts at issue were
      signed without proper authorization,  that KMC failed to perform under the
      alleged contracts, and that the termination penalties are not enforceable.
      The defendants  have served  discovery and intend to defend  themselves in
      coordination  with one of their  insurance  carriers.  On March 27,  2002,
      certain of the  defendants  initiated  litigation  against  several former
      principals of MegsINet seeking  indemnification  and contribution  against
      KMC's claims.

o     On March 1, 2002,  Easton Telecom  Services,  LLC.,  referred to as Easton
      LLC,  initiated  litigation  in the  Northern  District  of  Ohio  against
      CoreComm Internet Group, Inc. asserting that Easton LLC is the assignee of
      several rights of Easton  Telecom  Services,  Inc.,  referred to as Easton
      Inc., under an asset purchase agreement approved as part of the bankruptcy
      disposition of Teligent, Inc., and demanding payment of approximately $4.9
      million, primarily in respect of alleged early termination penalities, for
      telecommunications  services  purportedly provided under alleged contracts
      between Easton and MegsINet, Inc. Subsequently,  on April 18, 2002, Easton
      filed an amended complaint in the  above-referenced  matter naming Voyager
      Information  Networks,  Inc. as an additional defendant and increasing the
      amount  in  dispute  to  approximately  $5.1  million.  On  May  7,  2002,
      defendants'  filed their  answer  denying  Easton  LLC's  allegations  and
      asserting multiple defenses,  including defenses  challenging the validity
      of the alleged  contracts and  plaintiff's  claims as to alleged  damages.
      Defendants intend to defend themselves vigorously and pursue all available
      claims and defenses. However, it is impossible at this time to predict the
      outcome of this litigation.

o     On or about  September  14, 2001,  a lawsuit was filed by  WXIII/Far  Yale
      Gen-Par,  LLC, as General  Partner of WXIII/Far  Yale Real Estate  Limited
      Partnership, referred to as Yale, against CoreComm Communications, Inc., a
      direct,  wholly-owned  subsidiary  of  CoreComm  Holdco,  and the  Company
      seeking approximately  $172,500 in unpaid rent, interest and other charges
      allegedly  owed under a  commercial  real estate  lease  between  Yale and
      CoreComm  Communications  as to which the Company is the guarantor.  On or
      about  February  5, 2002,  Yale filed a motion  with the court  requesting
      permission  to  amend  the  complaint  to  specify  a  revised  figure  of
      $404,290.87  as the  amount  allegedly  due  under the lease and to add an
      additional  count  asking  the  court  to issue a  preliminary  injunction
      preventing  the  defendants   from   transferring,   selling,   assigning,
      encumbering or otherwise hypothecating any of their assets,  including any
      debt or  equity  interests  in their  subsidiaries,  except  for usual and
      ordinary  expenses paid in the usual and ordinary  course of business.  On
      February 27, 2002,  Yale's motion for a preliminary  injunction was denied
      subject  to the  substitution  of  CoreComm  Holdco  for  the  Company  as
      guarantor on the lease and Yale's motion to specify the revised  figure of
      $404,290.87 was granted.  The defendants are currently  proceeding to make
      the  substitution  relating to the guarantee and are litigating the matter
      vigorously.

                                       28

<PAGE>
                        CoreComm Limited and Subsidiaries

o     Fiberstream,  Inc., a direct subsidiary of CoreComm  Limited,  has been in
      communications  with Metromedia Fiber Networks,  Inc., referred to as MFN,
      regarding a dispute  between the parties under a General  Agreement  dated
      September  29,  2000 and a related  Product  Order of the same  date.  The
      dispute  centers around the accuracy of certain  statements that were made
      by MFN  concerning  the nature of its network at the time of  contracting,
      the  timeliness  of the  installation  of the  circuits  by MFN  under the
      agreement,  and  Fiberstream's  obligation,  if any,  to make  payments in
      respect of those  circuits.  MFN has indicated that unless payment is made
      for the circuits, it may initiate arbitration under the agreement and seek
      early  termination  penalties  in excess of  approximately  $1.1  million.
      Fiberstream has rejected MFN's demands and has advised that it will defend
      itself vigorously and pursue all available counterclaims, including claims
      for  fraudulent  inducement  relating to the execution of the contract and
      damages  arising from MFN's alleged failure to perform under the contract.
      The parties  have  discussed  the  prospect of settling  their  respective
      claims without resort to litigation  and those  discussions  are presently
      ongoing.

o     On October 9, 2001,  Enavis Networks,  Inc. filed an action in the Circuit
      Court of Pinellas County,  Florida against CoreComm Limited asserting that
      Enavis is owed  approximately  $420,000  relating to the alleged  sale and
      installation of telecommunications  equipment by Enavis. The Company filed
      a motion to dismiss this action for lack of personal jurisdiction over the
      Company in Florida and this motion is still  pending.  Upon  resolution of
      the motion to dismiss in Florida and assuming that the matter  proceeds in
      litigation,  the  Company  intends to defend this  action  vigorously  and
      assert  counterclaims  against  Enavis  arising  from  Enavis'  failure to
      provide equipment complying with CoreComm's specifications.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Since March 31, 2001, the Company has failed to declare  dividends on any series
of preferred  stock.  Thus,  no quarterly  dividends  have been paid on the 8.5%
Senior Convertible Preferred Stock, Series A (the "Series A Preferred"),  or the
Company's Series B Senior Convertible  Exchangeable Preferred Stock (the "Series
B  Preferred")  since  December  31,  2000.  The total  arrearage  on the unpaid
dividends on the Series A Preferred  is equal to $5.7  million  which would have
been  payable  either in the form of  additional  shares of  preferred or common
stock, at the Company's  option;  the total arrearage on the unpaid dividends on
the Series B Preferred is equal to $18.2 million,  which would have been payable
either in the form of common stock or cash, at the Company's option.  The unpaid
dividends on each class of preferred stock continue to accrue until paid.  These
securities are currently held by CoreComm Holdco.

                                       29

<PAGE>
                        CoreComm Limited and Subsidiaries

ITEM 5.   OTHER INFORMATION

(a)   On February 14,  2002,  the Company  received  written  notification  from
      Nasdaq  indicating  that it failed to comply with the minimum market value
      of publicly held shares and minimum bid price  requirements  for continued
      listing on the Nasdaq National Market and that it would have until May 15,
      2002  to  regain  compliance.   If  the  Holdco  recapitalization  is  not
      successfully  completed and the Company does not regain compliance by this
      date,  Nasdaq  stated that it will then  provide the Company  with written
      notification  that its  common  stock  will be  delisted  from the  Nasdaq
      National  Market.  The Company has not yet determined  what action it will
      take if it receives this written  notification.  If the  Company's  common
      stock is delisted from the Nasdaq National Market, shares may trade in the
      over-the-counter  market and price  quotations  may be  reported  by other
      sources.  The  extent  of  the  public  market  and  the  availability  of
      quotations for shares of the Company's common stock would, however, depend
      upon the number of holders of shares  remaining at that time, the interest
      in  maintaining  a market in shares of the  Company's  common stock on the
      part of securities firms, the possible  termination of registration of the
      shares under the Securities Exchange Act of 1934, and other factors.

(b)   The  CoreComm  Holdco,  Inc.  and  Subsidiaries   Consolidated   Financial
      Statements,  Management's Discussion and Analysis of Results of Operations
      and Financial Condition and Quantitative and Qualitative Disclosures about
      Market Risk are included in Item 5 of Part II-see the Index on page S-1.

                                       30

<PAGE>
                        CoreComm Limited and Subsidiaries

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits.

          None

     (b)  Reports on Form 8-K.

          During  the  quarter  ended  March 31,  2002,  the  Company  filed the
          following reports on Form 8-K:

          (i)  Report  dated  January  8,  2002,  reporting  under Item 5, Other
               Events,  that CoreComm issued a press release  announcing closing
               of  recapitalization  transactions,  which  it had  announced  on
               December 18, 2001.
          (ii) Report  dated  January 18,  2002,  reporting  under Item 5, Other
               Events,  that CoreComm  issued a press release voicing its strong
               support for the FCC's action  proposing a $6 million fine against
               SBC  Communications  for  refusing  to provide  competitors  with
               non-discriminatory access to SBC's shared transport network.
          (iii)Report  dated  February  8, 2002,  reporting  under Item 5, Other
               Events,  that CoreComm issued a press release announcing that its
               formerly wholly-owned  subsidiary CoreComm Holdco, Inc. had filed
               registration   statements   with  the   Securities  and  Exchange
               Commission,  launched the previously  announced registered public
               exchange  offers and that the  Companies  had made changes in the
               management roles of certain of their senior executives.
          (iv) Report dated March 8, 2002, reporting under Item 5, Other Events,
               that   CoreComm   issued  a  press   release  with  its  formerly
               wholly-owned  subsidiary  CoreComm  Holdco,  Inc.  announcing the
               extension  of  the  expiration  date  of  the  registered  public
               exchange  offers by CoreComm  Holdco  until 5 PM.,  New York City
               time, on April 8, 2002.

No financial statements were filed with these reports.


                                       31

<PAGE>


                                   SIGNATURES



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



                                 CORECOMM LIMITED



Date:    May 15, 2002             By: /s/ Michael A. Peterson
                                 -------------------------
                                 Michael A. Peterson
                                 Executive Vice President,
                                 Chief Operating Officer and
                                 Chief Financial Officer



Date:    May 15, 2002             By: /s/ Gregg N. Gorelick
                                 --------------------------
                                 Gregg N. Gorelick
                                 Senior Vice President-Controller and Treasurer
                                 (Principal Accounting Officer)



                                       32

<PAGE>

                     CoreComm Holdco, Inc. and Subsidiaries

                         INDEX TO FINANCIAL INFORMATION

The following financial information of CoreComm Holdco, Inc. and Subsidiaries is
included in Item 5 of Part II:

Index to Financial Information of CoreComm Holdco, Inc. and Subsidiaries.....S-1
Condensed Consolidated Balance Sheets - March 31, 2002 (Unaudited)
     and December 31, 2001 ..................................................S-2
Condensed Consolidated Statements of Operations -
     Three months ended March 31, 2002 and 2001 (Unaudited) .................S-3
Condensed Consolidated Statement of Shareholders' Equity -
     Three months ended March 31, 2002 (Unaudited) ..........................S-4
Condensed Consolidated Statements of Cash Flows -
     Three months ended March 31, 2002 and 2001 (Unaudited) .................S-5
Notes to Unaudited Condensed Consolidated Financial Statements ..............S-6

Management's Discussion and Analysis of Results of
     Operations and Financial Condition.....................................S-19

Quantitative and Qualitative Disclosures about Market Risk..................S-30



                                      S-1

<PAGE>
<TABLE>
<CAPTION>
                                             CoreComm Holdco, Inc. and Subsidiaries

                                             Condensed Consolidated Balance Sheets
                                                                                               March 31,         December 31,
                                                                                                  2002               2001
                                                                                            ----------------------------------
                                                                                              (Unaudited)         (See Note)
<S>                                                                                          <C>                 <C>
Assets
Current assets:
   Cash and cash equivalents                                                                $  26,841,000       $  24,966,000
   Accounts receivable-trade, less allowance for doubtful accounts
     of $8,388,000 (2002) and $9,759,000 (2001)                                                34,365,000          32,261,000
   Due from CoreComm Limited                                                                           --             646,000
   Other                                                                                        3,381,000           3,683,000
                                                                                            ----------------------------------
Total current assets                                                                           64,587,000          61,556,000

Fixed assets, net                                                                              80,339,000          86,722,000
Investment in CoreComm Limited                                                                  3,863,000           3,863,000
Goodwill                                                                                      152,889,000         152,889,000
Intangible assets, net                                                                         29,573,000          30,860,000
Other, net of accumulated amortization of $203,000 (2002) and none (2001)                      10,883,000          11,393,000
                                                                                            ----------------------------------
                                                                                            $ 342,134,000       $ 347,283,000
                                                                                            ==================================
Liabilities and shareholders' equity Current liabilities:
  Accounts payable                                                                          $  45,893,000       $  37,348,000
  Accrued expenses                                                                             68,229,000          67,766,000
  Due to NTL Incorporated                                                                         315,000             917,000
  Due to CoreComm Limited                                                                         254,000                  --
  Current portion of long-term debt and capital lease obligations                               9,426,000           9,667,000
  Deferred revenue                                                                             28,195,000          29,652,000
                                                                                            ----------------------------------
Total current liabilities                                                                     152,312,000         145,350,000

Long-term debt                                                                                156,100,000         156,100,000
Notes payable to related parties                                                               16,599,000          16,174,000
Capital lease obligations                                                                         244,000             267,000

Commitments and contingent liabilities

Shareholders' equity:
  Series preferred stock - $.01 par value, authorized 10,000,000 shares:                               --                  --
     issued and outstanding none                                                                       --                  --
  Common stock - $.01 par value, authorized 250,000,000 shares; issued and outstanding
    30,000,000 shares                                                                             300,000             300,000
Additional paid-in capital                                                                     29,092,000          29,092,000
Deficit                                                                                       (12,513,000)                 --
                                                                                            ----------------------------------
                                                                                               16,879,000          29,392,000
                                                                                            ----------------------------------
                                                                                            $ 342,134,000       $ 347,283,000
                                                                                            ==================================

Note:  The balance sheet at December 31, 2001 has been derived from the audited balance sheet at that date.

See accompanying notes.

                                                              S-2

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                       CoreComm Holdco, Inc. and Subsidiaries

                   Condensed Consolidated Statements of Operations
                                     (Unaudited)



                                                     Three Months Ended March 31,
                                                      2002                 2001
                                                 ----------------------------------

<S>                                              <C>                 <C>
Revenues                                         $  74,311,000       $  72,811,000

Costs and expenses
Operating                                           48,038,000          63,520,000
Selling, general and administrative                 22,313,000          30,795,000
Corporate                                            1,698,000           2,098,000
Non-cash compensation                                       --           3,234,000
Recapitalization costs                               1,182,000                  --
Other charges                                               --             119,000
Asset impairments                                           --         167,599,000
Depreciation                                         8,881,000          12,012,000
Amortization                                         1,287,000          31,509,000
                                                 ----------------------------------
                                                    83,399,000         310,886,000
                                                 ----------------------------------
Operating loss                                      (9,088,000)       (238,075,000)

Other income (expense)
Interest income and other, net                         134,000             664,000
Interest expense                                    (3,559,000)         (4,141,000)
                                                 ----------------------------------
Net loss                                         $ (12,513,000)      $(241,552,000)
                                                 ==================================

Basic and diluted net loss per common share      $        (.42)      $       (8.46)
                                                 ==================================

Weighted average number of shares                   30,000,000          28,542,000
                                                 ==================================


See accompanying notes.

                                        S-3

</TABLE>

<PAGE>
                       CoreComm Holdco, Inc. and Subsidiaries

              Condensed Consolidated Statement of Shareholders' Equity
                                     (Unaudited)


<TABLE>
<CAPTION>
                                                       Common Stock                Additional
                                                  Shares            Par          Paid-In Capital       Deficit

Balance, December 31, 2001                      30,000,000       $ 300,000        $  29,092,000  $              -
Net loss                                                                                               (12,513,000)
                                          --------------------------------------------------------------------------
<S>                                           <C>              <C>              <C>                 <C>
Balance, March 31, 2002                         30,000,000       $ 300,000        $  29,092,000       $(12,513,000)
                                          ==========================================================================
</TABLE>



The  Condensed   Consolidated  Statement  of  Shareholders'  Equity  and  shares
outstanding  for  purposes  of  computing  basic and diluted net loss per common
share reflects on a retroactive  basis the 3-for-1 stock split by way of a stock
dividend paid on April 12, 2002.

See accompanying notes.


                                        S-4

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                               Three Months Ended March 31,
                                                                 2002               2001
                                                            --------------------------------

<S>                                                         <C>                <C>
Net cash provided by (used in) operating activities         $  4,544,000       $(18,555,000)

Investing activities
Purchase of fixed assets                                      (2,405,000)          (530,000)
Proceeds from sales of marketable securities                          --          2,737,000
                                                            --------------------------------
Net cash provided by (used in) investing activities           (2,405,000)         2,207,000

Financing activities
Proceeds from borrowing, net of financing costs                       --          9,736,000
Principal payments                                                    --         (1,559,000)
Principal payments of capital lease obligations                 (264,000)        (4,560,000)
                                                            --------------------------------
Net cash provided by (used in) financing activities             (264,000)         3,617,000
                                                            --------------------------------
Increase (decrease) in cash and cash equivalents               1,875,000        (12,731,000)
Cash and cash equivalents at beginning of period              24,966,000         22,773,000
                                                            --------------------------------
Cash and cash equivalents at end of period                  $ 26,841,000       $ 10,042,000
                                                            ================================

Supplemental disclosure of cash flow information
 Cash paid for interest                                     $  2,727,000       $  1,110,000
                                                            ================================

Supplemental schedule of non-cash investing activities
 Liabilities incurred to acquire fixed assets               $     93,000       $  3,691,000
                                                            ================================
</TABLE>

See accompanying notes.


                                        S-5
<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Note 1.  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  pursuant  to the  rules  and  regulations  of  the  SEC.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results for the three months ended March 31, 2002 are not necessarily
indicative of the results that may be expected for the year ending  December 31,
2002. For further  information,  refer to the consolidated  financial statements
and footnotes thereto included in Item 14(d) of CoreComm Limited's annual report
on Form 10-K for the year ended December 31, 2001.

Note 2.   Holdco Recapitalization

In April 2001,  the Company and CoreComm  Limited  completed a  reevaluation  of
their business plan in light of current market  conditions and made  significant
modifications to the plans. The Company  streamlined its strategy and operations
to focus on its two most successful and promising  lines of business.  The first
is integrated communications products and other high bandwidth/data/web-oriented
services for the business  market.  The second is bundled  local  telephony  and
Internet   products    efficiently   sold,    serviced   and   provisioned   via
Internet-centric interfaces to the residential market.

Also in April  2001,  the Company and  CoreComm  Limited  commenced a process to
potentially sell their assets and businesses (now owned by the Company) that are
not directly related to their competitive local exchange carrier, referred to as
CLEC,  business,  and retained advisors for the purpose of conducting this sale.
The  Company's  CLEC assets and  businesses  include its local and  toll-related
telephone  services  that compete with the  incumbent  local  exchange  carrier,
referred to as ILEC.

In  October  2001,  the  Company  and  CoreComm  Limited  commenced  the  Holdco
recapitalization. CoreComm Limited entered into agreements with numerous holders
of its 6% Convertible  Subordinated  Notes Due 2006 whereby the holders  agreed,
among other  things,  to  exchange  their notes for the amount of the October 1,
2001 interest payment of $4.8 million in the aggregate in cash and shares of the
Company's common stock.  The exchange was completed in December 2001,  including
the payment of the $4.8 million by CoreComm Limited.

On  December  28,  2001,  the  Company  completed  the first phase of the Holdco
recapitalization,  which was the  exchange  of shares  of its  common  stock for
substantial  amounts  of  the  outstanding  indebtedness  of  CoreComm  Limited,
substantial amounts of the outstanding  indebtedness of the Company and CoreComm
Limited as co-obligors  and all of the  outstanding  preferred stock of CoreComm
Limited.

                                       S-6

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 2.   Holdco Recapitalization (continued)

The following summarizes the indebtedness and preferred stock that was exchanged
for shares of the Company's common stock in December 2001:


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
               Description                      Date Issued                  Issuer                  Principal Amount or
                                                                                                   Stated Value when Issued
-------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                     <C>                          <C>
10.75% Unsecured Convertible PIK Notes                             CoreComm Limited and the
   due 2011                                April 2001              Company                      $10.0 million
-------------------------------------------------------------------------------------------------------------------------------
10.75% Senior Unsecured Convertible PIK                            CoreComm Limited and the
   Notes Due 2010                          December 2000           Company                      $16.1 million
-------------------------------------------------------------------------------------------------------------------------------
Senior Unsecured Notes Due
   September 29, 2003                      September 2000          CoreComm Limited             $108.7 million
-------------------------------------------------------------------------------------------------------------------------------
6% Convertible Subordinated
   Notes Due 2006                          October 1999            CoreComm Limited             $175.0 million (1)
-------------------------------------------------------------------------------------------------------------------------------
Series A and Series A-1 Preferred Stock    September 2000          CoreComm Limited             $51.1 million
-------------------------------------------------------------------------------------------------------------------------------
Series B Preferred Stock                   September 2000          CoreComm Limited             $250.0 million
-------------------------------------------------------------------------------------------------------------------------------

<FN>
(1)  $164.75  million was outstanding as of December 31, 2001, of which $160 million
     was exchanged.
</FN>
</TABLE>


As indicated  above,  the Company  exchanged  the  approximately  $10.8  million
principal and accrued  interest of 10.75%  Unsecured  Convertible  PIK Notes Due
2011 and the  approximately  $18.0  million  principal  and accrued  interest of
10.75% Senior Unsecured  Convertible PIK Notes Due 2010 for shares of its common
stock.  The Company  recorded an  extraordinary  gain of $25.7  million from the
extinguishment  of these notes, and incurred costs of $2.7 million in connection
with the  Holdco  recapitalization.  This  gain is  based  on the fair  value of
$0.9797  per share for the  shares  issued by the  Company in  exchange  for the
notes.  The Company  incurred  additional  costs in  connection  with the Holdco
recapitalization of $1,182,000 during the three months ended March 31, 2002.

As a result of the completed  exchanges in December 2001,  approximately  87% of
the Company's  outstanding shares, or 26,056,806 shares, are owned by the former
holders of  indebtedness  of the  Company  and  CoreComm  Limited and the former
holders of  CoreComm  Limited  preferred  stock,  and  approximately  13% of the
Company's  outstanding  shares, or 3,943,248 shares,  continue to be held by the
CoreComm Limited.

                                       S-7

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 2.   Holdco Recapitalization (continued)

As part of the second phase of the Holdco recapitalization, on February 8, 2002,
the Company launched registered public exchange offers whereby it is offering to
exchange  its shares of common stock which will have been  registered  under the
Securities  Act  of  1933,  as  amended,  pursuant  to a Form  S-4  registration
statement  to all holders of CoreComm  Limited  common  stock and all  remaining
holders of 6% Convertible  Subordinated  Notes due 2006 of CoreComm  Limited for
their CoreComm  Limited common stock and their notes,  respectively.  As soon as
practicable  after  accepting at least 90% of the oustanding  shares of CoreComm
Limited common stock in the exchange  offers,  the Company plans to transfer all
such  shares  to a newly  formed,  wholly-owned  subsidiary  and to  merge  this
subsidiary into CoreComm Limited with CoreComm Limited surviving the merger as a
wholly-owned subsidiary of the Company.

As a result of the first phase of the Holdco recapitalization, the Company holds
$160  million  principal  amount  of  the  CoreComm   Limited's  6%  Convertible
Subordinated  Notes,  approximately  $105.7 million principal amount of CoreComm
Limited's  Senior  Unsecured  Notes and all of  CoreComm  Limited's  outstanding
preferred  stock.  CoreComm  Limited  has agreed that it will  surrender  to the
Company  the number of shares of the  Company's  common  stock that the  Company
issues in the  exchange  offers  and the  merger.  Therefore,  if the  merger is
completed,  CoreComm  Limited will own no common stock of the Company,  and thus
will own no material  assets,  since the common stock of the Company is CoreComm
Limited's only material  asset.  In exchange for CoreComm  Limited  surrendering
such shares of the Company's common stock, CoreComm Limited and the Company have
agreed to waivers and amendments to delay  CoreComm  Limited from having to make
any payments  with respect to these  securities  through  April 2003.  If such a
merger does not occur,  CoreComm  Limited does not anticipate  that it will have
the financial  resources to meet the  obligations  under its notes and preferred
stock if the Company requires it to do so.

Under the exchange offers, those shareholders and noteholders who exchange their
shares and notes, respectively, will receive shares of the Company, and would no
longer have securities of CoreComm Limited.

CoreComm Limited may lack the resources to meet the obligations of the remaining
$4.75 million principal amount of 6% Convertible Subordinated Notes that are not
held by the  Company.  CoreComm  Limited  also  remains a party liable under the
$156.1  million senior  secured  credit  facility,  has no right to withdraw any
additional  money under that  facility,  and does not expect to be able to raise
additional financing in the foreseeable future. CoreComm Limited has a liquidity
problem that raises  substantial  doubt about its ability to continue as a going
concern.  CoreComm Limited intends to resolve its liquidity  problem through the
completion of the Holdco recapitalization  exchange offers, however the exchange
offers may not be completed.

                                       S-8

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 2.   Holdco Recapitalization (continued)

On December 17, 2001,  Nasdaq granted  CoreComm Limited an exception to Nasdaq's
stockholder  approval  requirements  permitting the Holdco  recapitalization  to
proceed without a vote of CoreComm  Limited's  stockholders  because requiring a
stockholder  vote  would  seriously   jeopardize  CoreComm  Limited's  financial
viability.  Pursuant to  conversations  with  Nasdaq,  the Company and  CoreComm
Limited intend to transfer  CoreComm  Limited's  current  listing to the Company
following  successful  completion of the exchange offers. The Company expects to
become the Nasdaq  listed  entity and to be subject to the  continued  inclusion
requirements of the Nasdaq National Market.

On February 14, 2002, CoreComm Limited received written notification from Nasdaq
indicating  that it failed to comply with the minimum  market  value of publicly
held shares and  minimum bid price  requirements  for  continued  listing on the
Nasdaq  National  Market.  CoreComm  Limited  has until  May 15,  2002 to regain
compliance.  If the Holdco  recapitalization  is not successfully  completed and
CoreComm Limited does not regain  compliance by this date, Nasdaq stated that it
will then provide  CoreComm Limited written  notification  that its common stock
will be delisted from the Nasdaq National  Market.  CoreComm Limited has not yet
determined what actions will be taken if it receives this written  notification.
If CoreComm  Limited's common stock is delisted from the Nasdaq National Market,
shares  may trade in the  over-the-counter  market and price  quotations  may be
reported by other sources.  The extent of the public market and the availability
of  quotations  for shares of CoreComm  Limited's  common stock would,  however,
depend upon the number of holders of shares remaining at that time, the interest
in  maintaining a market in shares of the common stock on the part of securities
firms,  the  possible  termination  of  registration  of the  shares  under  the
Securities Exchange Act of 1934, and other factors.

The  Company  holds $160  million  principal  amount of  CoreComm  Limited's  6%
Convertible  Subordinated Notes Due 2006, approximately $105.7 million principal
amount of CoreComm  Limited's  Senior  Unsecured  Notes due  September 29, 2003,
approximately  51,000 shares of CoreComm  Limited's Series A preferred stock and
250,000 shares of CoreComm Limited's Series B preferred stock as a result of the
exchanges.  The  Company's  investment  in CoreComm  Limited notes and preferred
stock is $3,863,000.

Note 3.   Recent Accounting Pronouncements

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal of  Long-Lived  Assets,"  effective for the Company on January 1, 2002.
This  Statement  supercedes  SFAS No. 121,  "Accounting  for the  Impairment  of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" and other related
accounting guidance. The adoption of this new standard had no significant effect
on the results of operations, financial condition or cash flows of the company.

                                       S-9

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 3.   Recent Accounting Pronouncements (continued)

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations,"  effective  for the  Company on January  1, 2003.  This  Statement
addresses financial accounting and reporting for obligations associated with the
retirement of tangible fixed assets and the associated asset  retirement  costs.
The Company is in the process of evaluating  the financial  statement  impact of
the adoption of SFAS No. 143.

In June 2001,  the FASB issued SFAS No. 141,  "Business  Combinations,"  and No.
142,  "Goodwill  and Other  Intangible  Assets."  SFAS No. 141 requires that the
purchase  method of accounting be used for all business  combinations  initiated
after  June  30,  2001.  Use of the  pooling-of-interests  method  is no  longer
permitted.  SFAS No. 141 also includes  guidance on the initial  recognition and
measurement  of  goodwill  and other  intangible  assets  acquired in a business
combination  that is  completed  after  June 30,  2001.  SFAS  No.  142 ends the
amortization of goodwill and indefinite-lived  intangible assets. Instead, these
assets must be reviewed  annually (or more frequently under certain  conditions)
for impairment in accordance  with this  statement.  This impairment test uses a
fair value approach rather than the undiscounted  cash flow approach  previously
required by SFAS No. 121,  "Accounting  for the Impairment of Long-Lived  Assets
and for Long-Lived  Assets to Be Disposed Of." The Company  adopted SFAS No. 142
on January 1, 2002. The adoption of this new standard had no significant  effect
on the results of operations,  financial condition or cash flows of the Company,
other than amortization of goodwill ceased as of January 1, 2002.

Note 4.   Revenues

<TABLE>
<CAPTION>
                                                    Three Months Ended March 31,
                                                        2002             2001
                                                 -----------------------------------

<S>                                                   <C>               <C>
  Local exchange services                             $26,272,000       $23,865,000
  Toll-related telephony services                      17,689,000        20,663,000
  Internet, data and web-related services              23,444,000        22,553,000
  Other (a)                                             6,906,000         5,730,000
                                                 -----------------------------------
                                                      $74,311,000       $72,811,000
                                                 ===================================
<FN>
(a)      Other includes wireless, paging and information services
</FN>
</TABLE>


                                      S-10
<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 5.   Asset Impairments

At March 31, 2001, the Company reduced the carrying  amount of goodwill  related
to two of its acquisitions by $167,599,000.  In connection with the reevaluation
of its business  plan and the decision to sell its non-CLEC  assets and business
announced  in April  2001,  the Company  was  required to report all  long-lived
assets and  identifiable  intangibles to be disposed of at the lower of carrying
amount or  estimated  fair  value  less  cost to sell.  The  carrying  amount of
goodwill  related to these  acquisitions  was  eliminated  before  reducing  the
carrying  amounts of other assets.  The estimated fair value of these businesses
was determined based on information provided by the investment bank retained for
the purpose of conducting this sale.

Note 6.   Intangible Assets

Intangible assets consist of:

<TABLE>
<CAPTION>
                                                                                March 31,          December 31,
                                                                                   2002                2001
                                                                            ---------------------------------------
                                                                               (unaudited)
<S>                                                                                 <C>                 <C>
LMDS license costs                                                                  $4,230,000          $4,230,000
Customer lists, net of accumulated amortization of $1,287,000 (2002)
    and none (2001)                                                                 25,343,000          26,630,000
                                                                            ---------------------------------------
                                                                                   $29,573,000         $30,860,000
                                                                            =======================================
</TABLE>

Note 7.   Fixed Assets

Fixed assets consist of:

<TABLE>
<CAPTION>
                                          March 31,              December 31,
                                            2002                     2001
                                      -------------------------------------------
                                         (unaudited)
<S>                                          <C>                  <C>
Operating equipment                          $37,321,000          $35,388,000
Computer hardware and software                33,792,000           33,692,000
Other equipment                               17,752,000           17,642,000
Construction-in-progress                         355,000                    -
                                      -------------------------------------------
                                              89,220,000           86,722,000
Accumulated depreciation                      (8,881,000)                   -
                                      -------------------------------------------
                                             $80,339,000          $86,722,000
                                      ===========================================
</TABLE>

                                      S-11

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 8.   Accrued Expenses

Accrued expenses consist of:
<TABLE>
<CAPTION>
                                           March 31,              December 31,
                                             2002                     2001
                                        ------------------------------------------
                                          (unaudited)

<S>                                           <C>                     <C>
  Payroll and related                         $7,907,000              $7,517,000
  Professional fees                              686,000                 935,000
  Taxes, including income taxes               13,713,000              16,534,000
  Accrued equipment purchases                    134,000                 385,000
  Toll and interconnect                       30,743,000              28,668,000
  Reorganization costs                         6,653,000               7,273,000
  Other                                        8,393,000               6,454,000
                                        ------------------------------------------
                                             $68,229,000             $67,766,000
                                        ==========================================
</TABLE>

Note 9.   Long-Term Debt

Long-term debt consists of:
                                          March 31,          December 31,
                                            2002                 2001
                                     ----------------------------------------
                                         (unaudited)

Senior secured credit facility             $156,100,000         $156,100,000
Other                                                 -               33,000
                                     ----------------------------------------
                                            156,100,000          156,133,000
Less current portion                                  -               33,000
                                     ----------------------------------------
                                           $156,100,000         $156,100,000
                                     ========================================

The interest rate on the senior  secured credit  facility was initially,  at the
Company's option, either 3.25% per annum plus the base rate, which is the higher
of the prime rate or the federal funds  effective  rate plus 0.5% per annum;  or
the  reserve-adjusted  London  Interbank  Offered Rate plus 4.25% per annum.  In
April 2001 the interest  rate was amended to, at the  Company's  option,  either
3.5% per annum plus the base rate,  which is the higher of the prime rate or the
federal funds effective rate plus 0.5% per annum, or the reserve-adjusted London
Interbank  Offered  Rate plus  4.5% per  annum.  Interest  is  payable  at least
quarterly.  The unused  portion of the facility is subject to a  commitment  fee
equal to 1.25% per annum  payable  quarterly,  subject to reduction to 1.00% per
annum based upon the amount  borrowed under the facility.  At March 31, 2002 and
December 31, 2001, the effective  interest rate on the amounts  outstanding  was
6.86%.  Effective  April 13, 2002,  the interest  rate on the facility is 6.75%,
which will remain in effect until October 12, 2002.

                                      S-12
<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 10.  Related Party Transactions

Some of the officers and directors of the Company are also officers or directors
of NTL Incorporated, referred to as NTL. In April 2001, CoreComm Limited and the
Company as co-obligors  issued to NTL $15 million aggregate  principal amount of
10.75%  Unsecured  Convertible  PIK Notes Due April 2011.  At March 31, 2002 and
December 31, 2001, the total amount of the notes outstanding was $16,599,000 and
$16,174,000, respectively.

NTL  provided  the  Company  with  management,  financial,  legal and  technical
services,  access to office space and  equipment  and use of  supplies.  Amounts
charged to the Company by NTL  consisted of salaries and direct costs  allocated
to the Company  where  identifiable,  and a  percentage  of the portion of NTL's
corporate  overhead,  which cannot be  specifically  allocated to NTL. It is not
practicable  to  determine  the amounts of these  expenses  that would have been
incurred had the Company operated as an unaffiliated  entity.  In the opinion of
management,  this  allocation  method is reasonable.  For the three months ended
March 31, 2002 and 2001, NTL charged the Company $84,000 and $104,000,  which is
included in corporate expenses.

The Company  provided NTL with access to office space and  equipment and the use
of supplies for which it charged NTL a percentage  of the  Company's  total rent
and supplies  expense.  The Company  ceased to provide NTL with access to office
space and  supplies  in the third  quarter  of 2001.  It is not  practicable  to
determine  the amounts of these  expenses  that would have been incurred had the
Company operated as an unaffiliated  entity. In the opinion of management,  this
allocation method was reasonable. For the three months ended March 31, 2001, the
Company charged NTL $67,000, which reduced corporate expenses.

A subsidiary of the Company provides billing and software  development  services
to  subsidiaries of NTL. The Company charges an amount in excess of its costs to
provide  these  services.  General and  administrative  expenses were reduced by
$312,000  and  $467,000  for the three  months  ended  March 31,  2002 and 2001,
respectively, as a result of these charges.

In 2001,  the Company and NTL entered into a license  agreement  whereby NTL was
granted an exclusive, irrevocable, perpetual license to certain billing software
developed by the Company for telephony rating, digital television events rating,
fraud management and other tasks. The sales price was cash of $12.8 million. The
billing  software was being used by NTL at the time of this  agreement,  and was
being  maintained  and  modified  by  the  Company  under  an  ongoing  software
maintenance and development outsourcing  arrangement between the companies.  The
Company  recorded the  aggregate  $12.8  million as deferred  revenue,  of which
$1,068,000 was recognized during the three months ended March 31, 2002.

                                      S-13

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 10.  Related Party Transactions (continued)

The Company  leases office space from entities  controlled by an individual  who
owns 32% of the outstanding  shares of the Company's common stock.  Rent expense
for  these  leases  for the  three  months  ended  March  31,  2002 and 2001 was
approximately $450,000 and $400,000, respectively.

Note 11.  Shareholders' Equity

Stock Split

On April 12, 2002, the Company  declared a 3-for-1 stock split by way of a stock
dividend,  which was paid on the  declaration  date. The condensed  consolidated
financial  statements and the notes thereto give retroactive effect to the stock
split.

Non-Cash Compensation

In April 2000, the  Compensation  and Option Committee of the Board of Directors
approved the issuance of options to purchase  approximately  2,747,000 shares of
the Company's common stock to various  employees at an exercise price of $14.55,
which was less than the fair market value of the  Company's  common stock on the
date of the grant. In accordance with APB Opinion No. 25,  "Accounting for Stock
Issued  to  Employees,"   in  April  2000,  the  Company   recorded  a  non-cash
compensation  expense of  approximately  $29.0  million and a non-cash  deferred
expense of approximately $31.3 million.  From January 1, 2001 to March 31, 2001,
$3.2 million of the deferred non-cash compensation was charged to expense.

Note 12. Other Charges

Other  charges of  $119,000  for the three  months  ended March 31, 2001 are for
adjustments  relating  to the  Company's  announcement  in  December  2000  of a
reorganization  of certain of its operations.  These charges include  additional
employee  severance and related  costs of $351,000,  offset by a reversal of the
lease exit provision of $232,000.

The following table  summarizes the  reorganization  charges utilized during the
three months ended March 31, 2002:

<TABLE>
<CAPTION>
                                   Employee
                                   Severance       Lease
                                  And Related       Exit        Agreement
                                     Costs         Costs       Terminations    Total
                                -------------------------------------------------------
                                                             (in thousands)
<S>                                <C>            <C>          <C>          <C>
Balance, December 31, 2001           $509           $3,106       $3,658       $7,273
Adjustments                            60                2          (64)         (2)
Utilized                             (267)            (324)         (27)       (618)
                                ------------------------------------------------------
Balance, March 31, 2002               $302          $2,784       $3,567       $6,653
                                ======================================================
</TABLE>

                                      S-14

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 13.  Commitments and Contingent Liabilities

As of March 31, 2002,  the Company had  purchase  commitments  of  approximately
$5,700,000 outstanding.

Legal Proceedings

The Company  purchases  goods and services  from a wide variety of vendors under
contractual and other arrangements that sometimes give rise to litigation in the
ordinary  course of business.  The Company also provides goods and services to a
wide range of customers under  arrangements that sometimes lead to disputes over
payment, performance and other obligations.  Some of these disputes,  regardless
of their merit, could subject the Company to costly litigation and the diversion
of its technical and/or management personnel.  Additionally,  any liability from
litigation  that is not  covered  by the  Company's  insurance  or  exceeds  its
coverage  could  have a  material  adverse  effect  on its  business,  financial
condition and/or  operating  results.  Currently,  the Company has the following
outstanding  matters,  which,  if  resolved  unfavorably,  could have a material
adverse effect on the Company's business,  financial condition and/or results of
operations:

o     CoreComm Newco, Inc., an indirect, wholly-owned subsidiary of the Company,
      is currently in litigation  with  Ameritech  Ohio, a supplier from whom it
      purchases  telecommunications  products and services, over the adequacy of
      Ameritech's  performance  under a 1998 contract between CoreComm Newco and
      Ameritech,  and related issues.  This  litigation  began in June 2001 when
      Ameritech  threatened to stop  processing  new orders  following  CoreComm
      Limited's  exercise of its right under the  contract to withhold  payments
      for Ameritech's performance failures. In response to this threat, CoreComm
      Limited  sought  and  received  an order  from an  official  of the Public
      Utilities  Commission of Ohio barring  Ameritech  from refusing to process
      new CoreComm orders. Ameritech has appealed that order to the PUCO and the
      appeal is still pending.

      On July 5, 2001,  Ameritech  filed a claim with the PUCO  seeking  payment
      from CoreComm Limited of approximately $8,600,000 allegedly owed under the
      contract.  On August  8,  2001,  Ameritech  filed a second  claim  against
      CoreComm Limited in Ohio state court, seeking an additional  approximately
      $4,300,000 in allegedly  improperly  withheld amounts. On August 28, 2001,
      CoreComm  Limited  exercised  its right to remove the state court claim to
      the United States  District  Court for the Northern  District of Ohio, and
      the parties then  stipulated  to a  consolidation  of both of  Ameritech's
      claims in the United States District Court. To consolidate the two claims,
      on October 9, 2001,  Ameritech  filed an amended  complaint  in the United
      States District Court, seeking a total of approximately $14,400,000.

                                      S-15

<PAGE>

                     CoreComm Holdco, Inc. and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 13.  Commitments and Contingent Liabilities (continued)

      On December  26,  2001,  CoreComm  Newco  filed its answer to  Ameritech's
      amended complaint and  simultaneously  filed three  counterclaims  against
      Ameritech  and  some  of its  affiliates,  alleging  breach  of  contract,
      antitrust violations,  and fraudulent or negligent  misrepresentation.  In
      lieu of  filing an answer to  CoreComm  Newco's  counterclaims,  Ameritech
      filed a series of motions on March 25,  2002,  asking the Court to dismiss
      several of CoreComm  Newco's  counterclaims.  On April 17, 2002,  CoreComm
      Newco filed its opposition to Ameritech's requests for dismissal and these
      items are now pending before the court for disposition.

      The Company  believes  that  CoreComm  Newco has  meritorious  defenses to
      Ameritech's amended complaint, and that the amount currently in dispute is
      substantially  less than the  $14,400,000  claimed in Ameritech's  amended
      complaint. For example, the figure specified in Ameritech's complaint does
      not  account  for (a) more than $5.2  million  in refunds  that  Ameritech
      contends it has already  credited to CoreComm  Newco's  accounts since the
      filing its complaint, and (b) payments that were made by CoreComm Newco in
      the ordinary course after the time of Ameritech's submission. However, the
      Company  cannot be certain  how or when the matter will be  resolved.  The
      Company also believes that, to the extent Ameritech  prevails with respect
      to any of its claims,  Ameritech's award may be offset in whole or in part
      by amounts that CoreComm Newco is seeking to obtain from  Ameritech  under
      its counterclaims.  However,  it is impossible at this time to predict the
      outcome of the litigation.

o     On March 7, 2002, CoreComm Massachusetts, Inc. (an operating subsidiary of
      the Company) filed a complaint and request for temporary restraining order
      against Verizon New England d/b/a Verizon Massachusetts seeking to prevent
      Verizon  from  proceeding  with its threat to  implement an embargo on the
      ability of CoreComm Massachusetts to place orders for new services pending
      the  resolution  of a dispute  between the parties over the  legitimacy of
      various  charges  billed by Verizon in that state.  On March 13, 2002, the
      court  denied  CoreComm's  request  for a TRO  and  Verizon  proceeded  to
      implement the threatened  service embargo.  On April 1, 2002 Verizon filed
      an  answer  to  CoreComm's  complaint  along  with  counterclaims  seeking
      approximately  $1.4 million in payment for allegedly past due charges.  On
      April  10,  2002,   CoreComm   Massachusetts  filed  an  answer  to  these
      counterclaims denying the accuracy of Verizon's  contentions.  The Company
      does not believe that the embargo will have a material  adverse  affect on
      its business,  financial condition and/or operating results,  and CoreComm
      Massachusetts intends to defend itself vigorously and pursue all available
      claims and defenses. However, it is impossible at this time to predict the
      outcome of this litigation.

                                      S-16

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 13.  Commitments and Contingent Liabilities (continued)

o     On December 3, 2001, General Electric Capital Corp. filed a lawsuit in the
      Circuit  Court of Cook  County,  Illinois  against  CoreComm  Limited  and
      MegsINet,   Inc.,  an  indirect   subsidiary   of  the  Company,   seeking
      approximately  $8 million in allegedly  past due amounts and the return of
      equipment under a capital  equipment  lease  agreement  between Ascend and
      MegsINet.  GECC is seeking all amounts  allegedly  owed under the lease as
      well  as  repossession  of  the  equipment.  On  February  19,  2002,  the
      defendants  filed a  motion  to  dismiss  several  of  GECC's  claims.  In
      response, GECC withdrew its original complaint and on May 1, 2002 filed an
      amended  complaint,   naming  the  Company  as  an  additional  defendant.
      Defendants'  response to dismiss the amended complaint is presently due on
      June 5,  2002.  Concurrently,  on  April  12,  2002,  GECC  filed a second
      complaint in the Circuit Court of Cook County,  Illinois against MegsINet,
      CoreComm Limited and the Company seeking a court order allowing it to take
      repossession  of its  alleged  equipment.  After a hearing  on the  matter
      following defendants' opposition,  GECC withdrew its complaint and filed a
      new  action  on May 3,  2002,  in an  effort  to  supply  the  court  with
      additional  information  regarding  its alleged  rights to the  equipment.
      Defendant's response to dismiss the May 3 complaint is currently due on or
      before May 23, 2002, and defendants intend to defend themselves vigorously
      against both  complaints and to pursue all available  claims and defenses.
      However,  it is  impossible  at this time to  predict  the  outcome of the
      litigation.

o     On May 25, 2001, KMC Telecom, Inc. and some of its operating  subsidiaries
      filed an  action  in the  Supreme  Court  of New York for New York  County
      against CoreComm  Limited,  Cellular  Communications of Puerto Rico, Inc.,
      CoreComm New York,  Inc. and MegsINet,  Inc. On that same date,  KMC filed
      the same cause of action in the  Circuit  Court of Cook  County,  IL. Upon
      defendant's Motion to Stay the New York action, KMC voluntarily  dismissed
      the  Illinois  litigation  and the matter is currently  proceeding  in New
      York. KMC contends that it is owed approximately $2 million,  primarily in
      respect  of  alleged  early  termination  liabilities,  under  a  services
      agreement and a co-location  agreement with MegsINet.  The defendants have
      denied KMC's  claims and have  asserted  that the  contracts at issue were
      signed without proper authorization,  that KMC failed to perform under the
      alleged contracts, and that the termination penalties are not enforceable.
      The defendants  have served  discovery and intend to defend  themselves in
      coordination  with one of their  insurance  carriers.  On March 27,  2002,
      certain of the  defendants  initiated  litigation  against  several former
      principals of MegsINet seeking  indemnification  and contribution  against
      KMC's claims.

                                      S-17

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

Note 13.  Commitments and Contingent Liabilities (continued)

o     On March 1, 2002,  Easton Telecom  Services,  LLC.,  referred to as Easton
      LLC,  initiated  litigation  in the  Northern  District  of  Ohio  against
      CoreComm Internet Group, Inc. asserting that Easton LLC is the assignee of
      several rights of Easton Telecom  Services,  Inc.,  referred to as Easton,
      Inc., under an asset purchase agreement approved as part of the bankruptcy
      disposition of Teligent, Inc., and demanding payment of approximately $4.9
      million, primarily in respect of alleged early termination penalities, for
      telecommunications  services  purportedly provided under alleged contracts
      between Easton and MegsINet, Inc. Subsequently,  on April 18, 2002, Easton
      filed an amended complaint in the  above-referenced  matter naming Voyager
      Information  Networks,  Inc. as an additional defendant and increasing the
      amount  in  dispute  to  approximately  $5.1  million.  On  May  7,  2002,
      defendants'  filed their  answer  denying  Easton  LLC's  allegations  and
      asserting multiple defenses,  including defenses  challenging the validity
      of the alleged contracts and plaintiff's claim as to alleged damages.  The
      defendants intend to defend themselves vigorously and pursue all available
      claims and defenses. However, it is impossible at this time to predict the
      outcome of this litigation.


                                      S-18

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

Management's  Discussion  and Analysis of Results of  Operations  and  Financial
Condition

Results of Operations

Until  December  2001,  we were a direct,  wholly-owned  subsidiary  of CoreComm
Limited. As a result of prior recapitalization transactions completed as part of
the Holdco recapitalization,  CoreComm Limited currently owns only approximately
13% of our outstanding  common stock. Prior to the completion of the first phase
of the Holdco  recapitalization,  CoreComm  Limited operated the same businesses
that we currently operate.

From 1998 to 2000, we were in the process of building  infrastructure to support
a national roll-out  according to our original business plan. This business plan
required  significant capital to fund capital  expenditures,  operating expenses
and debt service. As a result, we historically experienced substantial operating
and net losses.  In early 2001, we still required  significant funds to complete
our  business  plan as  originally  intended.  However,  adverse  changes in the
capital  markets,   particularly  in  the  telecommunications  sector,  made  it
extremely  difficult  to raise new capital,  and we could no longer  finance our
original  business  plan.  As a result,  in 2001, we  significantly  revised our
business plan to focus on our most profitable  businesses and geographic  areas,
and reduce our operational costs and need for capital.

In 2001,  we  streamlined  our strategy and  operations to focus on our two most
successful   and   promising   lines  of  business.   The  first  is  integrated
communications products and other high bandwidth/data/web-oriented  services for
the business market. The second is bundled local telephony and Internet products
for the residential market, with a focus on using Internet  interfaces,  as well
as our call centers, to efficiently sell, install and service our customers.

We have implemented cost savings through a variety of means,  including facility
consolidation,    efficiency   improvements,   vendor   negotiations,    network
optimization, and headcount reduction. We have reduced network costs and capital
expenditures  by  converting  many of our local access lines to more  profitable
Unbundled  Network Element - Platform pricing from Total Service Resale pricing,
which provides higher margins. In addition, we were able to reduce the number of
facilities  established  without  substantially  affecting  our service  area by
leasing  enhanced  extended  local  loops  from  the  incumbent  local  exchange
carriers.  We have also  improved  our  operating  efficiency  through  improved
pricing terms and the elimination of duplicative or unneeded network facilities.

These  efficiencies  are  reflected in the decrease in our expenses of more than
$140 million on an annualized basis, as shown in the table below:

<TABLE>
<CAPTION>
                                                                              Three Months Ended
                                                                                 (in thousands)
                                                     % Reduction     --------------------------------------
                                                     Q4'00-Q1'02         March 31,         December 31,
                                                     -----------          2002                  2000
                                                                     -----------------     -----------------
<S>                                                      <C>                   <C>                 <C>
       Operating Expenses                                26%                   $48,038             $65,002
       Selling, General and Administrative               42%                    22,313              38,414
       Corporate Expenses                                55%                     1,698               3,759
                                                                     --------------------------------------
           Total                                         33%                   $72,049            $107,175
                                                                     ======================================
</TABLE>

                                      S-19

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

While reducing  expenses in all areas of our business,  we  implemented  new low
cost revenue  initiatives such as launching business  communications  service to
several  markets in the Great Lakes region and  residential  service in the East
using  existing  facilities.  As a result of these  changes,  we are now focused
primarily in the Mid-Atlantic and Mid-West regions of the U.S.

In addition, the recapitalization transactions which were completed in 2001 will
reduce interest  expense and preferred  dividends from an aggregate annual total
of approximately $53.2 million to approximately $12.3 million,  $10.5 million of
which is in cash,  based on interest  rates as of April 13, 2002. As a result of
adjusting   our   assets  to  fair   value  in   conjunction   with  the  Holdco
recapitalization our depreciation and amortization expenses have been reduced.

By the end of 2001, we had completed the  implementation of our revised business
plan.  Going forward,  we will continue to monitor all areas of the business for
additional cost saving and revenue generating opportunities.

Although we continue to engage in efforts to increase our profitability,  we are
also investigating other ways to generate cash for our business.  In April 2001,
as announced by CoreComm Limited, we began evaluating strategic alternatives for
our non-CLEC assets and businesses and have retained advisors for the purpose of
conducting this review.

Three Months Ended March 31, 2002 and 2001

The increase in revenues to  $74,311,000  from  $72,811,000  is due primarily to
customer acquisition, increased pricing and carrier access billing.

Operating  costs  include  direct cost of sales,  network costs and salaries and
related expenses of network personnel.  Operating costs decreased to $48,038,000
from $63,520,000 due to a decrease in costs as a result of the implementation of
our revised business plan.

Selling,  general and  administrative  expenses  decreased to  $22,313,000  from
$30,795,000 due to a decrease in costs as a result of the  implementation of our
revised business plan.

Corporate expenses include the costs of our officers and headquarters staff, the
costs of operating the  headquarters  and costs incurred for strategic  planning
and  evaluation  of business  opportunities.  Corporate  expenses  decreased  to
$1,698,000  from  $2,098,000  due to a  decrease  in costs  as a  result  of the
implementation of our revised business plan.

In  accordance  with APB  Opinion  No.  25,  "Accounting  for  Stock  Issued  to
Employees,"  in April  2000,  we  recorded  a non-cash  compensation  expense of
approximately  $29.0 million and a non-cash  deferred  expense of  approximately
$31.3  million.  From  January 1, 2001 to March 31,  2001,  $3.2  million of the
deferred non-cash  compensation was charged to expense. The remaining portion of
deferred  non-cash  compensation  was  charged  to expense  between  April 1 and
December 31, 2001.

We  incurred  additional  costs  in  connection  with  our  recapitalization  of
$1,182,000 during the three months ended March 31, 2002.

                                      S-20

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

Other  charges of  $119,000  for the three  months  ended March 31, 2001 are for
adjustments relating to our announcement in December 2000 of a reorganization of
certain of our operations.  These charges include additional  employee severance
and related costs of $351,000,  offset by a reversal of the lease exit provision
of $232,000.

At March 31, 2001, we reduced the carrying amount of goodwill related to certain
acquisitions  by  $167,599,000.  In  connection  with  the  reevaluation  of our
business plan and the decision to sell non-CLEC assets and  businesses,  we were
required to report all  long-lived  assets and  identifiable  intangibles  to be
disposed of at the lower of carrying amount or estimated fair value less cost to
sell.  The  carrying  amount  of  goodwill  related  to these  acquisitions  was
eliminated  before  reducing  the  carrying  amounts  of the other  assets.  The
estimated fair value of these businesses was determined based on the information
provided by the  investment  bank retained for the purposes of  conducting  this
sale.

Depreciation  expense  decreased to $8,881,000 from  $12,012,000  primarily as a
result of the reduction in the carrying  value of our fixed assets as determined
by  a  fair  value   analysis   performed   in   conjunction   with  the  Holdco
recapitalization.

Amortization  expense  decreased  to  $1,287,000  from  $31,509,000  due  to the
reduction in the carrying value our of intangible assets as determined by a fair
value analysis performed in conjunction with the Holdco recapitalization as well
as our adoption of SFAS 142 "Goodwill and Intangible Assets" on January 1, 2002,
which  required us to cease  amortizing  goodwill.  Amortization  expense on our
goodwill during the three months ended March 31, 2001 was  $31,369,000.  Our net
loss and our  basic  and  diluted  net loss per  common  share  would  have been
$210,183,000 and $7.36, respectively,  had SFAS 142 been in effect for the first
quarter of 2001.

Interest  expense  decreased to $3,559,000  from  $4,141,000  primarily due to a
reduction in the effective  interest rate on our senior secured credit facility.
The effective  interest rate on our senior  secured credit  facility  during the
three months ended March 31, 2002 and 2001 was 6.86% and 9.11%, respectively.

Recent Accounting Pronouncements

In August 2001, the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  No. 144,  "Accounting  for the  Impairment  or
Disposal  of  Long-Lived  Assets,"  effective  for us on January  1, 2002.  This
statement  supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" and other related accounting
guidance.  The adoption of this new standard  had no  significant  effect on our
results of operations, financial condition or cash flows.

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations,"  effective  for us on January 1, 2003.  This  statement  addresses
financial   accounting  and  reporting  for  obligations   associated  with  the
retirement of tangible fixed assets and the associated asset  retirement  costs.
We are in the  process  of  evaluating  the  financial  statement  impact of the
adoption of SFAS No. 143.

                                      S-21

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

In June 2001,  the FASB issued SFAS No. 141,  "Business  Combinations,"  and No.
142,  "Goodwill  and Other  Intangible  Assets."  SFAS No. 141 requires that the
purchase  method of accounting be used for all business  combinations  initiated
after  June  30,  2001.  Use of the  pooling-of-interests  method  is no  longer
permitted.  SFAS No. 141 also includes  guidance on the initial  recognition and
measurement  of  goodwill  and other  intangible  assets  acquired in a business
combination  that is  completed  after  June 30,  2001.  SFAS  No.  142 ends the
amortization of goodwill and indefinite-lived  intangible assets. Instead, these
assets must be reviewed annually, or more frequently under some conditions,  for
impairment in accordance with this  statement.  This impairment test uses a fair
value  approach  rather  than the  undiscounted  cash flow  approach  previously
required by SFAS No. 121,  "Accounting  for the Impairment of Long-Lived  Assets
and for Long-Lived Assets to Be Disposed Of." We adopted SFAS No. 142 on January
1, 2002.  The  adoption of this new standard  had no  significant  effect on our
results  of   operations,   financial   conditions  or  cash  flows  other  than
amortization of goodwill ceased on January 1, 2002.

Liquidity and Capital Resources

We anticipate that we will have sufficient cash and cash  equivalents on hand to
fund our operations,  capital  expenditures and debt service in 2002. By the end
of  2002,  we  anticipate  that we will  be  generating  enough  cash  from  our
operations,  which is net of cash  interest  expense,  to fund  our  anticipated
capital  expenditures.  However, we anticipate that we and our subsidiaries will
not generate  sufficient  cash from  operations  to repay at maturity the entire
principal  amount of our  outstanding  indebtedness.  We  intend to repay  these
amounts  through  refinancings  of  this  debt,  or  through  other  sources  of
financing.  However,  our ability to raise additional capital in the future will
be  dependent  on a number of factors,  such as our results of  operations,  the
amount of our  indebtedness,  and also general  economic and market  conditions,
which are beyond our control. If we are unable to obtain additional financing or
to obtain it on  favorable  terms,  we may be  required  to  further  reduce our
operations,  forego  attractive  business  opportunities,  or take other actions
which could adversely  affect our business,  results of operations and financial
condition.

As of March 31, 2002, we had debt,  which  consists of a $156.1  million  senior
secured  credit  facility,  approximately  $16.6 million in principal  amount of
10.75% Unsecured  Convertible PIK Notes due 2011, and approximately $9.7 million
of capital leases.  Debt service on the senior secured credit facility  includes
approximately  $10.5  million in  interest  expense in each of 2002 and 2003 and
$10.2 million in 2004, on an annualized basis, based on the interest rates as of
April 13, 2002, as well as quarterly amortization and principal reductions which
total $0 in 2002,  $1,950,000  in 2003,  and  $9,750,000  in 2004.  We have made
interest  payments of  approximately  $2.7 million for our senior secured credit
facility  during the three  months ended March 31,  2002.  The 10.75%  Unsecured
Convertible PIK Notes due 2011 have no cash interest  payments,  and are not due
until 2011.  Our capital  leases have $9.4  million due during the  remainder of
2002,  and  $0.3  million  due  for  the  remainder  of  their  terms.  However,
approximately  $8.3  million  of these  capital  leases are  obligations  of our
subsidiary, MegsINet, Inc. and are not obligations of CoreComm Holdco. MegsINet,
Inc. is currently in settlement discussions with the holders of these leases. In
addition,  at March 31, 2002, our current  liabilities exceed our current assets
by approximately $88 million.

                                      S-22

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

We  still  have  significant   expected  capital  expenditures  even  after  the
implementation  of our modified  business plan. Under our revised business plan,
capital  expenditures have been significantly  reduced from prior levels.  Total
actual capital expenditures for the three months ended March 31, 2002, described
as  cash  used to  purchase  fixed  assets  in our  cash  flow  statement,  were
approximately $2.4 million. According to our current plans, capital expenditures
are expected to be approximately $7.4 million for the remainder of 2002 and $9.5
million and $14.2 million in 2003 and 2004,  respectively.  These future capital
expenditures  will depend on a number of factors  relating to our  business,  in
particular the growth level,  geographic  location and services  provided to new
customers  added during these years.  Capital  expenditures in future years will
also  depend on the  availability  of capital  and the  amount of cash,  if any,
generated  by  operations,  which may impact our capital  decisions  relating to
initiatives such as, for example,  network  expansion and the  implementation of
upgrades to our information services platforms.

In the first quarter of 2002, net cash provided by operations was  approximately
$4.5  million.  This  represents  an  improvement  in cash  from  operations  of
approximately  $92  million  on an  annualized  basis as  compared  to the first
quarter of 2001.  Continued  execution of our business plan,  including  revenue
growth in more profitable areas and continued expense reduction, are expected to
continue to improve our  financial  results.  An inability to generate cash from
operations and/or raise additional  financing may effect our ability to meet our
cash  requirements,  which may have an adverse affect on us, and potentially our
viability as an ongoing business.

In addition, we are a holding company with no significant assets other than cash
and securities and  investments in, and advances to, our  subsidiaries.  We are,
therefore, likely to be dependent upon receipt of funds from our subsidiaries to
meet our own obligations. However, our subsidiaries' debt agreements prevent the
payment of  dividends,  loans or other  distributions  to us,  except in limited
circumstances.  However,  the limited  permitted  circumstances of distributions
from our subsidiaries  may be sufficient for our operations,  because nearly all
of the uses of funds described above are cash requirements of our subsidiaries.

Depending  upon the success of the  execution of our business  plan,  additional
capital  raising may not be necessary in the  foreseeable  future.  However,  we
cannot assure you that:

     (a) we will be able to refinance our indebtedness as it comes due;

     (b) actual costs will not exceed the amounts estimated in our business plan
     or that additional funding will not be required;

     (c) we and our subsidiaries  will be able to generate  sufficient cash from
     operations to meet capital requirements, debt service and other obligations
     when required;

     (d) we will be able to access this cash flow;

                                      S-23

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

     (e) we will be able to sell  assets or  businesses,  75% or more of the net
     proceeds from a sale may be required to be used to repay indebtedness; or

     (f) we will not be adversely affected by interest rate fluctuations.

We anticipate  that we and our  subsidiaries  will not generate  sufficient cash
from  operations  to  repay at  maturity  the  entire  principal  amount  of our
outstanding indebtedness.  Accordingly,  we may be required to consider a number
of measures,  including:  (a) refinancing all or a portion of this indebtedness,
(b)  seeking  modifications  to the  terms  of this  indebtedness,  (c)  seeking
additional debt financing,  which may be subject to obtaining  necessary  lender
consents,  (d) seeking additional equity financing,  or (e) a combination of the
foregoing. We are currently in compliance with all required ratios and covenants
contained in agreements governing our outstanding indebtedness.

The  following  table shows our aggregate  cash  interest  expense and principal
payments  on  our  existing  long  term  debt,   anticipated  estimated  capital
expenditures,  payments on capital leases and other debt, as well as the sources
of funds that we expect to use to meet these cash requirements through 2004.

<TABLE>
<CAPTION>
                            Nine Months Ended
                               December 31,
                                   2002             2003       2004     Source of Funds
                                   ----             ----       ----     ---------------
                                                  (in millions)
<S>                                <C>                     <C>        <C>        <C>
Cash Interest Expense on           $7.8             $10.5      $10.2      Cash  and cash  equivalents  on hand and cash
existing Long-term debt (1)                                               from operations
Estimated  Capital   Expenditures   7.4              9.5        14.2      Cash  and cash  equivalents  on hand and cash
(2)                                                                       from operations
Principal  Payments  on  existing    -               1.95       9.75      For 2002 and 2003, Cash and cash  equivalents
Long-term debt (3)                                                        on hand and cash from operations;
                                                                          For 2004, cash and cash equivalents on hand,
                                                                          cash from operations, and, if required,
                                                                          refinancing sources or other sources of
                                                                          financing (4).

Payments on Capital Leases          9.4              0.3         -        Approximately  $8.3 million of these  capital
                                                                          leases  are  obligations  of our  subsidiary,
                                                                          MegsINet,  Inc.  and are not  obligations  of
                                                                          CoreComm    Holdco.    MegsINet,    Inc.   is
                                                                          currently in settlement  discussions with the
                                                                          holders of these leases (5);

                                                                          For the  remaining  amounts,  cash  and  cash
                                                                          equivalents on hand and cash from operations
                                   --------------------------------------
                                   $24.6            $22.25     $34.15
                                   ======================================
<FN>

 (1)   The only long term debt of ours that requires  cash  interest  expense is
       our $156.1 million senior  secured  credit  facility.  The amounts in the
       table are based on our current interest rate of 6.75%, which is in effect
       through October 12, 2002, and assume principal  reductions as required in
       the facility.

                                      S-24

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

 (2)   Future capital  expenditures  will depend on a number of factors relating
       to our business, in particular the growth level,  geographic location and
       services provided to new customers added during these years.
 (3)   Principal  payments  indicated are amortization and principal  reductions
       under our senior secured credit facility.
 (4)   Refinancing sources may include, for example, a new bank facility used to
       repay these  amounts;  other  sources of  financing  may include  capital
       raised through new debt or equity financing or asset sales.  There can be
       no assurance that we will be able to refinance our  indebtedness or raise
       the required funds.
 (5)   Approximately $8 million of the capital lease obligations of MegsINet,
       Inc. are the subject of current litigation.
</FN>
</TABLE>

Although we believe that our plans,  intentions and expectations as reflected in
or suggested by these  forward-looking  statements are reasonable as of the date
of this  prospectus,  we can give no assurance  that our plans,  intentions  and
expectations will be achieved in a timely manner if at all.

Our  outstanding  indebtedness  is described in further detail in the subsequent
paragraphs:

In April  2001,  CoreComm  Limited  entered  into a $156.1  million  Amended and
Restated Credit Agreement with The Chase Manhattan Bank that amends and restates
the term loan  facility and revolving  credit  facility that closed in September
2000. As of January 25, 2002,  there was $106.1  million  outstanding  under the
term loan facility and $50.0  million  outstanding  under the  revolving  credit
facility.  The term loan  facility will  amortize in quarterly  installments  of
principal commencing on December 31, 2003 with a final maturity on September 22,
2008. The revolving  credit  facility  shall be  automatically  and  permanently
reduced in increasing quarterly installments of principal commencing on December
31, 2003 with a termination  date on September 22, 2008.  Total annual principal
payments  are as follows:  $1,950,000  (2003);  $9,750,000  (2004);  $23,550,000
(2005);  $50,700,000  (2006);  $39,000,000 (2007) and $29,350,000 (2008). In the
event that any of the remaining  approximately $4.75 million in principal amount
of public  notes not owned by us have not been  converted  or  refinanced  on or
prior to April 1, 2006,  then the facilities  become payable in full on April 1,
2006. The interest rate on both the term loan facility and the revolving  credit
facility is, at our option,  either 3.5% per annum plus the base rate,  which is
the higher of the prime rate or the federal funds  effective  rate plus 0.5% per
annum,  or the  reserve-adjusted  London  Interbank  Offered  Rate plus 4.5% per
annum.  Beginning  October 12, 2001 and ending April 12, 2002, the interest rate
was 6.86%.  Beginning  April 13, 2002 and ending  October 12, 2002, the interest
rate is 6.75%. Interest is payable at least quarterly. The commitment fee on the
unused portion of the commitments is 1.25% per annum payable quarterly,  subject
to  reduction  to 1%  per  annum  based  upon  the  amount  borrowed  under  the
facilities.

                                      S-25

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

In April 2001, we and CoreComm Limited issued, as joint and several obligors, to
NTL  Incorporated a convertible  note in the aggregate  principal  amount of $15
million.  This note will  mature in April  2011.  Interest  on the note is at an
annual rate of 10.75%  payable  semiannually  on October 15 and April 15 of each
year,  commencing  October  15,  2001.  The  interest  is payable in kind by the
issuance of additional unsecured  convertible notes in principal amount equal to
the interest  payment that is then due.  Additional  unsecured  convertible  PIK
notes,  dated October 15, 2001 and April 15, 2002,  were issued in the principal
amount of  approximately  $0.8  million and $0.9  million,  respectively,  as an
interest payment.  The additional notes issued for interest will have an initial
conversion  price equal to the greater of $1.00 and 120% of the weighted average
closing price of CoreComm Limited common stock for a specified period. The April
2001 note and the October 2001 note are each  convertible  into CoreComm Limited
common stock prior to maturity at a conversion price of $1.00 per share, subject
to  adjustment.  However,  NTL,  which is the holder of these notes entered into
letter agreements  relating to the conversion  feature of these notes and of the
additional  notes issued under these notes,  following the  acceptance of shares
under the exchange offer for CoreComm Limited common stock. Through those letter
agreements,  consistent  with the original  terms of the notes,  we and CoreComm
Limited have agreed to exercise  our right under these notes so that,  following
our accepting  shares of CoreComm  Limited common stock in the exchange  offers,
the  convertibility  feature of these  notes will be altered so that rather than
the notes being  convertible into shares of CoreComm Limited common stock,  they
will become  convertible  into  shares of our common  stock.  At that time,  the
conversion  prices of these notes will be  equitably  adjusted  by applying  the
exchange  ratio in the exchange offer for CoreComm  Limited common stock,  which
results in a new  conversion  price of $38.90 per share of our common  stock for
each of these notes. NTL has agreed not to exercise its rights to convert any of
these notes into CoreComm Limited common stock until August 5, 2002, unless that
right has  previously  ceased as  described  above.  In the event that we do not
accept  shares of CoreComm  Limited  common  stock in the exchange  offers,  the
conversion  feature of these notes would  remain into  CoreComm  Limited  common
stock.  These notes are redeemable,  in whole or in part, at our option,  at any
time after April 12,  2003,  at a  redemption  price of 103.429%  that  declines
annually to 100% in April 2007,  in each case  together  with accrued and unpaid
interest to the redemption date.

In October 1999, CoreComm Limited issued $175 million principal amount of public
notes, and received net proceeds of $168.5 million.  In April 2001,  $10,250,000
aggregate  principal  amount of these  notes was  converted  into  approximately
374,000  shares  of  CoreComm  Limited's  common  stock.  As part of the  Holdco
recapitalization,  on December 17, 2001,  $160 million  principal  amount of the
public notes were exchanged for 1,456,806  common shares of our common stock and
the payment of the October 2001 interest payment of approximately  $4.8 million.
The exchange offer for the public notes is our attempt to exchange the remaining
$4.75  million  principal  amount  of the  public  notes  not owned by us for an
aggregate amount of approximately 43,248 shares of our common stock and $142,500
in cash.

                                      S-26

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

Holdco Recapitalization

In 2001,  CoreComm  Limited  entered into  agreements with holders of its public
notes whereby the holders agreed,  to exchange their notes as part of the Holdco
recapitalization. The exchange for $160 million principal amount of public notes
was completed in December 2001,  including the payment of the approximately $4.8
million by CoreComm Limited.

On December  28, 2001,  we completed  the exchange of shares of our common stock
for  substantial  amounts of the outstanding  indebtedness of CoreComm  Limited,
substantial amounts of our outstanding indebtedness as co-obligors with CoreComm
Limited and all of the  outstanding  preferred stock of CoreComm  Limited.  This
exchange was completed under an exchange agreement with CoreComm Limited and

     (1)  holders of 10.75% Unsecured  Convertible PIK Notes due 2011 and 10.75%
          Senior  Unsecured  Convertible PIK Notes due 2010,  which were a joint
          obligation  of CoreComm  Holdco and CoreComm  Limited,  in the initial
          principal amounts of $10,000,000 and $16,100,000,

     (2)  the  holders  of Senior  Unsecured  Notes due  September  29,  2003 of
          CoreComm Limited in the principal amount of $105.7 million, and

     (3)  the holders of all of the preferred  stock of CoreComm  Limited,  with
          respect to the initial liquidation preference of $301 million.

In  December  2001,  in  connection  with the  Holdco  recapitalization,  we and
CoreComm  Limited  were  granted an  exception  by Nasdaq,  absent  which we and
CoreComm  Limited  would have had to obtain  stockholder  approval  prior to the
completion   of  the  Holdco   recapitalization.   Accordingly,   following  the
consummation of the merger, we anticipate,  based on conversations  with Nasdaq,
that we will  become  the  Nasdaq  listed  entity  and  will be  subject  to the
continued  inclusion  requirements of the Nasdaq National Market.  If we fail to
meet the continued inclusion  requirements,  we believe that not being listed on
the Nasdaq National Market would have an adverse effect on the trading prices of
our  common  stock and would  adversely  affect the  liquidity  of the shares of
common stock held by our stockholders.  In addition,  not being listed may cause
future financing to be more difficult, more expensive or both.

Contractual Obligations and Commercial Commitments

On January 22, 2002,  the  Securities  and  Exchange  Commission  issued  FR-61,
Commission  Statement  about  Management's  Discussion and Analysis of Financial
Condition  and  Results of  Operations.  The  release  sets  forth  views of the
Securities  and  Exchange  Commission   regarding   disclosure  that  should  be
considered  by   registrants.   Our   contractual   obligations  and  commercial
commitments are summarized below.

                                      S-27

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

The  following  table  includes  aggregate  information  about  our  contractual
obligations as of March 31, 2002 and the periods in which payments are due:

<TABLE>
<CAPTION>
                                                               Payments Due by Period
Contractual                                         Less than 1           1-3              4-5         After 5
Obligations                          Total             Year              Years            Years         Years
-----------                          -----             ----              -----            -----         -----
                                                                   (in thousands)
<S>            <C>                    <C>              <C>             <C>               <C>           <C>
Long-Term Debt (1)                    $172,699         $     -         $15,600           $81,900       $75,199
Capital Lease Obligations                9,670           9,426             244                 -             -
Operating Leases                        29,490           7,477          10,684             6,738         4,591
Unconditional Purchase
   Obligations                            none               -               -                 -             -
Other Long-Term
   Obligations                            none               -               -                 -             -
                                 ------------------------------------------------------------------------------
Total Contractual
   Cash Obligations                   $211,859         $16,903         $26,528           $88,638       $79,790
                                 ==============================================================================
<FN>
(1)   Long-term  debt  includes  the senior  secured  credit  facility  of  $156,100,000  and the 10.75%  Unsecured
      Convertible PIK Notes due April 2011 of $16,599,000 including accrued PIK interest.
</FN>
</TABLE>

The  following  table  includes  aggregate   information  about  our  commercial
commitments as of March 31, 2002. Commercial commitments are items that we could
be obligated  to pay in the future.  They are not required to be included in the
consolidated balance sheet.

<TABLE>
<CAPTION>
                                                                     Amount of Commitment
                                                                     Expiration Per Period
         Other
       Commercial                 Total Amounts       Less than 1           1 - 3              4 - 5            Over 5
      Commitments                   Committed            Year               years              years            years
      -----------                   ---------            ----               -----              -----            -----
                                                                       (in thousands)
<S>                                 <C>               <C>                 <C>                  <C>             <C>
Guarantees                            none                 $-                  -                  -               -
Lines of Credit                       none                  -                  -                  -               -
Standby Letters
of Credit                             none                  -                  -                  -               -
Standby Repurchase
Obligations                           none                  -                  -                  -               -
Other Commercial
Commitments                         $5,700             $5,700                  -                  -               -
                         -------------------------------------------------------------------------------------------
Total Commercial
Commitments                         $5,700             $5,700                  -                  -               -
                         ===========================================================================================
</TABLE>

                                      S-28
<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries

Consolidated Statement of Cash Flows

For the three months ended March 31, 2002, cash provided by operating activities
was $4,544,000 in comparison to cash used in operating activities of $18,555,000
for the three months ended March 31, 2001.  The change in cash flow is primarily
due to the implementation of our revised business plan.

For the three months ended March 31,  2002,  cash used to purchase  fixed assets
increased to $2,405,000  from $530,000 in the three months ended March 31, 2001,
which reflects increased  purchases of operating equipment to improve and expand
our network.

Proceeds from  borrowings,  net of financing  costs,  of $9,736,000 was from the
borrowings under the senior secured credit facility in January 2001.


                                      S-29

<PAGE>
                     CoreComm Holdco, Inc. and Subsidiaries


           Quantitative and Qualitative Disclosures about Market Risk

The SEC's rule related to market risk  disclosure  requires that we describe and
quantify  our   potential   losses  from  market  risk   sensitive   instruments
attributable  to  reasonably  possible  market  changes.  Market risk  sensitive
instruments  include all financial or commodity  instruments and other financial
instruments,  such as investments and debt, that are sensitive to future changes
in interest rates,  currency  exchange rates,  commodity  prices or other market
factors.  We are not exposed to market  risks from  changes in foreign  currency
exchange  rates  or  commodity  prices.  We do  not  hold  derivative  financial
instruments nor do we hold securities for trading or speculative purposes. Under
our current  policies,  we do not use interest rate  derivative  instruments  to
manage our exposure to interest rate changes.

The fair  market  value of  long-term  fixed  interest  rate debt is  subject to
interest rate risk.  Generally the fair market value of fixed interest rate debt
will increase as interest  rates fall and decrease as interest  rates rise.  The
carrying amount of the variable rate senior secured credit facility approximates
the fair value.  The fair value of our other notes payable are  estimated  using
discounted cash flow analyses,  based on our current incremental borrowing rates
for similar types of borrowing arrangements.

                                             Interest Rate Sensitivity
                                               As of March 31, 2002
                                       Principal Amount by Expected Maturity
                                               Average Interest Rate
                                                  (in thousands)

<TABLE>
<CAPTION>
                          For the
                            Nine
                           Months
                           Ending                     For the Years Ending December 31,                             Fair Value
                        December 31,  --------------------------------------------------------------               ------------
                            2002         2003         2004         2005         2006     Thereafter     Total        3/31/02
                        --------------------------------------------------------------------------------------------------------
<S>                         <C>       <C>         <C>           <C>          <C>         <C>           <C>           <C>
Long-term debt,
  including current
  Portion
Fixed rate                  $ -       $   -       $    -        $     -      $      -    $ 16,599      $ 16,599      $ 16,599
Average interest rate                                                                    10.75%
Fixed rate                  $ -       $   1,950   $  9,750      $  25,350    $   50,700  $ 68,350      $ 156,100     $156,100
Average interest rate                 Libor +     Libor      +  Libor     +  Libor +     Libor     +
                                      4.5%  or    4.5%      or  4.5%     or  4.5%  or    4.5%     or
                                      base rate   base rate     base rate    base rate   base rate
                                      + 3.5%           + 3.5%   + 3.5%          + 3.5%      + 3.5%
</TABLE>


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