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SECURITIES AND
EXCHANGE COMMISSIONWASHINGTON, D.C. 20549




FORM 10-Q





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

FOR THE QUARTERLY PERIOD
ENDED DECEMBER 31, 2005

OR

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

COMMISSION FILE NO.
1-14168

GLOBIX CORPORATION(EXACT NAME OF
REGISTRANT AS SPECIFIED IN ITS CHARTER)

|                                                                                  |  |                                       
|--------------------------------------------------------------------------------- |  | --------------------------------------
|DELAWARE                                                                          |  | 13-3781263                            
|(STATE OR OTHER
  JURISDICTION OF
  INCORPORATION OR ORGANIZATION)                |  | (I.R.S. EMPLOYER
  IDENTIFICATION NO.)
|                                                                                  |  |                                       
|139 CENTRE STREET, NEW
  YORK, NEW YORK(ADDRESS OF PRINCIPAL EXECUTIVE
  OFFICES) |  | 10013(ZIP CODE)                       

REGISTRANTS TELEPHONE
NUMBER, INCLUDING AREA CODE: (212) 334-8500

Indicate
by check mark whether 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 o

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

Large
  accelerated filer  o   Accelerated
  filer   x   Non-accelerated
  filer   o

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

Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities and Exchange
Act of 1934 subsequent to the distribution of securities under a plan confirmed
by a court.
 Yes x  No o

Number
of shares of the Registrants common stock outstanding as of February 9, 2006
was 48,697,465.

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GLOBIX CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

|                 |                                                                                                                                                                                                |  |      
|---------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----
|                 |                                                                                                                                                                                                |  | PAGE 
|                 |                                                                                                                                                                                                |  |      
|Part I           | Financial
        Information                                                                                                                                                                  |  |      
|Item
        1   | Consolidated
        Balance Sheets -- As of December 31, 2005 (unaudited) and September 30,
        2005                                                                                      |  | 1    
|                 | Interim
        Consolidated Statements of Operations -- For the Three Months Ended December
        31, 2005 (unaudited) and for the Three Months Ended December 31, 2004
        (unaudited) |  | 2    
|                 | Interim
        Consolidated Statements of Cash-Flows -- For the Three Months Ended December
        31, 2005 (unaudited) and for the Three Months Ended December 31, 2004
        (unaudited) |  | 3    
|                 | Notes
        to the Interim Unaudited Consolidated Financial Statements                                                                                                                       |  | 5    
|Item
        2   | Managements Discussion and Analysis of Financial Condition
        and Results of Operations                                                                                                  |  | 10   
|Item
        3   | Quantitative
        and Qualitative Disclosures About Market Risk                                                                                                                             |  | 17   
|Item
        4   | Controls
        and Procedures                                                                                                                                                                |  | 17   
|                 |                                                                                                                                                                                                |  |      
|Part II          | Other
        Information                                                                                                                                                                      |  |      
|Item
        1.  | Legal
        Proceedings                                                                                                                                                                      |  | 18   
|Item
        1A. | Risk
        Factors                                                                                                                                                                           |  | 18   
|Item
        2.  | Unregistered
        Sales of Equity Securities and Use of Proceeds                                                                                                                            |  | 18   
|Item
        3.  | Defaults
        Upon Senior Securities                                                                                                                                                        |  | 18   
|Item
        4.  | Submission
        of Matters to a Vote of Security Holders                                                                                                                                    |  | 18   
|Item
        5.  | Other
        Information                                                                                                                                                                      |  | 18   
|Item
        6.  | Exhibits                                                                                                                                                                                       |  | 18   
|Signatures       |                                                                                                                                                                                                |  | 19   
|Certifications   |                                                                                                                                                                                                |  | 20-23

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GLOBIX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS 
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

|                                                                                                                               |  |                     |          |                      |   |          |  
|------------------------------------------------------------------------------------------------------------------------------ |  | ------------------- | -------- | -------------------- | - | -------- | -
|                                                                                                                               |  | DECEMBER 31,
  2005 |          | SEPTEMBER 30,
  2005 |  
|                                                                                                                               |  |                     |          |                      |  
|                                                                                                                               |  | (Unaudited)         |          |                      |   |         
|                                                                                                                               |  |                     |          |                      |   |         
|ASSETS                                                                                                                         |  |                     |          |                      |   |          |  
|Current assets:                                                                                                                |  |                     |          |                      |   |          |  
|Cash and cash equivalents                                                                                                      |  | $                   | 8,931    |                      | $ | 9,011    |  
|Short-term investments                                                                                                         |  |                     | 76       |                      |   | 65       |  
|Accounts receivable,
        net of allowance for doubtful accounts of $1,854 and $1,950, respectively                         |  |                     | 14,187   |                      |   | 11,174   |  
|Prepaid expenses and other current
  assets                                                                                    |  |                     | 4,514    |                      |   | 4,007    |  
|Restricted cash                                                                                                                |  |                     | 2,379    |                      |   | 2,559    |  
|                                                                                                                               |  |                     |          |                      |   |          |  
|Total current assets                                                                                                           |  |                     | 30,087   |                      |   | 26,816   |  
|Investments, restricted                                                                                                        |  |                     | 9,761    |                      |   | 9,810    |  
|Property, plant and equipment, net                                                                                             |  |                     | 204,834  |                      |   | 206,230  |  
|Intangible assets, net of
  accumulated amortization of $4,131 and $5,598, respectively                                        |  |                     | 9,813    |                      |   | 10,257   |  
|Other assets                                                                                                                   |  |                     | 4,310    |                      |   | 4,540    |  
|                                                                                                                               |  |                     |          |                      |   |          |  
|Total assets                                                                                                                   |  | $                   | 258,805  |                      | $ | 257,653  |  
|                                                                                                                               |  |                     |          |                      |   |          |  
|                                                                                                                               |  |                     |          |                      |   |          |  
|LIABILITIES AND STOCKHOLDERS
  EQUITY                                                                                         |  |                     |          |                      |   |          |  
|Current liabilities:                                                                                                           |  |                     |          |                      |   |          |  
|Current portion of capital lease
  obligation and mortgage payable                                                             |  | $                   | 503      |                      | $ | 564      |  
|Accounts payable                                                                                                               |  |                     | 10,852   |                      |   | 11,769   |  
|Accrued liabilities                                                                                                            |  |                     | 18,772   |                      |   | 17,418   |  
|Current portion of deferred revenue                                                                                            |  |                     | 5,460    |                      |   | 5,443    |  
|                                                                                                                               |  |                     |          |                      |   |          |  
|Total current
liabilities                                                                                                      |  |                     | 35,587   |                      |   | 35,194   |  
|Capital lease obligations, net of
  current portion                                                                            |  |                     | 175      |                      |   | 204      |  
|Mortgage payable                                                                                                               |  |                     | 19,180   |                      |   | 19,270   |  
|11% Senior Notes                                                                                                               |  |                     | 67,455   |                      |   | 67,455   |  
|9% Senior Notes                                                                                                                |  |                     | 5,000    |                      |   |         |  
|Accrued interest - 11% Senior Notes                                                                                            |  |                     | 4,981    |                      |   | 3,110    |  
|Deferred Revenue                                                                                                               |  |                     | 14,992   |                      |   | 15,903   |  
|Other long term liabilities                                                                                                    |  |                     | 8,987    |                      |   | 9,208    |  
|                                                                                                                               |  |                     |          |                      |   |          |  
|Total liabilities                                                                                                              |  |                     | 156,357  |                      |   | 150,344  |  
|                                                                                                                               |  |                     |          |                      |   |          |  
|Cumulative Convertible Preferred
  Stock                                                                                       |  |                     | 13,170   |                      |   | 13,006   |  
|                                                                                                                               |  |                     |          |                      |   |          |  
|Commitments and contingencies                                                                                                  |  |                     |          |                      |   |          |  
|                                                                                                                               |  |                     |          |                      |   |          |  
|STOCKHOLDERS EQUITY:                                                                                                          |  |                     |          |                      |   |          |  
|Common stock, $.01 par value;
  500,000,000 shares authorized; 48,697,465 issued and outstanding, for both
  periods presented |  |                     | 487      |                      |   | 487      |  
|Additional paid-in capital                                                                                                     |  |                     | 209,066  |                      |   | 207,314  |  
|Accumulated other comprehensive
  income                                                                                       |  |                     | 4,630    |                      |   | 5,197    |  
|Accumulated deficit                                                                                                            |  |                     | (124,905 | )                    |   | (118,695 | )
|                                                                                                                               |  |                     |          |                      |   |          |  
|Total stockholders
equity                                                                                                     |  |                     | 89,278   |                      |   | 94,303   |  
|                                                                                                                               |  |                     |          |                      |   |          |  
|Total liabilities and
stockholders
  equity                                                                                   |  | $                   | 258,805  |                      | $ | 257,653  |  
|                                                                                                                               |  |                     |          |                      |   |          |  

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

1

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GLOBIX CORPORATION AND SUBSIDIARIES INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS 
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)

|                                                                       |  |                              |            |                     |   |            |  
|---------------------------------------------------------------------- |  | ---------------------------- | ---------- | ------------------- | - | ---------- | -
|                                                                       |  | FOR THE THREE
  MONTHS ENDED |           
|                                                                       |  |                              |           
|                                                                       |  | DECEMBER 31,
  2005          |            | DECEMBER 31,
  2004 |  
|                                                                       |  |                              |            |                     |  
|Revenue, net                                                           |  | $                            | 31,688     |                     | $ | 16,530     |  
|Operating costs and expenses:                                          |  |                              |            |                     |   |            |  
|Cost of revenue (excluding
  depreciation and amortization)            |  |                              | 17,354     |                     |   | 9,699      |  
|Selling, general and
administrative                                    |  |                              | 12,299     |                     |   | 7,303      |  
|Depreciation and
amortization                                          |  |                              | 5,817      |                     |   | 3,543      |  
|                                                                       |  |                              |            |                     |   |            |  
|                                                                       |  |                              |            |                     |   |            |  
|Total operating costs and
expenses                                     |  |                              | 35,470     |                     |   | 20,545     |  
|                                                                       |  |                              |            |                     |   |            |  
|Loss from operations                                                   |  |                              | (3,782     | )                   |   | (4,015     | )
|Interest and financing
expense                                         |  |                              | (2,504     | )                   |   | (2,487     | )
|Interest income                                                        |  |                              | 83         |                     |   | 127        |  
|Other (expense) income,
net                                            |  |                              | 157        |                     |   | 110        |  
|                                                                       |  |                              |            |                     |   |            |  
|                                                                       |  |                              |            |                     |   |            |  
|Net loss                                                               |  |                              | (6,046     | )                   |   | (6,265     | )
|                                                                       |  |                              |            |                     |   |            |  
|Dividends and accretion on
  preferred stock                           |  |                              | 164        |                     |   |           |  
|                                                                       |  |                              |            |                     |   |            |  
|                                                                       |  |                              |            |                     |   |            |  
|Net loss attributable to common
  stockholders                         |  | $                            | (6,210     | )                   | $ | (6,265     | )
|                                                                       |  |                              |            |                     |   |            |  
|                                                                       |  |                              |            |                     |   |            |  
|Basic and diluted loss per share
  attributable to common stockholders |  | $                            | (0.13      | )                   | $ | (0.38      | )
|                                                                       |  |                              |            |                     |   |            |  
|                                                                       |  |                              |            |                     |   |            |  
|Weighted average common shares
  outstanding - basic and diluted       |  |                              | 48,697,465 |                     |   | 16,460,000 |  
|                                                                       |  |                              |            |                     |   |            |  

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

2

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GLOBIX CORPORATION AND SUBSIDIARIES INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS 
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)(UNAUDITED)

|                                                                            |  |                                    |        |                                   |   |        |  
|--------------------------------------------------------------------------- |  | ---------------------------------- | ------ | --------------------------------- | - | ------ | -
|                                                                            |  | FOR THE
        THREE MONTHS ENDED |       
|                                                                            |  |                                    |       
|                                                                            |  | DECEMBER
        31,
        2005  |        | DECEMBER
        31,
        2004 |  
|                                                                            |  |                                    |        |                                   |  
|Cash Flows From Operating
        Activities                                |  |                                    |        |                                   |   |        |  
|Net Loss                                                                    |  | $                                  | (6,046 | )                                 | $ | (6,265 | )
|Operating activities:                                                       |  |                                    |        |                                   |   |        |  
|Depreciation
        and amortization                                       |  |                                    | 5,817  |                                   |   | 3,543  |  
|Provision
        for uncollectible receivables                             |  |                                    | 255    |                                   |   | 4      |  
|Amortization
        of deferred compensation                               |  |                                    |       |                                   |   | 23     |  
|Stock-based
        compensation                                            |  |                                    | 1,656  |                                   |   |       |  
|Amortization
        of warrants                                            |  |                                    | 96     |                                   |   |       |  
|Changes in assets and liabilities (net
        of acquisition):             |  |                                    |        |                                   |   |        |  
|Decrease
        (increase) in accounts receivable                          |  |                                    | (3,361 | )                                 |   | (1,161 | )
|Decrease
        (increase) in prepaid expenses and other current assets    |  |                                    | (538   | )                                 |   | 354    |  
|Decrease
        (increase) in other assets                                 |  |                                    | 230    |                                   |   | (68    | )
|Increase
        (decrease) in accounts payable                             |  |                                    | (862   | )                                 |   | (1,124 | )
|Increase
        (decrease) in accrued liabilities                          |  |                                    | 1,487  |                                   |   | 204    |  
|Increase
        in accrued interest                                        |  |                                    | 1,871  |                                   |   | 2,002  |  
|Other                                                                       |  |                                    | (1,046 | )                                 |   | (156   | )
|                                                                            |  |                                    |        |                                   |   |        |  
|                                                                            |  |                                    |        |                                   |   |        |  
|Net Cash Used in Operating Activities                                       |  |                                    | (441   | )                                 |   | (2,644 | )
|                                                                            |  |                                    |        |                                   |   |        |  
|                                                                            |  |                                    |        |                                   |   |        |  
|Cash Flows From Investing
        Activities                                |  |                                    |        |                                   |   |        |  
|Proceeds
        from (investments in) short-term and long-term investments |  |                                    |       |                                   |   | 936    |  
|Proceeds
        from restricted cash and investments                       |  |                                    | 175    |                                   |   | 390    |  
|Proceeds
        from fiber optic exchange                                  |  |                                    | 1,960  |                                   |   |       |  
|Deferred
        acquisition cost                                           |  |                                    |       |                                   |   | (42    | )
|Purchase
        of property, plant and equipment                           |  |                                    | (6,528 | )                                 |   | (1,606 | )
|                                                                            |  |                                    |        |                                   |   |        |  
|                                                                            |  |                                    |        |                                   |   |        |  
|Net Cash Used in Investing
        Activities                               |  |                                    | (4,393 | )                                 |   | (322   | )
|                                                                            |  |                                    |        |                                   |   |        |  
|                                                                            |  |                                    |        |                                   |   |        |  
|Cash Flows From Financing Activities                                        |  |                                    |        |                                   |   |        |  
|Issuance
        of 9% Senior Notes                                         |  |                                    | 5,000  |                                   |   |       |  
|Repayment
        of mortgage payable and capital lease obligation          |  |                                    | (178   | )                                 |   | (138   | )
|                                                                            |  |                                    |        |                                   |   |        |  
|                                                                            |  |                                    |        |                                   |   |        |  
|Net Cash Provided by (Used in) Financing
        Activities                 |  |                                    | 4,822  |                                   |   | (138   | )
|                                                                            |  |                                    |        |                                   |   |        |  
|                                                                            |  |                                    |        |                                   |   |        |  
|Effect of Exchange Rates
        Changes on Cash and Cash Equivalents       |  |                                    | (68    | )                                 |   | 362    |  
|                                                                            |  |                                    |        |                                   |   |        |  
|                                                                            |  |                                    |        |                                   |   |        |  
|Decrease in Cash and Cash Equivalents                                       |  |                                    | (80    | )                                 |   | (2,742 | )
|Cash and Cash Equivalents,
        Beginning of Period                      |  |                                    | 9,011  |                                   |   | 12,075 |  
|                                                                            |  |                                    |        |                                   |   |        |  
|                                                                            |  |                                    |        |                                   |   |        |  
|Cash
        and Cash Equivalents, End Period                               |  | $                                  | 8,931  |                                   | $ | 9,333  |  
|                                                                            |  |                                    |        |                                   |   |        |  
|                                                                            |  |                                    |        |                                   |   |        |  
|Supplemental
        disclosure of cash flow information:                   |  |                                    |        |                                   |   |        |  
|Cash
        paid for interest                                              |  | $                                  | 470    |                                   | $ | 484    |  
|                                                                            |  |                                    |        |                                   |   |        |  

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

3

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GLOBIX
CORPORATION AND SUBSIDIARIESNOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(ALL AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

NOTE 1 -
GENERAL

Globix Corporation and its subsidiaries (Globix or
  the Company) is a provider of Internet services to businesses and,
  through its subsidiary NEON Communications, Inc. (NEON), the Company
  owns and operates a high bandwidth fiber optic network that supplies transport
  services to carriers and enterprise customers in the twelve-state Northeast
  and mid-Atlantic market. The Company currently offers services from facilities
  in New York City, New York, Westborough, Massachusetts, Fairfield, New Jersey,
  Santa Clara, California, and London, England. The Companys common stock
  is traded on the American Stock Exchange under the symbol GEX.

The Company has historically experienced negative cash flow from
  operations and has incurred net losses. For the three-month period ended December
  31, 2005, the Company had a net loss attributable to common stockholders of
  $6,210 and an accumulated deficit of $124,905. The Companys ability to
  generate positive cash flows from operations and achieve profitability is dependent
  upon its ability to grow its revenue while maintaining its current cost structure
  and network efficiencies. The Companys board of directors has determined
  that interest on its 11% senior notes will be paid in kind on May 1, 2006. However,
  there can be no assurance that we will be successful in achieving sufficient
  profitability, attracting new customers, maintaining our existing revenue levels
  or reducing our outstanding indebtedness. In addition, in the future, the Company
  may make acquisitions or other investments, which, in turn, may adversely affect
  the Companys liquidity. In such cases management will have to take drastic
  steps to reduce its operating expenses to meet its liquidity needs. Such steps
  may include further reduction of our headcount, consolidation, elimination or
  sale of facilities, termination of low margin customers and negotiating with
  our creditors to restructure our indebtedness with, but not limited to, our
  11% and 9% senior notes.

NOTE 2 -
SIGNIFICANT ACCOUNTING POLICIES

BASIS OF
PRESENTATION

The consolidated financial statements of the Company have been
  prepared by the Company according to U.S. generally accepted accounting principles
  for interim financial information, and the rules and regulations of the Securities
  and Exchange Commission for interim consolidated financial statements. Accordingly,
  they do not include all of the information and notes required by generally accepted
  accounting principles in the United States of America for complete financial
  statements. In the opinion of management, the unaudited interim consolidated
  financial statements furnished herein include all of the adjustments necessary
  for a fair presentation of the Companys financial position at December
  31, 2005 and the three-month period then ended. All such adjustments are of
  a normal recurring nature. The consolidated financial statements should be read
  in conjunction with the consolidated financial statements and notes thereto,
  contained in the 2005 Form 10-K. The results of operations for the three-month
  period ended December 31, 2005 are not necessarily indicative of the results
  for the entire fiscal year ending September 30, 2006.

MANAGEMENT
ESTIMATES

The preparation of the Companys financial
statements in accordance with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions.
Such estimates and assumptions affect the reported amounts of assets,
liabilities, revenue and expenses and related disclosures of contingent assets
and liabilities.

Significant estimates include estimates of
the allowance for doubtful accounts, credit reserve, the useful lives and
ultimate realizability of property, equipment, intangible assets, deferred tax
valuation allowance and payroll and occupancy cost allocations between cost of
revenue and selling, general and administrative expenses. Estimates and
assumptions are reviewed periodically and the effects of revisions are
reflected in the period that they are determined to be necessary. Actual
results may vary from these estimates under different assumptions or
conditions.

STOCK-BASED
COMPENSATION

In December 2004, the FASB
issued SFAS 123(R). SFAS 123(R) eliminates the alternative to use the intrinsic
value method of accounting that was provided in SFAS 123, which generally
resulted in no compensation expense recorded in the financial statements
related to the issuance of equity awards to employees. SFAS 123(R) requires
that the cost resulting from all share based payment transactions be recognized
in the financial statements. SFAS 123(R) establishes fair value as the
measurement objective in accounting for share based payment arrangements and
requires all companies to apply a fair value based measurement method in
accounting for generally all share based payment transactions with employees.

On October 1,
2005 (the first day of our 2006 fiscal year), the Company adopted SFAS 123(R).
The provisions of SFAS 123(R) became effective the first annual reporting
period beginning after June 15, 2005. We adopted SFAS 123(R) using a modified
prospective application, as permitted under SFAS 123(R). Accordingly, prior
period amounts have not been restated. Under this application, we are required
to

4

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GLOBIX
CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(ALL AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

record
compensation expense for all awards granted after the date of adoption and for
the unvested portion of previously granted awards that remain outstanding at
the date of adoption.

Prior to the Companys
adoption of SFAS No. 123(R), SFAS No. 123 required that the Company provide pro
forma information regarding net earnings and net earnings per common share as
if compensation cost for the Companys stock based awards had been determined
in accordance with the fair value method prescribed therein. The Company had
previously adopted the disclosure portion of SFAS No. 148, Accounting for
Stock Based Compensation  Transition and Disclosure, requiring
quarterly SFAS No. 123 pro forma disclosure. The pro forma charge for
compensation cost related to stock based awards granted was recognized over the
service period. For stock options, the service period represents the period of
time between the date of grant and the date each option becomes exercisable
without consideration of acceleration provisions (e.g., retirement, change of
control, etc.).

The following
table illustrates the effect on net earnings per common share as if the fair
value method had been applied to all outstanding awards for the three months
ended December 31, 2004:

|                                                                                                                                                |  |   |        |  
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------ | -
|Net loss, as
  reported attributable to common stockholders                                                                                     |  | $ | (6,265 | )
|Add:
  Stock-based employee compensation expense included                                                                                       |  |   |        |  
|In
  reported
  net loss                                                                                                                        |  |   | 23     |  
|                                                                                                                                                |  |   |        |  
|Deduct: Total stock-based employee
  compensation expense determined under fair value based method for all awards,
  net of related tax effects |  |   | (141   | )
|                                                                                                                                                |  |   |        |  
|Pro forma net loss
  attributable to common stockholders                                                                                        |  | $ | (6,383 | )
|                                                                                                                                                |  |   |        |  
|                                                                                                                                                |  |   |        |  
|Loss per share
  attributable to common stockholders                                                                                            |  |   |        |  
|Basic and diluted earnings per
  share  as reported                                                                                            |  | $ | (0.38  | )
|                                                                                                                                                |  |   |        |  
|Basic and diluted earnings per
  share  pro forma                                                                                              |  | $ | (0.39  | )
|                                                                                                                                                |  |   |        |  

Beginning with our 2006 fiscal year, with the adoption of SFAS
  123(R), we included stock based compensation in selling, general and administrative
  expense for the cost of stock options. Stock based compensation expense for
  the three months ended December 31, 2005 was $1,656 which includes the expense
  of $1,608 associated with the hiring of Ted S. Lodge as Chairman of the Companys
  board of directors and as Executive Chairman of the Company (as previously disclosed
  in the form 8-K filed on November 3, 2005).

Under SFAS No. 123(R) the fair value of each
option grant is estimated on the date of grant using the Black-Scholes
option-pricing model.

The Company granted options with an exercise price of $2.75 to
  Mr. Lodge to purchase 1,000,000 shares of its common stock during the three-month
  period ended December 31, 2005. The Company did not grant any new options during
  the three-month period ended December 31, 2004.

RECENT
ACCOUNTING PRONOUNCEMENTS

In May 2005,
the FASB issued SFAS No. 154, Accounting Changes and Error Corrections  A
Replacement of APB Opinion No. 20 and FASB Statement No. 3. SFAS No. 154
replaces APB Opinion No. 20, Accounting Changes and FASB Statement No. 3,
Reporting Accounting Changes in Interim Financial Statements, and changes the
requirements for the accounting for and reporting of a change in accounting
principle. APB No. 20 previously required that most voluntary changes in
accounting principle be recognized by including in net income of the period of
the change the cumulative effect of changing to the new accounting principle.
SFAS No. 154 requires retrospective application to prior periods financial
statements for voluntary changes in accounting principle.

SFAS No. 154
is effective for accounting changes and corrections of errors made in fiscal
years beginning after December 15, 2005. The adoption of SFAS No. 154 will
depend on the accounting change, if any, in a future period.

NOTE 3 - ACQUISITION OF NEON COMMUNICATIONS, INC.

On March 7, 2005, Globix
completed its acquisition of NEON by purchasing all of the capital stock of
NEON. The purchase price of $112,862 consisted of $5,349 in cash, the issuance
of 27,573 shares of common stock with a fair value of $83,507 (based on the
average share price during the three day period before and after the
announcement of the merger), the issuance of 2,972 shares of cumulative
convertible preferred stock with a fair market value of $12,639, the issuance
of options and warrants to acquire 3,381 shares with a fair value

5

---



GLOBIX
CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(ALL AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

of $7,928 and approximately $3,439 of other direct acquisition
  costs. NEON owns and operates a high bandwidth fiber optic network, extending
  from Maine to Virginia. Through this network NEON provides metro and intercity
  communications coverage, as well as co-location space, to local and long distance
  telecommunications carriers and a small number of non-carrier customers, including
  universities, colleges and financial institutions, in various markets in the
  Northeast and mid-Atlantic regions. The estimate allocation of the purchase
  price is summarized below:

|                                                      |  |   |         |  
|----------------------------------------------------- |  | - | ------- | -
|Cash and cash equivalents
  acquired                  |  | $ | 8,116   |  
|Accounts receivable
  acquired                        |  |   | 1,976   |  
|Prepaid and other assets
  acquired                   |  |   | 1,558   |  
|Restricted cash and
  investments acquired            |  |   | 7,501   |  
|Fair value of property,
  plant and equipment assumed |  |   | 117,146 |  
|Identifiable intangible
  assets assumed              |  |   | 4,500   |  
|Other assets (assumed)                                |  |   | 3,625   |  
|Accounts payable and
  accrued liabilities assumed    |  |   | (12,133 | )
|Deferred revenue assumed                              |  |   | (17,363 | )
|Other liabilities assumed                             |  |   | (2,064  | )
|                                                      |  |   |         |  
|                                                      |  | $ | 112,862 |  
|                                                      |  |   |         |  

The following unaudited pro
forma combined results of operations assume that the acquisition occurred on
October 1, 2004. This unaudited information should not be relied upon as
necessarily being indicative of future results.

|                                                               |  |                              |   |            |   | 
|-------------------------------------------------------------- |  | ---------------------------- | - | ---------- | - | 
|                                                               |  | FOR
  THE THREE MONTHS ENDED |  
|                                                               |  |                              |   |            |   | 
|                                                               |  | December
  31,
  2004        |  
|                                                               |  |                              |  
|                                                               |  |                              |   |            |   | 
|Revenue                                                        |  |                              | $ | 28,788     |   | 
|                                                               |  |                              |   |            |   | 
|Net
        loss                                               |  |                              |   | (7,095     | ) | 
|                                                               |  |                              |   |            |   | 
|Basic and diluted net income per common share
Pro-forma        |  |                              | $ | (0.15      | ) | 
|                                                               |  |                              |   |            |   | 
|Weighted average common shares outstanding - basic
and diluted |  |                              |   | 48,578,461 |   | 

NOTE 4 -
SEGMENT INFORMATION

Subsequent to the acquisition of NEON on March 7, 2005, the Company
  evaluates its results of operations based on two reportable segments in accordance
  with SFAS No. 131, Disclosures about Segments of an Enterprise and Related
  Information. Prior to March 7, 2005, the Company evaluated its operations
  based on one reportable segment.

6

---



GLOBIX
CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(ALL AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

|                             |  |                                                              |        |                                                              |   |        |  
|---------------------------- |  | ------------------------------------------------------------ | ------ | ------------------------------------------------------------ | - | ------ | -
|                             |  | Three Months
        Ended
        DECEMBER 31,
        2005 |        | Three Months
        Ended
        DECEMBER 31,
        2004 |  
|Revenues:                    |  |                                                              |        |                                                              |   |        |  
|                             |  |                                                              |        |                                                              |   |        |  
|Globix                       |  | $                                                            | 16,374 |                                                              | $ | 16,530 |  
|NEON                         |  |                                                              | 15,314 |                                                              |   |       |  
|Corporate                    |  |                                                              |       |                                                              |   |       |  
|                             |  |                                                              |        |                                                              |   |        |  
|                             |  |                                                              |        |                                                              |   |        |  
|Consolidated                 |  | $                                                            | 31,688 |                                                              | $ | 16,530 |  
|                             |  |                                                              |        |                                                              |   |        |  
|                             |  |                                                              |        |                                                              |   |        |  
|Operating income (loss):     |  |                                                              |        |                                                              |   |        |  
|Globix                       |  | $                                                            | 114    |                                                              | $ | (1,760 | )
|NEON                         |  |                                                              | 1,695  |                                                              |   |       |  
|Corporate                    |  |                                                              | (5,591 | )                                                            |   | (2,255 | )
|                             |  |                                                              |        |                                                              |   |        |  
|Consolidated operating loss: |  | $                                                            | (3,782 | )                                                            | $ | (4,015 | )
|                             |  |                                                              |        |                                                              |   |        |  

|              |  |              |         |              |   |        | 
|------------- |  | ------------ | ------- | ------------ | - | ------ | 
|              |  | DECEMBER 31, |         | DECEMBER 31, |  
|              |  | 2005         |         | 2004         |  
|Fixed assets: |  |              |         |              |   |        | 
|              |  |              |         |              |   |        | 
|Globix        |  | $            | 83,273  |              | $ | 91,137 | 
|              |  |              |         |              |   |        | 
|NEON          |  |              | 121,561 |              |   |       | 
|              |  |              |         |              |   |        | 
|              |  |              |         |              |   |        | 
|Consolidated  |  | $            | 204,834 |              | $ | 91,137 | 
|              |  |              |         |              |   |        | 

Operating
results and assets information by geographic area:

|                                     |  |                                                                      |        |                                                                      |   |        |  
|------------------------------------ |  | -------------------------------------------------------------------- | ------ | -------------------------------------------------------------------- | - | ------ | -
|                                     |  | Three Months
        Ended
        DECEMBER
        31,
        2005 |        | Three Months
        Ended
        DECEMBER
        31,
        2004 |  
|                                     |  |                                                                      |        |                                                                      |  
|Revenues:                            |  |                                                                      |        |                                                                      |   |        |  
|United States                        |  | $                                                                    | 25,285 |                                                                      | $ | 8,882  |  
|Substantially United
        Kingdom |  |                                                                      | 6,403  |                                                                      |   | 7,648  |  
|                                     |  |                                                                      |        |                                                                      |   |        |  
|Consolidated                         |  | $                                                                    | 31,688 |                                                                      | $ | 16,530 |  
|                                     |  |                                                                      |        |                                                                      |   |        |  
|                                     |  |                                                                      |        |                                                                      |   |        |  
|Operating income (loss):             |  |                                                                      |        |                                                                      |   |        |  
|United States                        |  | $                                                                    | (4,505 | )                                                                    | $ | (4,864 | )
|Substantially United
        Kingdom |  |                                                                      | 723    |                                                                      |   | 849    |  
|                                     |  |                                                                      |        |                                                                      |   |        |  
|Consolidated                         |  | $                                                                    | (3,782 | )                                                                    | $ | (4,015 | )
|                                     |  |                                                                      |        |                                                                      |   |        |  

7

---



GLOBIX
CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(ALL AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

|                               |  |                     |         |                     |   |        | 
|------------------------------ |  | ------------------- | ------- | ------------------- | - | ------ | 
|                               |  | DECEMBER 31,
  2005 |         | DECEMBER 31,
  2004 |  
|                               |  |                     |         |                     |  
|Fixed assets:                  |  |                     |         |                     |   |        | 
|United
  States                |  | $                   | 181,558 |                     | $ | 63,633 | 
|Substantially
  United Kingdom |  |                     | 23,276  |                     |   | 27,504 | 
|                               |  |                     |         |                     |   |        | 
|                               |  |                     |         |                     |   |        | 
|Consolidated                   |  | $                   | 204,834 |                     | $ | 91,137 | 
|                               |  |                     |         |                     |   |        | 
|                               |  |                     |         |                     |   |        | 

Although the Company operates in two reportable segments, there
  are 6 major service lines as follows:

|                                        |  |                              |        |                       |   |        | 
|--------------------------------------- |  | ---------------------------- | ------ | --------------------- | - | ------ | 
|                                        |  | For
  the Three Months Ended |       
|                                        |  |                              |       
|                                        |  | December
  31,
  2005        |        | December
  31,
  2004 |  
|                                        |  |                              |        |                       |  
|Internet Hosting and
  Co-Location      |  | $                            | 8,251  |                       | $ | 6,070  | 
|Managed Services                        |  |                              | 5,304  |                       |   | 5,425  | 
|Network Services and Internet
  Access  |  |                              | 2,963  |                       |   | 3,978  | 
|Lit Fiber Services                      |  |                              | 13,674 |                       |   |       | 
|Dark Fiber Services                     |  |                              | 1,153  |                       |   |       | 
|Hardware and Software Sales and
  Other |  |                              | 343    |                       |   | 1,057  | 
|                                        |  |                              |        |                       |   |        | 
|Revenue, net                            |  | $                            | 31,688 |                       | $ | 16,530 | 
|                                        |  |                              |        |                       |   |        | 

NOTE 5 - COMPREHENSIVE LOSS

|                                                              |  |                              |        |                       |   |        |  
|------------------------------------------------------------- |  | ---------------------------- | ------ | --------------------- | - | ------ | -
|                                                              |  | For
  the Three Months Ended |       
|                                                              |  |                              |       
|                                                              |  | December
  31,
  2005        |        | December
  31,
  2004 |  
|                                                              |  |                              |        |                       |  
|                                                              |  |                              |        |                       |   |        |  
|Net loss attributable to common
  stockholders                |  | $                            | (6,210 | )                     | $ | (6,265 | )
|Other comprehensive income:                                   |  |                              |        |                       |   |        |  
|Unrealized gain on marketable securities
  available for sale |  |                              |       |                       |   | 242    |  
|Foreign currency translation adjustment                       |  |                              | 568    |                       |   | 1,879  |  
|                                                              |  |                              |        |                       |   |        |  
|Comprehensive loss                                            |  | $                            | (5,642 | )                     | $ | (4,144 | )
|                                                              |  |                              |        |                       |   |        |  

NOTE 6 - COMMITMENTS AND CONTINGENT LIABILITIES

From time to time, the Company is involved in
legal proceedings in the ordinary course of our business operations. Although
there can be no assurance as to the outcome or effect of any legal proceedings
to which the Company is a party, the Company does not believe, based on
currently available information, that the ultimate liabilities, if any, arising
from any such legal proceedings would have a material adverse impact on our
business, financial condition, results of operations or cash flows.

There have been no developments in ongoing
legal proceedings nor have any material litigations been commenced or
threatened since the prior descriptions in Note 16 to the Consolidated
Financial Statements in the 2005 Form 10-K, and the Legal Proceedings section
thereto.

NOTE 7 - DEBT FINANCING

In order to obtain additional financing to meet the Companys
  needs for working capital, on December 13, 2005, the Company issued and sold
  $5 million in principal amount of its 9% senior notes to a group of investors.
  The notes mature on May 1, 2008. Interest on the notes is payable quarterly
  in arrears, beginning January 1, 2006. One percent of the proceeds of the notes
  was used to pay a one time origination fee to the note purchasers at closing.
  The notes are secured by a first priority security interest in domestic accounts
  receivable in the amount of 150% of the principal amount of the notes. Covenants
  and events of default under the notes are generally no more onerous than those
  contained in the indenture relating to the Companys outstanding 11% senior notes, except
  that the new notes limit the incurrence of additional senior debt that otherwise
  might be permitted under the 11% senior notes. The new notes can be prepaid
  without penalty or premium at any time following 30 days notice.

Purchasers of
the notes include: LC Capital Master Fund Ltd., an investment fund managed by
an investment advisor with which one member of the Companys Board of
Directors, Steven Lampe, is affiliated; Karen Singer, the sister-in-law of
another Board member, Steven Singer; and Metronome LPC 1, Inc., an affiliate of
Loeb Partners Corp., which (together with its affiliates) is the beneficial
owner of

8

---



GLOBIX
CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(ALL AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

approximately 7.9% of our common stock. LC Capital Corp. Ltd.
  is the beneficial owner of approximately 10.9% of the Companys common
  stock (including 462,462 shares that may be acquired upon conversion of our
  convertible preferred stock). Karen Singer is the sole trustee of the Singer
  Childrens Management Trust, which is the beneficial owner of approximately
  8.8% of the Companys common stock (including 699,099 shares that may be
  acquired on conversion of the preferred stock). The principal amounts purchased
  by these holders are $1 million for LC Capital Master Fund Ltd., $1 million
  for Karen Singer and $1 million for Metronome. Steven Singer disclaims any beneficial
  ownership interest in the 9% notes. The transaction was approved by all of the
  disinterested members of the board of directors.

Prior to commencing discussions with the purchasers of the notes,
  the Company approached and made presentations to a number of unaffiliated financial
  institutions in its efforts to locate working capital financing. The Company
  believes that the terms of the 9% notes are significantly better than the terms
  of any written proposal received by it, based on the financial terms of the
  loan and associated transactional costs, as well as better prepayment and other
  operational terms.

NOTE 8 - DEBT FOR EQUITY EXCHANGE

As a condition to the closing of the acquisition of Neon, Globix
  exchanged $12.5 million in principal and accrued interest on its 11% senior
  notes in exchange for 4,545,455 shares of its common stock in private transactions
  pursuant to separate securities exchange agreements with certain holders of
  the 11% senior notes. LC Capital Master Fund Ltd., an entity affiliated with
  Steven Lampe, a member of the Board of Directors of Globix, exchanged $1.25
  million in 11% senior notes for 454,545 shares of common stock. This exchange
  resulted in a loss of $3.2 million in the quarter ended March 31, 2005. Globix
  has filed a registration statement covering the sale of the common stock issued
  in the debt for equity exchange. The debt-for-equity exchange agreements provide
  that the exchanging holders will have the right to purchase an additional 22,728
  shares of common stock at $2.75 per share in the event that a registration statement
  covering shares is not effective within 120 days following the closing of the
  merger, and an additional 22,728 shares at $2.75 per share if the registration
  statement is not effective for more than 90 days during the first twelve months
  commencing on the 90th day following the closing of the merger. At July 6, 2005,
  the exchanging holders had the right to purchase 22,728 additional shares in
  the aggregate as a result of the failure of the registration statement to become
  effective. The registration statement became effective on September 27, 2005.

NOTE 9 - PREFERRED STOCK

Globix has authorized 4,500,000 shares of 6% Series A Cumulative
  Convertible Preferred Stock (preferred stock), of which 2,971,753
  shares were issued in the acquisition of Neon. Each share of preferred stock
  is convertible into one share of common stock at the option of the holder, is
  entitled to one vote, has a liquidation preference of $3.60 per share plus accrued
  dividends, and is senior to the common stock of Globix. Dividends are payable
  semi-annually at a rate of $0.11 per share when and if declared by the Board
  of Directors. At the option of Globix, dividends are payable in cash or additional
  shares of preferred stock. At the option of Globix, shares of preferred stock
  can be redeemed in whole or in part at $3.82 per share, plus accrued dividends,
  in 2006, $3.71 per share, plus accrued dividends, in 2007 and $3.60 per share,
  plus accrued dividends, thereafter. In the event of a change of control, as
  defined, each holder of preferred stock can require Globix to purchase such
  holders shares of preferred stock for a price equal to $3.64 plus accrued
  and unpaid dividends to the purchase date. As of December 31, 2005, a dividend
  of $531 thousand in the aggregate, payable in either cash or additional shares
  of preferred stock at $3.60 per share, had accrued on the outstanding shares
  of preferred stock.

NOTE 10 - WARRANTS ISSUED

As of May 1, 2005, Globix issued a warrant to Further Lane Asset
  Management, LLC to purchase 250,000 shares at a purchase price of $4.00 per
  share in a private transaction exempt from registration under Section 4(2) of
  the Securities Act of 1933, in exchange for financial advisory services to be
  provided to Globix by Further Lane. One twelfth of the warrants become exercisable
  in each month so that all warrants will be vested on May 1, 2006. The warrants
  expire on May 1, 2008.

NOTE
  11 - FIBER OPTIC EXCHANGE



On
  December 30, 2005 the NEON division of Globix entered into a fiber optic exchange
  agreement with AT&T Corp. Globix provided fiberalong its New York City to Washington, DC route in
  exchange for fiber principally located in northern New Jersey and greater Philadelphia
  and $1,960 in cashfrom
  AT&T. The Company treated this as a reduction of the fair value of
  the plant, property and equipment acquired in the NEON acquisition. No gain
  or loss resulted from the exchange.

9

---



ITEM 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Cautionary Statement Regarding Forward-Looking
Statements

Certain statements in this Form 10-Q, under
the captions Managements Discussion and Analysis of Financial Condition and
Results of Operations, Quantitative and Qualitative Disclosures about Market
Risk, and Legal Proceedings, constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve unknown and uncertain risks, uncertainties
and other factors, which may cause the actual results, performance or
achievements of the Company, or industry results, to be materially different
from any future results, performance, or achievements expressed or implied by
such forward-looking statements. Forward-looking statements are identified by
the use of forward-looking words or phrases such as anticipates, intends,
expects,
believes, estimates, or words or phrases of similar import. These
forward-looking statements are subject to numerous assumptions, risks, and
uncertainties and the statements looking forward beyond fiscal 2006 are subject
to greater uncertainty because of the increased likelihood of changes in
underlying factors and assumptions. Actual results could differ materially from
those anticipated by the forward-looking statements. Among these factors are
the Companys high degree of leverage and history of operating losses, its
ability to retain existing customers and attract new customers, its ability to
achieve cost-savings and generate positive cash flow, risks associated with
potential acquisitions and divestitures and other factors affecting the Companys
business generally. Such factors are more fully described herein and in the
Companys Annual Report on Form 10-K for the year ended September 30, 2005,
which should be considered in connection with a review of this report. For a
general discussion of risks affecting the Companys business, see Risk Factors
in the Companys Annual Report on Form 10-K for the year ended September 30,
2005.

OVERVIEW

We area provider of Internet services to
  businesses and, through our subsidiary NEON Communications, Inc. (NEON),
  we own and operate a high bandwidth fiber optic network that supplies transport
  services to carriers and enterprise customers in the twelve-state Northeast
  and mid-Atlantic market. We currently offer services from facilities in New
  York City, New York, Westborough, Massachusetts, Fairfield, New Jersey, Santa
  Clara, California, Atlanta, Georgia and London, England. The Companys
  common stock is traded on the American Stock Exchange under the symbol GEX.

On March 7,
2005, we completed our acquisition of all of the capital stock of NEON valued
at $112.9 million in exchange for common and convertible preferred stock of
Globix worth approximately $96.2 million, options and warrants of Globix common
stock worth approximately $7.9 million, direct closing costs of approximately
$3.4 million and approximately $5.4 million in cash. Simultaneously with the
closing of the acquisition, we exchanged $12.5 million in principal and
interest on our 11% senior notes for 4,545,455 shares of common stock.

On December
13, 2005, we issued and sold $5 million in principal amount of our 9% senior
secured notes due May 1, 2008.  For further
information about the terms of this financing, see Note 7 of these financial
statements.

OVERVIEW: OUR MAJOR SERVICE LINES

Although we
operate in two reportable segments, there are 6 major service lines as follows:

INTERNET
HOSTING AND CO-LOCATION - We offer co-location solutions for customers who
choose to own and maintain their own servers and or optronics, but require the
physically secure, climate-controlled environment provided by our data centers
and connectivity to our network. We offer hosting services in a dedicated
server environment. This service includes providing integrated hardware usage,
bandwidth and managed services to meet customer-specific needs.

MANAGED
SERVICES - We provide managed application, system, network and media services
to our hosting and co-location customers. Such services include a wide variety
of maintenance, administration and problem resolution services for many popular
operating systems, Internet network devices, software security solutions,
web-based applications, as well as streaming media delivered in a streaming or
continuous fashion over the Internet or over a companys intranet.

NETWORK
SERVICES AND INTERNET ACCESS - We provide access to our network for our hosting
and co-location customers located inside of our Internet data centers as well
as Internet access services which provide businesses with high-speed continuous
access to the Internet from their own premises. In addition, we provide other
services, such as domain name registration, local loop provisioning, Internet
address assignment, router configuration, e-mail configuration and management
and technical consulting services.

LIT FIBER
SERVICES (TRANSPORT SERVICES) - We provide dedicated, point-to-point services
provided over fiber optic transmission lines that have electronic or optronic
equipment installed and maintained by NEON. Specific service offerings include:
SONET Private Line services at bandwidth levels including DS-3, OC-3, OC-12 and
OC-48; Wavelength (DWDM) services enabling flexible and scalable high

10

---



capacity
transport at 2.5 and 10 Gbps, configured as either protected or unprotected
wavelengths; and Ethernet services via dedicated, point-to-point connectivity
offered as Fast Ethernet (FastE) at 50 or 100 Mbps and Gigabit Ethernet (GigE) at
600 or 1000 Gbps.

DARK FIBER
SERVICES - We lease fiber cable in our fiber optic network running from
Portland, ME to Washington, DC. The fiber cable is leased without electronic or
optronic equipment installed by NEON.

OTHER -
Hardware and software sales and other non-recurring revenue from our Globix
business segment. Hardware and software sales are typically tied to agreements
to provide recurring services such as hosting, network services, managed
services and etc.

Our Globix
business segment includes all of our Internet services except for co-location
services that are provided at various locations along our fiber optic network,
which we include in our NEON business segment.
Our NEON business segment includes lit and dark fiber services utilizing
our fiber optic network, and co-location services along this network.

OVERVIEW:  STRATEGY

Our strategy is to grow profitably by selling a more profitable mix of business, continued investment in revenue supporting infrastructure and through targeted acquisitions, where feasible.  Our transport business has experienced consistent revenue growth and profitability improvement through success based investments to meet the growing needs of our customers.  To the extent the company has the financial resources to continue making these investments it will do so.  Our transport business will continue to focus on selling into the carrier and large enterprise markets.  Within these segments our key customer targets are wireless providers, competitive local exchange carriers (CLECs), inter-exchange carriers, financial services providers and universities.



In our hosting business we continue to be focused on improving the cost structure, selling a more profitable mix of services, and limited infrastructure expansion investments.   The target market for the hosting segment is small to medium size businesses, and the company seeks to optimize its profitability with each customer by offering them a package of services that includes co-location, internet access and managed services.



Growth through acquisition offers the possibility of revenue growth and the expansion of service territory and service offerings to enable us to compete more effectively, while providing a larger revenue base to support our existing indebtedness.  The ability to achieve operating efficiencies by combining administrative or other functions is also a consideration in reviewing possible acquisitions.  Because of our limited availability to cash and our limited access to capital markets, we may not be able to pursue an acquisition strategy and, in fact, may be forced to divest some or all of our businesses.



Although the acquisition of NEON and the concurrent debt-for-equity exchange have increased our revenues and asset base and reduced the total amount of our indebtedness, we remain highly leveraged. Our board of directors has elected to pay annual accrued interest of approximately $7.4 million on the 11% senior notes through the issuance of additional notes on May 1, 2006.



CRITICAL
ACCOUNTING POLICIES AND ESTIMATES

This Managements Discussion and Analysis of
Financial Condition and Results of Operations is based upon our interim
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of our financial statements requires us to make estimates that
affect the reported amounts of assets, liabilities, revenue and expenses and
related disclosures of contingent assets and liabilities. We base our accounting
estimates on historical experience and other factors that are believed to be
reasonable under the circumstances.
However, actual results may vary from these estimates under different
assumptions or conditions. The following is a summary of our critical accounting
policies and estimates:

REVENUE
RECOGNITION

Revenue
consists primarily of Internet hosting, co-location, managed services, network
services, internet access, lit fiber services and dark fiber services.

We recognize
revenue in accordance with the Securities and Exchange Commissions Staff
Accounting Bulletin (SAB), No. 104 Revenue Recognition.

The Globix
business segment recognizes revenue when delivery has occurred, persuasive
evidence of an agreement exists, the fee is fixed or determinable and
collectability is probable. SAB No. 104 expresses the view of the Securities
and Exchange Commissions staff in applying accounting principles generally
accepted in the United States of America to certain revenue recognition issues.
Under the provisions of SAB No. 104, set up and installation revenue are
deferred and recognized over the estimated length of the customer relationship,
which in the case of our Globix segment is approximately 36 months. Monthly
service revenue under recurring agreements related to Internet hosting,
co-location, network services, Internet access and managed services is
recognized over the period that service is provided. Revenue derived

11

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from project
or event type managed service engagements is recognized over the life of the engagement.
Payments received in advance of providing services are deferred until the
period that these services are provided.

The NEON
business segment offers leases of lit fiber (fixed amounts of capacity on fiber
optic transmission lines that use optronics equipment installed by us) and
longer term leases of dark fiber (fiber optic transmission lines leased without
optronics equipment installed by us) at fixed cost pricing over multi year
terms. Revenues from fiber optic network services are recognized ratably over
the term of the applicable lease agreements with customers, which range from
one to 20 years, provided there exists persuasive evidence of an arrangement,
the fee is fixed or determinable and collectability of the related receivables
is reasonably assured. Amounts billed in advance of the service provided are
recorded as deferred revenue. We also lease space to customers at our
co-location facilities. Revenues from nonrecurring installation charges and
design, engineering and construction services are recognized ratably over the
multi-year network services terms to which the nonrecurring charges relate
provided there exists persuasive evidence of an arrangement, the fee is fixed
or determinable and collectability of the related receivables is reasonably
assured.

COST OF
REVENUE

Cost of
revenue for Internet services consists primarily of telecommunications costs
for Internet access and managed hosting, payroll and occupancy which we incur
in support of our network operations, systems and customer services and the
cost of hardware and software purchased for resale to customers. Payroll costs
allocated to cost of revenue are based on the primary activity of the
department such as maintaining the network, customer support and systems
operations. Occupancy costs allocated to cost of revenue are based primarily on
the square footage of our various facilities. Cost of revenue excludes
depreciation and amortization. Telecommunications costs include the cost of
providing local loop for connecting dedicated access customers to our network,
leased line and associated costs related to connecting with our peering
partners and costs associated with leased lines connecting our facilities to
its backbone and aggregation points of presence.

Cost of
revenue for fiber services consists primarily of right of way fees, dark fiber
leases, real estate and co-location leases, last mile circuit leases and
network operations and maintenance costs. Right of way fees are paid primarily
to utilities and public and private entities for the right to place fiber optic
cable on their structures and property. Fiber leases are fees paid to other
telecommunications providers for the use of their dark fiber over which we
provide transport services. We lease real estate and co-location space to allow
placement of optronics equipment to power our network. Last mile circuit leases
consist of services from other carriers and local phone companies to extend
transport services beyond our network to a customer location. Network
operations and maintenance consists primarily of labor, contractor services and
utility costs.

PROPERTY, PLANT, AND
EQUIPMENT

Property, plant and equipment are stated at depreciated historical
  cost adjusted for impairment and include fresh start adjustments. Depreciation
  is provided using the straight-line method for financial reporting purposes
  and accelerated methods for income tax purposes. The estimated useful lives
  of property are as follows:

YEARS

|                                                       |    |   |   
|------------------------------------------------------ | -- | - | --
|Buildings
  and buildings improvements                 | 10 |  | 44
|Computer
  hardware and software and network equipment | 2  |  | 20
|Office
  furniture and equipment                       | 3  |  | 7 

Leasehold
improvements are amortized over the term of the lease or life of the asset,
whichever is shorter. Maintenance and repairs are charged to expense as
incurred. The cost of additions and betterments are capitalized. The cost and
related accumulated depreciation of property retired or sold are removed from
the applicable accounts and any gain or loss is taken into income.

Software
obtained for internal use is stated at depreciated historical cost adjusted for
impairments and fresh start adjustments and is depreciated using the
straight-line method over its estimated useful life.

Our long-lived
assets are reviewed for impairment in accordance with Statement of Financial
Accounting Standard No. 144 Accounting for the Impairment or Disposal of
Long-Lived Assets (SFAS No. 144) whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the
carrying amount of an asset to the future undiscounted cash flows expected to
be generated by the assets. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets.

12

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INTANGIBLE
ASSETS

We adopted SFAS No. 141, Business
Combinations and SFAS No. 142, Goodwill and Other Intangible Assets when we
emerged from bankruptcy in April 2002. SFAS 141 requires all business
combinations to be accounted for using the purchase method of accounting and
that certain intangible assets acquired in a business combination must be
recognized as assets separate from goodwill. SFAS No. 142 addresses the
recognition and measurement of goodwill and other intangible assets subsequent
to their acquisition. SFAS No. 142 also addresses the initial recognition and
measurement of intangible assets acquired outside of a business combination
whether acquired individually or with a group of other assets. SFAS No. 142
provides that intangible assets with indefinite lives and goodwill will not be
amortized but, will be tested at least annually for impairment. If an
impairment is indicated then the asset will be written down to its fair value
typically based upon its future expected discounted cash flows.

| |                                       |                                
| | ------------------------------------- | -------------------------------
| | Our intangible assets are as follows:
| |                                      
| |                                      | trademarks and trade name;     
| |                                       |                                
| |                                      | network build-out/know-how; and
| |                                       |                                
| |                                      | customer contracts.            

We amortize intangible assets by the
straight-line method over their estimated useful lives. Trademarks and trade
name are amortized over a period of 7-15 years, network build-out/know-how is
amortized over 8 years and the customer contracts are amortized over 2-10
years.

ESTIMATES

The preparation of financial statements in accordance with accounting
  principles generally accepted in the United States of America requires us to
  make estimates and assumptions that affect the reported amount of assets, liabilities,
  revenue and expenses and related disclosure of contingent assets and liabilities.
  Use of estimates and assumptions include, but is not limited to, allowance for
  doubtful accounts, credit reserve, the useful lives and ultimate realizability
  of property, equipment, intangible assets, deferred tax valuation allowance
  and payroll and occupancy cost allocation between cost of revenue and selling,
  general and administrative expenses. Estimates and assumptions are reviewed
  periodically and the effects of revisions are reflected in the period that they
  are determined to be necessary. Actual results may vary from these estimates
  under different assumptions or conditions.

ALLOWANCE
FOR DOUBTFUL ACCOUNTS AND CREDIT RESERVE

At each reporting period we evaluate on a specific basis the economic
  condition of our customers and their ability and intent to pay their debt. If
  such evaluation shows that it is probable that a customer will not settle his
  full obligation, a reserve against accounts receivable in general and administrative
  expense is recorded for the questionable amount. We also maintain a general
  bad debt reserve, which is based on the aging of our customers receivables.
  In addition during each reporting period we must make estimates of potential
  future credits, which will be issued in respect of current revenues. We analyze
  historical credits and changes in customer demands regarding our current billings
  when evaluating credit reserves. If such analysis shows that it is probable
  that a credit will be issued, we reserve the estimated credit amount against
  revenues in the current period. As of December 31, 2005 and September 30, 2005
  the balance of bad debt reserve amounted to approximately $1.9 million and $2.0
  million, respectively.

ACCOUNTING
FOR INCOME TAXES

As part of the process of preparing our
consolidated financial statements we are required to estimate our income tax
expense in each of the jurisdictions in which we operate. This process involves
us estimating our actual current tax exposure together with assessing temporary
differences resulting from differing treatment of items, such as accruals and
reserves, for tax and accounting purposes. These differences result in deferred
tax assets and liabilities, which are included within our consolidated balance
sheet. We must then assess the likelihood that our deferred tax assets will be
recovered from future taxable income and to the extent we believe that recovery
is not likely, we must establish a valuation allowance. Management currently
estimates that it is more likely than not that these assets will not be
realized in the foreseeable future and accordingly a 100% valuation allowance
is recorded against the deferred tax assets.

QUARTER ENDED DECEMBER 31, 2005 COMPARED TO
THE QUARTER ENDED DECEMBER 31, 2004

REVENUE, NET. Revenue for the quarter ended December 31,
  2005 increased 92.1%, or approximately $15.2 million, to $31.7 million from
  $16.5 million for the quarter ended December 31, 2004. Excluding $15.3 million
  of revenue as a direct result of the NEON acquisition,

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revenue for the quarter ended December 31, 2005 decreased by 0.6%
  or approximately $0.1 million compared to the quarter ended December 31, 2004.

Revenue breakdown for the major service lines are as follows.
  Revenue from Internet Hosting and Co-Location increased by $2.2 million, or
  36.1%, to $8.3 million in the three month ended December 31, 2005 compared to
  $6.1 million in the same period in fiscal quarter 2004. Revenue from Network
  Services and Internet Access decreased by $1.0 million, or 25.0%, to $3.0 million
  in the three months ended December 31, 2005 compared to $4.0 million in the
  same period of quarter 2004. The changes in these two major service lines are
  mainly due to churn. Churn is defined as contractual revenue losses as a percentage
  of total contractual revenue due to customer cancellations and downgrades, net
  of upgrades, and additions of new services. Revenue from Hardware and Software
  Sales and Other decreased by $0.8 million to $0.3 million in the three month
  period ended December 31, 2005 compared to $1.1 million in the same period in
  2004, which resulted primarily from a decrease in Hardware sales. Revenue from
  Managed Services was $5.3 million in the three month period ended December 31,
  2005 compared to $5.4 million in the same period in 2004. Foreign exchange rates
  between the U.S. dollar and the British Pound did not have a material effect
  on the aforementioned analysis.

Revenue from
Lit and Dark Fiber Services, services newly offered in 2005 as a result of the
acquisition of NEON, were $13.7 million and $1.2 million, respectively, for the
three month period ended December 31, 2005.

COST OF REVENUE.
Cost of revenue for the quarter ended December 31, 2005 increased to $17.4
million from $9.7 million in the quarter ended December 31, 2004. Excluding the
$8.4 million impact of NEON, cost of revenues decreased by $0.7 million
primarily attributable to a decrease in hardware sales in the quarter ended
December 31, 2005 over December 31, 2004 resulting in a $0.9 million decrease
in expense. In addition, our cost of revenue related to managed services
increased by approximately $0.4 million due primarily to increased use
contractors. These increases were offset partly by a decrease in network cost
resulting from deriving efficiencies and cost savings from our network. Foreign
exchange rates between the U.S. dollar and the British Pound did not have a
material effect on the aforementioned analysis.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
  administrative expenses were $12.3 million for the quarter ended December 31,
  2005 as compared to $7.3 million for the quarter ended December 31, 2004. This
  increase included $3.2 million of selling, general and administrative expenses
  for NEON. The remaining increase of $1.8 million is primarily the result of
  a non-cash expense associated with options granted to employees of $1.7 million,
  of which $1.6 million reflected a grant to our new chairman of the board when
  he joined the Company. Additionally, there were $0.7 million increases in professional
  fees and $0.4 million increases in utilities, offset by a $1.0 million decrease
  in salaries and benefits and miscellaneous other minor reductions. Foreign exchange
  rates between the U.S. dollar and the British Pound did not have a material
  effect on the aforementioned analysis.

DEPRECIATION AND AMORTIZATION.
Depreciation and amortization expenses for the quarter ended December 31, 2005
were $5.8 million compared to $3.5 million for the quarter ended December 31,
2004. This increase of $2.3 million is primarily the result of the acquisition
of NEON which accounted for $2.8 million of the total expense recorded.

INTEREST AND FINANCING EXPENSES.
Interest and financing expense for the quarter ended December 31, 2005 was $2.5
million, compared to $2.5 million for the quarter ended December 31, 2004.

INTEREST INCOME.
Interest income for the quarter ended December 31, 2005 was $0.1 million,
compared to $0.1 million for the quarter ended December 31, 2004.

OTHER INCOME/EXPENSE, NET. Other income for quarter ended
  December 31, 2005 was $0.2 million, compared to other income of $0.1 million
  for the quarter ended December 31, 2004.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS. As a result
  of the factors described above, we reported a net loss attributable to common
  stockholders of $6.2 million, or $0.13 basic and diluted loss per share attributable
  to common stockholders, for the quarter ended December 31, 2005, as compared
  to a net loss attributable to common stockholders of $6.3 million, or $0.38
  basic and diluted loss per share attributable to common stockholders for the
  quarter ended December 31, 2004.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2005, our negative working capital was $5,500
  as compared to $8,378 as of September 30, 2005. The increase in working capital
  as of December 31, 2005 was primarily due to the proceeds received from the
  issuance of our 9% senior notes.

Historically
our cost structure in the Globix business segment exceeded our revenue base
mainly due to high labor costs resulting from higher than necessary head count
and a significant level of overhead due to numerous locations and overlapping
within our network. This has led us to experience negative cash flows from
operations and incur net losses. Our management believes that steps taken as
part of our restructuring efforts to reduce facilities and personnel, combined
with our ongoing efforts to derive efficiencies from our network have reduced
our cash outflows, net of capital expenditures, to a level that approximates
our cash inflows. In the second half of fiscal 2005, however, we experienced a
demand for additional capital investment in the NEON business segment as well
as unexpected operating costs and capital requirements in the Globix business
segment. Our ability to generate positive cash flows from operations and
achieve

14

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profitability
is dependent upon our ability to grow our revenue while controlling costs and
becoming more efficient. Management believes it will ultimately be able to meet
its revenue and profitability targets by:

| |   |                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | maintaining
  a monthly positive change in contract rate (negative churn),                                                                                   
| |   |                                                                                                                                                              
| |  | pursuing
  long term contracts that take advantage of market demand for fiber optic
  network services,                                                      
| |   |                                                                                                                                                              
| |  | focusing on
  the most profitable business lines within our existing capital and
  infrastructure constraints, including the provision of services solutions,
| |   |                                                                                                                                                              
| |  | increasing
  prices, where possible and within current industry trends, for services such
  as power and space and                                           
| |   |                                                                                                                                                              
| |  | increasing
  the efficiency of our operations                                                                                                                

There can be
no assurance that we will be successful in achieving sufficient profitability,
attracting new customers, maintaining our existing churn levels or reducing our
outstanding indebtedness. In addition, in the future, we may make acquisitions
or investments, which, in turn, may adversely affect our liquidity. In such
cases we will have to take drastic steps to reduce our operating expenses to
meet our revenue base and liquidity needs. Such steps may include further
reduction of our headcount, consolidation or elimination of facilities,
termination of low margin customers, reduction of capital expenditures and
negotiating with our creditors to restructure our indebtedness, mainly but not
limited to our 11% and 9% senior notes.

As a result of the acquisition of NEON, we assumed commitments
  under standby letters of credit, issued primarily to secure certain leases,
  totaling approximately $7.1 million at December 31, 2005. We have no financial
  guarantees or other arrangements securing the obligations of any third parties
  or related parties other than our subsidiaries. Because of our limited availability
  to cash and our limited access to capital markets, we may not be able to pursue
  an acquisition strategy and, in fact, may be forced to divest some or all of
  our businesses.

The indenture
governing the 11% senior notes and the terms of the 9% senior notes contain a
number of covenants that impose significant operating and financial
restrictions on us and our subsidiaries. These restrictions significantly
limit, and in some cases prohibit, among other things, the ability of our
company and certain of our subsidiaries to incur additional indebtedness,
create liens on assets, enter into business combinations or engage in certain
activities with our subsidiaries.

THREE-MONTH PERIOD ENDED DECEMBER 31, 2005

As of December
31, 2005, we had cash and cash equivalents totaling approximately $8.9 million
compared to approximately $9.3 million on December 31, 2004. This decrease was
mainly attributable to operating activities, investing activities and financing
activities as described below.

OPERATING ACTIVITIES. Net cash used in operating activities
  during the three-month period ended December 31, 2005 was approximately $0.4
  million as compared to $2.6 million during the three-month period ended December
  31, 2004, or a $2.2 million improvement. The improvement in our cash burn was
  due to the improvement in our operating results and our ongoing focus on cost
  control by adjusting our expenditure rate to our revenues.

We had
non-cash depreciation and amortization expenses of $5.8 million and accrued
interest expense of $1.9 million resulting on our 11% senior notes, which will
be paid in kind during May 2006.
Partially offsetting this was the non-cash expense associated with the
amortization of employee stock options, a non-cash gain on the exchange of
property, plant, and equipment of $1.0 and a $3.4 million increase in our
accounts receivable.

INVESTING ACTIVITIES. Net cash used in investing activities
  during the three-month period ended December 31, 2005 was $4.4 million. This
  was attributable primarily to $6.5 million paid for capital expenditures. This
  was partially offset by the proceeds received from AT&T from the fiber optic
  exchange of $2.0 million.

FINANCING ACTIVITIES.
Net cash provided by financing activities during the three-month period ended
December 31, 2005 was $4.8 million, which was attributable to proceeds from the
issuance of our 9% senior notes of $5.0 million, partially offset by the repayments
of mortgage payable and capital lease obligations of $0.2 million.

15

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ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At December 31, 2005, $12.1 million of our
cash and investments were restricted in accordance with the terms of certain
collateral obligations.

We are also subject to market risk associated
with foreign currency exchange rates. To date, we have not utilized financial
instruments to minimize our exposure to foreign currency fluctuations. We will
continue to analyze risk management strategies to minimize foreign currency
exchange risk in the future.

We believe that we have limited exposure to
financial market risks, including changes in interest rates. The fair value of
our investment portfolio or related income would not be significantly impacted
by changes in interest rates due mainly to the short-term nature of the
majority of our investment portfolio. An increase or decrease in interest rates
would not significantly increase or decrease interest expense on debt
obligations, due to the fixed nature of the substantial majority of our debt
obligations.

ITEM 4.
CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. We maintain
  disclosure controls and procedures that are designed to ensure that information
  required to be disclosed in our report under the Securities Exchange Act of
  1934, as amended, is recorded, processed, summarized and reported within the
  time periods specified in the Securities and Exchange Commissions rules
  and forms, and that such information is accumulated and communicated to our
  management, including our Chief Executive Officer and Principal Financial Officer,
  as appropriate, to allow timely decisions regarding required disclosures. Any
  controls and procedures, no matter how well designed and operated, can provide
  only reasonable assurance of achieving the desired control objectives. Our management,
  with the participation of our Chief Executive Officer and Principal Financial
  Officer, has evaluated the effectiveness of the design and operation of our
  disclosure controls and procedures as of December 31, 2005. Based upon that
  evaluation and subject to the foregoing, our Chief Executive Officer and Principal
  Financial Officer concluded that the design and operation of our disclosure
  controls and procedures provided reasonable assurance that the disclosure controls
  and procedures are effective to accomplish their objectives.

INTERNAL CONTROLS. There were no changes in
the Companys internal control over financial reporting that occurred during
the Companys most recent fiscal quarter that materially affected, or are
reasonably likely to materially affect, the Companys internal control over
financial reporting.

16

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PART II -
OTHER INFORMATION

ITEM
1.  LEGAL PROCEEDINGS

From time to time, the Company is involved in
legal proceedings in the ordinary course of our business operations. Although
there can be no assurance as to the outcome or effect of any legal proceedings
to which the Company is a party, the Company does not believe, based on
currently available information, that the ultimate liabilities, if any, arising
from any such legal proceedings would have a material adverse impact on our
business, financial condition, results of operations or cash flows.

There have been no developments in ongoing legal proceedings nor
  have any material litigations been commenced or threatened since the prior descriptions
  in Note 16 to the Consolidated Financial Statements in the 2005 Form 10-K, and
  the Legal Proceedings section thereto.

**ITEM 1A. RISK FACTORS**

No material changes since the 2005 Form 10-K.

ITEM
  2.**UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

Not Applicable.

ITEM 3.
DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

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

Not Applicable.

ITEM 5.
OTHER INFORMATION

Not Applicable.

ITEM 6.
EXHIBITS

(a) Exhibits

|        |  |                                                                                                                |  | 
|------- |  | -------------------------------------------------------------------------------------------------------------- |  | 
|Exhibit |  | Description                                                                                                   
|        |  |                                                                                                                |  | 
|        |  |                                                                                                               
|31.1    |  | Certification of Chief Executive
        Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002    
|        |  |                                                                                                               
|31.2    |  | Certification of Principal Financial
        Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                               
|32.1    |  | Certification of Chief Executive
        Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002    
|        |  |                                                                                                               
|32.2    |  | Certification of Principal Financial
        Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

17

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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.

|                        |                              |                             
|----------------------- | ---------------------------- | ----------------------------
|                        | GLOBIX CORPORATION          
|                        |                             
|                        | By:
  /S/ Peter K. Stevenson
|                        |                              |                             
|                        |                              | Peter K. Stevenson,         
|                        |                              | Chief Executive Officer     
|                        |                             
|Date: February 14, 2006 |                             
|                        | By:
  /S/ Henry J. Conicelli
|                        |                              |                             
|                        |                              | Henry J. Conicelli          
|                        |                              | Principal Accounting Officer
|                        |                             
|Date: February 14, 2006 |                             
|                        | By:
  /S/ Eric J. Sandman   
|                        |                              |                             
|                        |                              | Eric J. Sandman             
|                        |                              | Principal Financial Officer 
|                        |                             
|Date: February 14, 2006 |                             

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