SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,
D.C. 20549

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FORM
10-Q

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|                                             |                                                                                           
|-------------------------------------------- | ------------------------------------------------------------------------------------------
|x                                            | QUARTERLY
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|                                             |                                                                                           
|FOR THE QUARTERLY PERIOD ENDED June 30, 2006
|                                             |                                                                                           
|OR                                          
|                                             |                                                                                           
|o                                            | TRANSITION
  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                                                     |  | (I.R.S. EMPLOYER   
|INCORPORATION OR ORGANIZATION)                                                      |  | 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 August 8,
  2006 was 48,707,212.

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GLOBIX CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

|               |                                                                                                                                                                           |    |      | 
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | ---- | 
|               |                                                                                                                                                                           |    | PAGE | 
|               |                                                                                                                                                                           |    |      | 
|Part I         | Financial Information                                                                                                                                                     |    |      | 
|               |                                                                                                                                                                           |    |      | 
|Item 1         | Consolidated
  Balance Sheets  As of June 30, 2006 (unaudited) and September 30, 2005                                                                                    |    | 1    | 
|               | Interim
  Consolidated Statements of Operations (unaudited)  For the Three and Nine
  Months Ended June 30, 2006 and for the Three and Nine Months Ended June 30,
  2005 |    | 2    | 
|               |                                                                                                                                                                           |    |      | 
|               | Interim
  Statements of Changes in Stockholders Equity and Comprehensive Loss
  (unaudited) for the Nine Months Ended June 30, 2006                                      |    | 3    | 
|               |                                                                                                                                                                           |    |      | 
|               | Interim Consolidated
  Statements of Cash Flows (unaudited)  For the Nine Months Ended June 30,
  2006 and for the Nine Months Ended June 30, 2005                       |    | 4    | 
|               |                                                                                                                                                                           |    |      | 
|               | Notes to
  the Interim Unaudited Consolidated Financial Statements                                                                                                        |    | 5    | 
|Item 2         | Managements
  Discussion and Analysis of Financial Condition and Results of Operations                                                                                   |    | 14   | 
|Item 3         | Quantitative
  and Qualitative Disclosures About Market Risk                                                                                                              |    | 22   | 
|Item 4         | Controls
  and Procedures                                                                                                                                                 |    | 22   | 
|               |                                                                                                                                                                           |    |      | 
|Part II        | Other
  Information                                                                                                                                                       |    |      | 
|Item 1.        | Legal
  Proceedings                                                                                                                                                       |    | 23   | 
|Item 1A.       | Risk
  Factors                                                                                                                                                            |    | 23   | 
|Item 2.        | Unregistered
  Sales of Equity Securities and Use of Proceeds                                                                                                             |    | 23   | 
|Item 3.        | Defaults
  Upon Senior Securities                                                                                                                                         |    | 23   | 
|Item 4.        | Submission
  of Matters to a Vote of Security Holders                                                                                                                     |    | 23   | 
|Item 5.        | Other
  Information                                                                                                                                                       |    | 23   | 
|Item 6.        | Exhibits                                                                                                                                                                  |    | 24   | 
|               |                                                                                                                                                                           |    |      | 
|Signatures     |                                                                                                                                                                           | 24 |     
|Certifications |                                                                                                                                                                           |    |     

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GLOBIX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | -------- | --------------------- | - | -------- | -
|                                                                                                                                                                            |  | JUNE 30,
  2006 |          | SEPTEMBER
  30,  2005 |  
|                                                                                                                                                                            |  | (Unaudited)     |          |                       |   |         
|ASSETS                                                                                                                                                                      |  |                 |          |                       |   |          |  
|Current assets:                                                                                                                                                             |  |                 |          |                       |   |          |  
|Cash and cash equivalents                                                                                                                                                   |  | $               | 6,027    |                       | $ | 9,011    |  
|Short-term investments                                                                                                                                                      |  |                 |         |                       |   | 65       |  
|Accounts receivable, net of allowance for doubtful accounts of $2,193
  and $1,950, respectively                                                                            |  |                 | 12,043   |                       |   | 11,174   |  
|Prepaid expenses and other
  current assets                                                                                                                                 |  |                 | 5,657    |                       |   | 4,007    |  
|Restricted cash                                                                                                                                                             |  |                 | 2,601    |                       |   | 2,559    |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|Total current assets                                                                                                                                                        |  |                 | 26,328   |                       |   | 26,816   |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|Investments, restricted                                                                                                                                                     |  |                 | 9,826    |                       |   | 9,810    |  
|Property, plant and
  equipment, net                                                                                                                                        |  |                 | 207,480  |                       |   | 206,230  |  
|Intangible assets, net of accumulated amortization of $6,896 and
  $5,598, respectively                                                                                     |  |                 | 8,959    |                       |   | 10,257   |  
|Other assets                                                                                                                                                                |  |                 | 3,639    |                       |   | 4,540    |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|Total assets                                                                                                                                                                |  | $               | 256,232  |                       | $ | 257,653  |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|LIABILITIES AND
  STOCKHOLDERS EQUITY                                                                                                                                      |  |                 |          |                       |   |          |  
|Current liabilities:                                                                                                                                                        |  |                 |          |                       |   |          |  
|Current portion of capital
  lease obligation and mortgage payable                                                                                                          |  | $               | 523      |                       | $ | 564      |  
|Accounts payable                                                                                                                                                            |  |                 | 11,868   |                       |   | 11,769   |  
|Accrued liabilities                                                                                                                                                         |  |                 | 18,451   |                       |   | 17,418   |  
|Deferred revenue                                                                                                                                                            |  |                 | 5,092    |                       |   | 5,443    |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|Total current liabilities                                                                                                                                                   |  |                 | 35,934   |                       |   | 35,194   |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|Capital lease obligations,
  net of current portion                                                                                                                         |  |                 | 94       |                       |   | 204      |  
|Mortgage payable, net of
  current portion                                                                                                                                  |  |                 | 18,993   |                       |   | 19,270   |  
|11% Senior Notes                                                                                                                                                            |  |                 | 74,875   |                       |   | 67,455   |  
|9% Senior Notes                                                                                                                                                             |  |                 | 5,000    |                       |   |         |  
|Accrued interest - Senior
  Notes                                                                                                                                           |  |                 | 1,489    |                       |   | 3,110    |  
|Deferred Revenue                                                                                                                                                            |  |                 | 14,576   |                       |   | 15,903   |  
|Other long term
  liabilities                                                                                                                                               |  |                 | 8,839    |                       |   | 9,208    |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|Total liabilities                                                                                                                                                           |  |                 | 159,800  |                       |   | 150,344  |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|Commitments and contingencies                                                                                                                                               |  |                 |          |                       |   |          |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|CUMULATIVE CONVERTIBLE
  PREFERRED STOCK                                                                                                                                    |  |                 | 13,505   |                       |   | 13,006   |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|STOCKHOLDERS EQUITY:                                                                                                                                                       |  |                 |          |                       |   |          |  
|Common stock, $.01 par value; 500,000,000 shares authorized;
  48,707,216 and 48,697,465 issued and outstanding, as of June 30, 2006 and
  September 30, 2005, respectively |  |                 | 487      |                       |   | 487      |  
|Additional paid-in capital                                                                                                                                                  |  |                 | 209,494  |                       |   | 207,314  |  
|Accumulated other
  comprehensive income                                                                                                                                    |  |                 | 5,862    |                       |   | 5,197    |  
|Accumulated deficit                                                                                                                                                         |  |                 | (132,916 | )                     |   | (118,695 | )
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|Total stockholders equity                                                                                                                                                  |  |                 | 82,927   |                       |   | 94,303   |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  
|Total liabilities, cumulative convertible preferred stock and
  stockholders equity                                                                                        |  | $               | 256,232  |                       | $ | 257,653  |  
|                                                                                                                                                                            |  |                 |          |                       |   |          |  

The accompanying notes are an integral part of these 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 |            | FOR THE
  NINE MONTHS ENDED |  
|                                                                      |  | JUNE 30,
  2006              |            | JUNE 30, 
  2005            |   | JUNE 30, 
  2006 |   | JUNE 30, 
  2005 |           
|                                                                      |  |                              |            |                             |   |                  |   |                  |           
|Revenue, net                                                          |  | $                            | 33,415     |                             | $ | 29,215           |   | $                | 97,213     |   | $ | 65,776     |  
|Operating costs and expenses:                                         |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|Cost of revenue (excluding depreciation and amortization shown
below) |  |                              | 18,962     |                             |   | 16,751           |   |                  | 53,546     |   |   | 37,869     |  
|Selling, general and administrative                                   |  |                              | 9,193      |                             |   | 10,490           |   |                  | 32,690     |   |   | 26,996     |  
|Depreciation and amortization                                         |  |                              | 6,458      |                             |   | 5,985            |   |                  | 18,046     |   |   | 14,000     |  
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|Total operating costs and expenses                                    |  |                              | 34,613     |                             |   | 33,226           |   |                  | 104,282    |   |   | 78,865     |  
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|Loss from operations                                                  |  |                              | (1,198     | )                           |   | (4,011           | ) |                  | (7,069     | ) |   | (13,089    | )
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|Interest and financing expense                                        |  |                              | (2,929     | )                           |   | (2,282           | ) |                  | (7,719     | ) |   | (7,126     | )
|Interest income                                                       |  |                              | 126        |                             |   | 111              |   |                  | 356        |   |   | 339        |  
|Other (expense) income, net                                           |  |                              | 229        |                             |   | 111              |   |                  | 710        |   |   | (561       | )
|Gain (loss) on discharge of debt                                      |  |                              |           |                             |   |                 |   |                  |           |   |   | (3,182     | )
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|Net loss                                                              |  |                              | (3,772     | )                           |   | (6,071           | ) |                  | (13,722    | ) |   | (23,619    | )
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|Dividends and accretion on preferred stock                            |  |                              | 169        |                             |   | 202              |   |                  | 499        |   |   | 202        |  
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|Net loss attributable to common stock                                 |  | $                            | (3,941     | )                           | $ | (6,273           | ) | $                | (14,221    | ) | $ | (23,821    | )
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|Basic and diluted loss per common share                               |  | $                            | (0.08      | )                           | $ | (0.13            | ) | $                | (0.29      | ) | $ | (0.79      | )
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  
|Weighted average common shares outstanding  basic and
diluted        |  |                              | 48,705,375 |                             |   | 48,678,296       |   |                  | 48,700,102 |   |   | 30,030,850 |  
|                                                                      |  |                              |            |                             |   |                  |   |                  |            |   |   |            |  

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

2

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GLOBIX CORPORATION AND SUBSIDIARIES

STATEMENTS OF CHANGES IN
STOCKHOLDERS EQUITY AND COMPREHENSIVE LOSS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

(UNAUDITED)

|                                         |  |              |            |        |   |                                |  |                         |         |                                              |   |                       |  |                                |       |   |   |          |   |   |        |  
|---------------------------------------- |  | ------------ | ---------- | ------ | - | ------------------------------ |  | ----------------------- | ------- | -------------------------------------------- | - | --------------------- |  | ------------------------------ | ----- | - | - | -------- | - | - | ------ | -
|                                         |  |              |            |        |   | ADDITIONAL
  PAID-IN
  CAPITAL |  | DEFERRED
  COMPENSATION |         | ACCUMULATED
  OTHER
  COMPREHENSIVE
  INCOME |   | ACCUMULATED
  DEFICIT |  | TOTAL
  STOCKHOLDERS
  EQUITY |      
|                                         |  | COMMON STOCK |            |        |   |                                |  |                        
|                                         |  |              |            |        |   |                                |  |                        
|                                         |  | SHARES       |            | AMOUNT |   |                                |  |                         |         |                                             
|                                         |  |              |            |        |   |                                |  |                         |         |                                              |   |                       |  |                                |      
|Balance, September 30, 2005              |  |              | 48,697,465 |        | $ | 487                            |  | $                       | 207,314 |                                              | $ |                      |  | $                              | 5,197 |   | $ | (118,695 | ) | $ | 94,303 |  
|Stock-based compensation                 |  |              |           |        |   |                               |  |                         | 1,656   |                                              |   |                      |  |                                |      |   |   |         |   |   | 1,656  |  
|Amortization of warrants                 |  |              |           |        |   |                               |  |                         | 96      |                                              |   |                      |  |                                |      |   |   |         |   |   | 96     |  
|Comprehensive Loss:                      |  |              |            |        |   |                                |  |                         |         |                                              |   |                       |  |                                |       |   |   |          |   |   |        |  
|Net loss                                 |  |              |           |        |   |                               |  |                         |        |                                              |   |                      |  |                                |      |   |   | (6,046   | ) |   |       |  
|Accretion on preferred stock             |  |              |           |        |   |                               |  |                         |        |                                              |   |                      |  |                                |      |   |   | (164     | ) |   |       |  
|Foreign currency translation adjustments |  |              |           |        |   |                               |  |                         |        |                                              |   |                      |  |                                | (567  | ) |   |         |   |   |        |  
|Total Comprehensive Loss                 |  |              |           |        |   |                               |  |                         |        |                                              |   |                      |  |                                |      |   |   |         |   |   | (6,777 | )
|                                         |  |              |            |        |   |                                |  |                         |         |                                              |   |                       |  |                                |       |   |   |          |   |   |        |  
|Balance, December 31, 2005               |  |              | 48,697,465 |        |   | 487                            |  |                         | 209,066 |                                              |   |                      |  |                                | 4,630 |   |   | (124,905 | ) |   | 89,278 |  
|Stock-based compensation                 |  |              |           |        |   |                               |  |                         | 276     |                                              |   |                      |  |                                |      |   |   |         |   |   | 276    |  
|Amortization of warrants                 |  |              |           |        |   |                               |  |                         | 96      |                                              |   |                      |  |                                |      |   |   |         |   |   | 96     |  
|Comprehensive Loss:                      |  |              |            |        |   |                                |  |                         |         |                                              |   |                       |  |                                |       |   |   |          |   |   |        |  
|Net loss                                 |  |              |           |        |   |                               |  |                         |        |                                              |   |                      |  |                                |      |   |   | (3,904   | ) |   |       |  
|Accretion on preferred stock             |  |              |           |        |   |                               |  |                         |        |                                              |   |                      |  |                                |      |   |   | (166     | ) |   |       |  
|Foreign currency translation adjustments |  |              |           |        |   |                               |  |                         |        |                                              |   |                      |  |                                | 252   |   |   |         |   |   |       |  
|Total Comprehensive Loss                 |  |              |           |        |   |                               |  |                         |        |                                              |   |                      |  |                                |      |   |   |         |   |   | (3,818 | )
|                                         |  |              |            |        |   |                                |  |                         |         |                                              |   |                       |  |                                |       |   |   |          |   |   |        |  
|Balance, March 31, 2006                  |  |              | 48,697,465 |        |   | 487                            |  |                         | 209,438 |                                              |   |                      |  |                                | 4,882 |   |   | (128,975 | ) |   | 85,832 |  
|Exercise of stock options                |  |              | 9,751      |        |   |                               |  |                         | 4       |                                              |   |                      |  |                                |      |   |   |         |   |   | 4      |  
|Stock-based compensation                 |  |              |           |        |   |                               |  |                         | 20      |                                              |   |                      |  |                                |      |   |   |         |   |   | 20     |  
|Amortization of warrants                 |  |              |           |        |   |                               |  |                         | 32      |                                              |   |                      |  |                                |      |   |   |         |   |   | 32     |  
|Comprehensive Loss:                      |  |              |            |        |   |                                |  |                         |         |                                              |   |                       |  |                                |       |   |   |          |   |   |        |  
|Net loss                                 |  |              |           |        |   |                               |  |                         |        |                                              |   |                      |  |                                |      |   |   | (3,772   | ) |   |        |  
|Accretion on preferred stock             |  |              |           |        |   |                               |  |                         |        |                                              |   |                      |  |                                |      |   |   | (169     | ) |   |        |  
|Foreign currency translation adjustments |  |              |           |        |   |                               |  |                         |        |                                              |   |                      |  |                                | 980   |   |   |         |   |   |        |  
|Total Comprehensive Loss                 |  |              |           |        |   |                               |  |                         |        |                                              |   |                      |  |                                |      |   |   |         |   |   | (2,961 | )
|                                         |  |              |            |        |   |                                |  |                         |         |                                              |   |                       |  |                                |       |   |   |          |   |   |        |  
|Balance, June 30, 2006                   |  |              | 48,707,216 |        | $ | 487                            |  | $                       | 209,494 |                                              | $ |                      |  | $                              | 5,862 |   | $ | (132,916 | ) | $ | 82,927 |  
|                                         |  |              |            |        |   |                                |  |                         |         |                                              |   |                       |  |                                |       |   |   |          |   |   |        |  

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

3

---



GLOBIX CORPORATION AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS
OF CASH FLOWS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(UNAUDITED)

|                                                                                                    |  |                                   |         |               |   |         |  
|--------------------------------------------------------------------------------------------------- |  | --------------------------------- | ------- | ------------- | - | ------- | -
|                                                                                                    |  | FOR
        THE NINE MONTHS ENDED |        
|                                                                                                    |  | JUNE 30, 2006                     |         | JUNE 30, 2005 |  
|Cash Flows From Operating
        Activities                                                        |  |                                   |         |               |   |         |  
|Net Loss                                                                                            |  | $                                 | (13,722 | )             | $ | (23,619 | )
|Adjustments to reconcile
        net loss to net cash provided by (used in) operating activities:   |  |                                   |         |               |   |         |  
|Depreciation and amortization                                                                       |  |                                   | 18,046  |               |   | 14,000  |  
|Provision for uncollectible
        receivables                                                     |  |                                   | 61      |               |   | 260     |  
|Loss (gain) on debt discharge                                                                       |  |                                   |        |               |   | 3,182   |  
|Loss on impairment of
        assets                                                                |  |                                   | 42      |               |   |        |  
|Loss on sale of equipment                                                                           |  |                                   |        |               |   | 913     |  
|Expense in connection
        with issuance of warrants                                             |  |                                   | 224     |               |   | 65      |  
|Stock-based compensation                                                                            |  |                                   | 1,952   |               |   |        |  
|Amortization
        of deferred compensation and issuance of common stock in litigation settlement |  |                                   |        |               |   | 350     |  
|Changes in assets and liabilities (net
        of acquisition):                                     |  |                                   |         |               |   |         |  
|Decrease (increase) in
        accounts receivable                                                  |  |                                   | (819    | )             |   | (4,205  | )
|Decrease (increase) in prepaid expenses
        and other current assets                            |  |                                   | (1,578  | )             |   | 924     |  
|Decrease (increase) in
        other assets                                                         |  |                                   | 902     |               |   | (369    | )
|Increase (decrease) in accounts payable                                                             |  |                                   | 34      |               |   | 652     |  
|Increase (decrease) in
        accrued liabilities                                                  |  |                                   | 534     |               |   | (830    | )
|Increase in accrued interest                                                                        |  |                                   | 5,799   |               |   | 5,644   |  
|Other                                                                                               |  |                                   | (1,960  | )             |   | (291    | )
|                                                                                                    |  |                                   |         |               |   |         |  
|                                                                                                    |  |                                   |         |               |   |         |  
|Net Cash Provided by (Used in) Operating
        Activities                                         |  |                                   | 9,515   |               |   | (3,324  | )
|                                                                                                    |  |                                   |         |               |   |         |  
|                                                                                                    |  |                                   |         |               |   |         |  
|Cash Flows From Investing
        Activities                                                        |  |                                   |         |               |   |         |  
|Proceeds from (investments in) short-term
        and long-term investments                         |  |                                   | 65      |               |   | 4,243   |  
|Proceeds from restricted
        cash and investments                                               |  |                                   | 13      |               |   | 223     |  
|Proceeds from sale of marketable securities                                                         |  |                                   |        |               |   | 594     |  
|Proceeds from fiber optic
        exchange                                                          |  |                                   | 1,960   |               |   |        |  
|Net cash proceeds from Neon acquisition
        (note 3)                                            |  |                                   |        |               |   | 2,726   |  
|Purchase of property,
        plant and equipment                                                   |  |                                   | (19,174 | )             |   | (11,752 | )
|                                                                                                    |  |                                   |         |               |   |         |  
|                                                                                                    |  |                                   |         |               |   |         |  
|Net Cash Used in Investing Activities                                                               |  |                                   | (17,136 | )             |   | (3,966  | )
|                                                                                                    |  |                                   |         |               |   |         |  
|                                                                                                    |  |                                   |         |               |   |         |  
|Cash Flows From Financing
        Activities                                                        |  |                                   |         |               |   |         |  
|Issuance of 9% Senior Notes                                                                         |  |                                   | 5,000   |               |   |        |  
|Proceeds from exercising
        of options                                                         |  |                                   | 4       |               |   |        |  
|Repayment of mortgage payable and capital
        lease obligation                                  |  |                                   | (431    | )             |   | (559    | )
|                                                                                                    |  |                                   |         |               |   |         |  
|                                                                                                    |  |                                   |         |               |   |         |  
|Net Cash Provided by
        (Used in) Financing Activities                                         |  |                                   | 4,573   |               |   | (559    | )
|                                                                                                    |  |                                   |         |               |   |         |  
|                                                                                                    |  |                                   |         |               |   |         |  
|Effect of Exchange Rates Changes on Cash
        and Cash Equivalents                               |  |                                   | 64      |               |   | 201     |  
|                                                                                                    |  |                                   |         |               |   |         |  
|                                                                                                    |  |                                   |         |               |   |         |  
|Decrease in Cash and
        Cash Equivalents                                                       |  |                                   | (2,984  | )             |   | (7,648  | )
|Cash and Cash Equivalents, Beginning of
        Period                                              |  |                                   | 9,011   |               |   | 12,075  |  
|                                                                                                    |  |                                   |         |               |   |         |  
|                                                                                                    |  |                                   |         |               |   |         |  
|Cash and Cash Equivalents,
        End Period                                                       |  | $                                 | 6,027   |               | $ | 4,427   |  
|                                                                                                    |  |                                   |         |               |   |         |  
|                                                                                                    |  |                                   |         |               |   |         |  
|Supplemental disclosure of cash flow information:                                                   |  |                                   |         |               |   |         |  
|Issuance of 11% Senior
        Notes as payable interest in kind                                    |  | $                                 | 7,420   |               | $ | 6,685   |  
|                                                                                                    |  |                                   |         |               |   |         |  
|Non cash financing activities:                                                                      |  |                                   |         |               |   |         |  
|                                                                                                    |  |                                   |         |               |   |         |  
|Capital leases entered
        into                                                                 |  | $                                 |        |               | $ | 327     |  
|                                                                                                    |  |                                   |         |               |   |         |  

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

4

---



GLOBIX
CORPORATION AND SUBSIDIARIES NOTES 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 nine month period ended June
  30, 2006, the Company had a net loss attributable to common stockholders of
  $14,221 and an accumulated deficit of $132,916. 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. However, there can be no assurance that we will be
  successful in achieving sufficient profitability, attracting new customers,
  increasing our revenue levels or reducing our outstanding indebtedness. If the
  Company fails to generate sufficient cash flow, the Company may have to take
  drastic steps to meet its liquidity needs. Such steps may include the reduction
  of our headcount, the consolidation, elimination or sale of facilities, the
  termination of low margin customers and the negotiation with our creditors to
  restructure our indebtedness, including, 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 June 30, 2006 and the nine 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 nine month period ended June 30, 2006 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

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

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

5

---



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

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 and nine
months ended June 30, 2005:

|                                                                                                                                                |  |                                              |        |                                             |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------- | ------ | ------------------------------------------- | - | ------- | -
|                                                                                                                                                |  | For the Three
  Months Ended
  June 30, 2005 |        | For the Nine
  Months Ended
  June 30, 2005 |  
|Net loss, as reported attributable to
  common stockholders                                                                                     |  | $                                            | (6,273 | )                                           | $ | (23,821 | )
|Add:
        Stock-based employee compensation expense included in reported net loss                                                            |  |                                              | 35     |                                             |   | 9       |  
|                                                                                                                                                |  |                                              |        |                                             |   |         |  
|Deduct: Total stock-based employee
  compensation expense determined under fair value based method for all awards,
  net of related tax effects |  |                                              | (107   | )                                           |   | (344    | )
|                                                                                                                                                |  |                                              |        |                                             |   |         |  
|                                                                                                                                                |  |                                              |        |                                             |   |         |  
|Pro forma net loss attributable to common
  stockholders                                                                                        |  | $                                            | (6,345 | )                                           | $ | (24,156 | )
|                                                                                                                                                |  |                                              |        |                                             |   |         |  
|                                                                                                                                                |  |                                              |        |                                             |   |         |  
|                                                                                                                                                |  |                                              |        |                                             |   |         |  
|Loss per share attributable to common
  stockholders                                                                                            |  |                                              |        |                                             |   |         |  
|Basic and diluted earnings per share  as
  reported                                                                                            |  | $                                            | (0.13  | )                                           | $ | (0.79   | )
|                                                                                                                                                |  |                                              |        |                                             |   |         |  
|                                                                                                                                                |  |                                              |        |                                             |   |         |  
|Basic and diluted earnings per share  pro
  forma                                                                                              |  | $                                            | (0.13  | )                                           | $ | (0.81   | )
|                                                                                                                                                |  |                                              |        |                                             |   |         |  
|                                                                                                                                                |  |                                              |        |                                             |   |         |  

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 nine months ended June
30, 2006 was $1,952 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 with the following weighted-average
  assumptions:



|                                 |  | FOR
        THE THREE MONTHS
      ENDED |  | FOR
        THE NINE MONTHS
      ENDED | 
|-------------------------------- |  | ---------------------------------------- |  | --------------------------------------- | 
|                                 |  |                                          |  |                                         | 
|                                 |  | JUNE 30,
        2006                    |  | JUNE 30,
        2005                   | 
|                                 |  |                                          |  |                                         | 
|Expected
        life (in years) |  | --                                       |  | --                                      | 
|Risk-free
        interest rate  |  | --                                       |  | --                                      | 
|Volatility                       |  | --                                       |  | --                                      | 
|Dividend
        yield           |  | --                                       |  | --                                      | 

During the nine months ended June 30, 2006, the Company granted
  approximately 1,143,000 options with an exercise price of $2.75 per share to
  various employees. Included in this figure were options granted to Mr. Lodge
  during the three-month period ended December 31, 2005 to purchase 1,000,000
  shares of its common stock.

Stock based
compensation expense for the three months ended June 30, 2006 was $20. No
options to purchase the Companys stock were granted during this same period.

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.

In February
2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial
Instruments  an amendment of FASB Statements No. 133 and 140. SFAS No. 155
allows companies to elect to measure at fair value entire financial instruments
containing embedded derivatives that would otherwise have to be accounted for
separately. It also requires companies to identify interests in securitized
financial assets that are freestanding derivatives or contain embedded
derivatives that would have to be accounted for separately, clarifies which
interest- and principal-only strips are subject to SFAS No. 133, and amends
SFAS No. 140 to revise the conditions of a qualifying special purpose entity
due to the new requirement to identify whether interests in securitized
financial assets are freestanding derivatives or contain embedded derivatives.
SFAS No. 155 is effective for all financial instruments acquired, issued

6

---



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

or subject to
a remeasurement event after the beginning of a companys first fiscal year that
begins after September 15, 2006. The Company does not expect adoption of SFAS No.
155 to have a material effect on its results of operations or financial
position.

In March 2006,
the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets 
an amendment of FASB Statement No. 140. SFAS No. 156 requires the recognition
of a servicing asset or liability each time a company undertakes an obligation
to service a financial asset in certain situations. It requires all separately
recognized servicing assets and liabilities to be initially measured at fair
value, if practical. SFAS No. 156 is effective as of the beginning of a companys
first fiscal year that begins after September 15, 2006. The Company is
currently evaluating the implementation of SFAS No. 156 and whether it will
have a material impact on our financial position, results of operations or cash
flows.

NOTE 3  ACQUISITION OF NEON COMMUNICATIONS,
INC.

On March 7,
2005, Globix completed its acquisition of NEON 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 3,381 shares of stock options and warrants with a fair value of $7,928 and
approximately $3,439 of other direct acquisition costs. NEON owns and operates
a high bandwidth fiber optic network, extending from Portland, ME to
Washington, DC. 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, including Boston,
New York, Philadelphia, Newark, Baltimore, Washington, DC, Portland,
Portsmouth, Springfield, Worcester, Albany, White Plains, Providence, Hartford,
Hackensack, Reston, Virginia and smaller communities along our network routes.
The final 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                    |  |   | 1,228   |  
|Restricted
  cash and investments acquired             |  |   | 7,501   |  
|Fair value
  of property, plant and equipment acquired |  |   | 117,292 |  
|Identifiable
  intangible assets acquired              |  |   | 4,500   |  
|Other assets
  acquired                                |  |   | 3,625   |  
|Accounts payable
  and accrued liabilities assumed     |  |   | (11,949 | )
|Deferred
  revenue assumed                             |  |   | (17,363 | )
|Other
  liabilities assumed                            |  |   | (2,064  | )
|                                                       |  |   |         |  
|                                                       |  | $ | 112,862 |  
|                                                       |  |   |         |  

7

---



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

The following
unaudited pro forma combined results of operations assume that the acquisition
occurred on October 1, 2005. This unaudited information should not be relied
upon as necessarily being indicative of future results.

|                                                                 |  |                           |            |  
|---------------------------------------------------------------- |  | ------------------------- | ---------- | -
|                                                                 |  | FOR THE NINE MONTHS ENDED |           
|                                                                 |  |                           |           
|                                                                 |  | JUNE 30,2005              |           
|                                                                 |  |                           |           
|Revenue                                                          |  | $                         | 87,120     |  
|Net loss                                                         |  |                           | (24,428    | )
|                                                                 |  |                           |            |  
|Basic and
  diluted net income per common share                  |  |                           |            |  
|Pro-forma                                                        |  | $                         | (0.50      | )
|                                                                 |  |                           |            |  
|Weighted
  average common shares outstanding  basic and diluted |  |                           | 48,639,631 |  
|                                                                 |  |                           |            |  

The following
unusual and non-recurring items were included in the pro forma results:

|                                  |  |                             |        |  
|--------------------------------- |  | --------------------------- | ------ | -
|                                  |  | FOR THE NINE
  MONTHS ENDED |       
|                                  |  |                             |       
|                                  |  | JUNE 30,2005                |       
|                                  |  |                             |       
|Loss on debt
  discharge (Globix) |  | $                           | (3,182 | )
|                                  |  |                             |        |  

NOTE 4SEGMENT INFORMATION

Since 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.

Operating
results and assets information by reportable segment:

|                |  |                               |        |                              |   |              |   |                  |         |   |   |         |  
|--------------- |  | ----------------------------- | ------ | ---------------------------- | - | ------------ | - | ---------------- | ------- | - | - | ------- | -
|                |  | FOR THE THREE MONTHS 
  ENDED |        | FOR THE NINE MONTHS 
  ENDED |  
|                |  |                               |        |                              |  
|                |  | JUNE 30, 
  2006              |        | JUNE 30, 
  2005             |   | JUNE 30,2006 |   | JUNE 30, 
  2005 |        
|                |  |                               |        |                              |   |              |   |                  |        
|Revenues:       |  |                               |        |                              |   |              |   |                  |         |   |   |         |  
|Globix          |  | $                             | 16,292 |                              | $ | 15,973       |   | $                | 48,612  |   | $ | 49,311  |  
|NEON            |  |                               | 17,123 |                              |   | 13,242       |   |                  | 48,601  |   |   | 16,465  |  
|Corporate       |  |                               |       |                              |   |             |   |                  |        |   |   |        |  
|                |  |                               |        |                              |   |              |   |                  |         |   |   |         |  
|Consolidated    |  | $                             | 33,415 |                              | $ | 29,215       |   | $                | 97,213  |   | $ | 65,776  |  
|                |  |                               |        |                              |   |              |   |                  |         |   |   |         |  
|Operating loss: |  |                               |        |                              |   |              |   |                  |         |   |   |         |  
|Globix          |  | $                             | 199    |                              | $ | (1,166       | ) | $                | (236    | ) | $ | (4,685  | )
|NEON            |  |                               | 1,550  |                              |   | 1,004        |   |                  | 5,855   |   |   | 802     |  
|Corporate       |  |                               | (2,947 | )                            |   | (3,849       | ) |                  | (12,688 | ) |   | (9,206  | )
|                |  |                               |        |                              |   |              |   |                  |         |   |   |         |  
|Consolidated    |  | $                             | (1,198 | )                            | $ | (4,011       | ) | $                | (7,069  | ) | $ | (13,089 | )
|                |  |                               |        |                              |   |              |   |                  |         |   |   |         |  

8

---



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

|              |  |                  |         |                  |   |         | 
|------------- |  | ---------------- | ------- | ---------------- | - | ------- | 
|              |  | JUNE 30, 
  2006 |         | JUNE 30, 
  2005 |  
|              |  |                  |         |                  |  
|Total assets: |  |                  |         |                  |   |         | 
|Globix        |  | $                | 110,311 |                  | $ | 119,830 | 
|NEON          |  |                  | 145,921 |                  |   | 142,284 | 
|              |  |                  |         |                  |   |         | 
|Consolidated  |  | $                | 256,232 |                  | $ | 262,114 | 
|              |  |                  |         |                  |   |         | 
|             
|              |  | JUNE 30,
  2006  |         | JUNE 30,
  2005  |  
|              |  |                  |         |                  |  
|Fixed assets: |  |                  |         |                  |   |         | 
|Globix        |  | $                | 85,079  |                  | $ | 90,767  | 
|NEON          |  |                  | 122,401 |                  |   | 116,928 | 
|              |  |                  |         |                  |   |         | 
|Consolidated  |  | $                | 207,480 |                  | $ | 207,695 | 
|              |  |                  |         |                  |   |         | 

9

---



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

Operating
results and assets information by geographic area:

|                             |  |                               |        |                              |   |                 |   |                 |        |   |   |         |  
|---------------------------- |  | ----------------------------- | ------ | ---------------------------- | - | --------------- | - | --------------- | ------ | - | - | ------- | -
|                             |  | FOR THE THREE MONTHS 
  ENDED |        | FOR THE NINE MONTHS 
  ENDED |  
|                             |  |                               |        |                              |  
|                             |  | JUNE 30,
  2006               |        | JUNE 30,
  2005              |   | JUNE 30,
  2006 |   | JUNE 30,
  2005 |       
|                             |  |                               |        |                              |   |                 |   |                 |       
|Revenues:                    |  |                               |        |                              |   |                 |   |                 |        |   |   |         |  
|United States                |  | $                             | 26,417 |                              | $ | 22,206          |   | $               | 77,375 |   | $ | 43,714  |  
|Substantially United Kingdom |  |                               | 6,998  |                              |   | 7,009           |   |                 | 19,838 |   |   | 22,062  |  
|                             |  |                               |        |                              |   |                 |   |                 |        |   |   |         |  
|Consolidated                 |  | $                             | 33,415 |                              | $ | 29,215          |   | $               | 97,213 |   | $ | 65,776  |  
|                             |  |                               |        |                              |   |                 |   |                 |        |   |   |         |  
|Operating loss:              |  |                               |        |                              |   |                 |   |                 |        |   |   |         |  
|United States                |  | $                             | (1,854 | )                            | $ | (4,586          | ) | $               | (8,946 | ) | $ | (15,376 | )
|Substantially United Kingdom |  |                               | 656    |                              |   | 575             |   |                 | 1,877  |   |   | 2,287   |  
|                             |  |                               |        |                              |   |                 |   |                 |        |   |   |         |  
|Consolidated                 |  | $                             | (1,198 | )                            | $ | (4,011          | ) | $               | (7,069 | ) | $ | (13,089 | )
|                             |  |                               |        |                              |   |                 |   |                 |        |   |   |         |  

|                             |  |                 |         |                 |   |         | 
|---------------------------- |  | --------------- | ------- | --------------- | - | ------- | 
|                             |  | JUNE 30,
  2006 |         | JUNE 30,
  2005 |  
|                             |  |                 |         |                 |  
|Total assets:                |  |                 |         |                 |   |         | 
|United States                |  | $               | 222,032 |                 | $ | 226,788 | 
|Substantially United Kingdom |  |                 | 34,200  |                 |   | 35,326  | 
|                             |  |                 |         |                 |   |         | 
|Consolidated                 |  | $               | 256,232 |                 | $ | 262,114 | 
|                             |  |                 |         |                 |   |         | 

|                             |  |                  |         |                  |   |         | 
|---------------------------- |  | ---------------- | ------- | ---------------- | - | ------- | 
|                             |  | JUNE 30, 
  2006 |         | JUNE 30, 
  2005 |  
|                             |  |                  |         |                  |  
|Fixed assets:                |  |                  |         |                  |   |         | 
|United States                |  | $                | 183,753 |                  | $ | 182,542 | 
|Substantially United Kingdom |  |                  | 23,727  |                  |   | 25,153  | 
|                             |  |                  |         |                  |   |         | 
|                             |  |                  |         |                  |   |         | 
|Consolidated                 |  | $                | 207,480 |                  | $ | 207,695 | 
|                             |  |                  |         |                  |   |         | 

Although the
Company operates in two reportable segments, there are 6 major service lines as
listed below with Co-location services being offered in both segments. The
breakdown of revenues for each service line is as follows:

|                                        |  |                               |        |                              |   |                  |  |                  |        |  |   |        | 
|--------------------------------------- |  | ----------------------------- | ------ | ---------------------------- | - | ---------------- |  | ---------------- | ------ |  | - | ------ | 
|                                        |  | FOR THE THREE MONTHS 
  ENDED |        | FOR THE NINE MONTHS
   ENDED |  
|                                        |  |                               |        |                              |  
|                                        |  | JUNE 30, 
  2006              |        | JUNE 30, 
  2005             |   | JUNE 30, 
  2006 |  | JUNE 30, 
  2005 |       
|                                        |  |                               |        |                              |   |                  |  |                  |       
|Internet
  Hosting and Co-Location      |  | $                             | 9,533  |                              | $ | 7,072            |  | $                | 25,747 |  | $ | 19,579 | 
|Managed
  Services                      |  |                               | 4,841  |                              |   | 5,239            |  |                  | 15,294 |  |   | 16,211 | 
|Network
  Services and Internet Access  |  |                               | 2,323  |                              |   | 3,809            |  |                  | 8,383  |  |   | 11,823 | 
|Lit fiber
  services                    |  |                               | 15,338 |                              |   | 11,439           |  |                  | 43,561 |  |   | 14,216 | 
|Dark fiber
  services                   |  |                               | 1,245  |                              |   | 1,382            |  |                  | 3,571  |  |   | 1,726  | 
|Hardware and
  Software Sales and Other |  |                               | 135    |                              |   | 274              |  |                  | 657    |  |   | 2,221  | 
|                                        |  |                               |        |                              |   |                  |  |                  |        |  |   |        | 
|Revenue, net                            |  | $                             | 33,415 |                              | $ | 29,215           |  | $                | 97,213 |  | $ | 65,776 | 

10

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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)

NOTE 5COMPREHENSIVE LOSS

|                                                                     |  |                           |        |                          |   |                 |   |                 |         |   |   |         |  
|-------------------------------------------------------------------- |  | ------------------------- | ------ | ------------------------ | - | --------------- | - | --------------- | ------- | - | - | ------- | -
|                                                                     |  | FOR THE THREE MONTHSENDED |        | FOR THE NINE MONTHSENDED |  
|                                                                     |  |                           |        |                          |  
|                                                                     |  | JUNE 30,
  2006           |        | JUNE 30,
  2005          |   | JUNE 30,
  2006 |   | JUNE 30,
  2005 |        
|                                                                     |  |                           |        |                          |   |                 |   |                 |        
|Net loss attributable to common
  stockholders                       |  | $                         | (3,941 | )                        | $ | (6,273          | ) | $               | (14,221 | ) | $ | (23,821 | )
|Other comprehensive income (loss):                                   |  |                           |        |                          |   |                 |   |                 |         |   |   |         |  
|Unrealized gain (loss) on marketable
  securities available for sale |  |                           |       |                          |   | (2              | ) |                 |        |   |   | 1,045   |  
|Foreign currency translation adjustment                              |  |                           | 980    |                          |   | (1,016          | ) |                 | 665     |   |   | 175     |  
|                                                                     |  |                           |        |                          |   |                 |   |                 |         |   |   |         |  
|Comprehensive loss                                                   |  | $                         | (2,961 | )                        | $ | (7,291          | ) | $               | (13,556 | ) | $ | (22,601 | )
|                                                                     |  |                           |        |                          |   |                 |   |                 |         |   |   |         |  

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.

Globix has
retained the investment banking firm of The Bank Street Group LLC to assist it
in reviewing strategic and financing alternatives for the Company and its
businesses. The Company is committed to pay The Bank Street Group LLC a set fee
upon the successful completion of its contracted responsibilities.

On May 2, 2006 the Company entered into an agreement with a major
  leasing company for a 30 month equipment lease line for up to $3 million and
  a second agreement with another company for a 24 month equipment lease for up
  to $1.3 million. As of June 30, 2006 the Company had utilized $1.1 million of
  the $3 million line for equipment leases and none of the $1.3 million dollar
  line. The terms of the first equipment lease line do not meet any one of the
  four necessary criteria established in SFAS No. 13, Accounting for Leases
  that would allow the Company to capitalize the equipment received through these
  leases and, as such, the costs related to these leases are being recorded as
  operating expenses.

In January
2005 the Company filed a general unsecured claim in the bankruptcy proceeding
involving Universal Access, Inc. (the Claim) pending in the United States
Bankruptcy Court for the Northern District of Illinois Eastern Division.
Universal Access, Inc. objected to the Claim. The Company and Universal Access,
Inc. negotiated a settlement on June 26, 2006 whereby the Company has been
allowed a general unsecured claim of $1.2 million. This settlement has been
approved by the Bankruptcy Court and distributions will be made to the Company,
in the future, in accordance with the provisions of the Second Amended
Liquidating Ch 11 Plan Jointly Proposed by Universal Access Global Holdings
Inc., Universal Access, Inc., Universal Access of Virginia, Inc., Universal
Access Communications Inc. and Tri-Quad Enterprises, Inc.,
Debtors-In-Possession, And By the Official Committee of Unsecured Creditors as
approved by the Bankruptcy Court. As a result of this settlement, the bad
debt reserve the Company established in a prior fiscal year for Universal
Access was reversed in the amount of $0.6 million in the three-months ended
June 30, 2006.

In May 2006
the Company was served with a complaint in an action entitled Media
Express USA, Ltd. V. Globix Corporationwhich is pending in the New
York County Supreme Court. The complaint seeks a total of $0.5 million on two
causes of action based on a claim that the Company failed to provide plaintiff
with certain contracted-for services. The Company has filed an answer denying
the material allegations of the complaint and is asserting numerous defenses.

In July 2006
the Company settled for $0.1 million a Massachusetts state court action against
CC&F Lincoln Street, LLC (Lincoln Street). The Company had been granted a
default judgment in 2004 in a suit it had brought on a note that had been
issued by Lincoln Street as part of a settlement involving a lease between the
Company and Lincoln Street.

Other than
noted above, there have been no developments in ongoing legal proceedings nor
has any material litigation 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 of the 2005 Form 10-K.

11

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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)

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 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. The debt for
  equity exchange resulted in a loss of $3.2 million in the quarter ended March
  31, 2005. Following the exchange, Globix filed a registration statement covering
  the re-sale of the common stock issued in the debt for equity exchange. Under
  the debt for equity exchange agreements, the exchanging holders have the right
  to purchase an additional 22,728 shares of common stock at $2.75 per share as
  a result of the failure of the registration statement to become effective by
  July 6, 2005. 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 June 30, 2006, a dividend of $0.9
million 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.

12

---



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

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 were vested on May 1, 2006. The warrants expire on May 1, 2008.

NOTE 11  FIBER OPTIC EXCHANGE

On December
30, 2005 the NEON subsidiary of Globix entered into a fiber optic exchange
agreement with AT&T Corp. Globix provided fiber along 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 cash from 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.

13

---



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

Cautionary Statement Regarding
Forward-Looking Statements

This Form 10-Q
contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to various risks, uncertainties and other factors, some of which are
beyond our control, which may cause our actual results to differ materially
from our expectations. Forward-looking statements are generally identified by
the use of forward-looking words or phrases such as anticipates, intends, expects,
believes, estimates, or words or phrases of similar import. Among the
factors that could cause our results to differ from those anticipated are our
high degree of leverage and history of operating losses, our ability to retain
existing customers and attract new customers, our ability to achieve cost-savings
and generate positive cash flow, risks associated with potential acquisitions
and divestitures and other factors affecting our business generally. Such
factors are more fully described herein and in our 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 our
business, see Risk Factors in our Annual Report on Form 10-K for the year
ended September 30, 2005 and in our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2006.

OVERVIEW

We are a
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 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 the 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 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.

14

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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 This business line includes 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 and managed services.

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
operational strategy is to seek to grow profitably by selling a more profitable
mix of business and continuing our investment in revenue supporting
infrastructure. Our transport business has experienced consistent revenue
growth and profitability improvement over the past year 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 making limited investments in
infrastructure enhancements. In addition, we may seek to consolidate operations
and reduce our exposure to less profitable markets. 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.

Although the acquisition of NEON and the concurrent debt for equity
  exchange increased our revenues and asset base and reduced the total amount
  of our indebtedness, we remain highly leveraged. Our board of directors elected
  to pay annual accrued interest of approximately $7.4 million on the 11% senior
  notes through the issuance of additional notes effective on May 1, 2006. Interest
  on the 11% senior notes must be paid in cash on May 1, 2007.

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 U.S. generally accepted accounting
principles. 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 which revises
and rescinds certain sections of SAB No. 101, Revenue Recognition. The
changes noted in SAB 104 did not have a material effect on Globixs
consolidated financial statements.

The Globix
business segment (Internet services) 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 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 (primarily fiber optic network services) 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

15

---



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 and utility 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
Globixs network, leased line and associated costs related to connecting with
Globixs peering partners and costs associated with leased lines connecting
Globixs 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 collocation 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.

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.

16

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| |                                         |                                  
| | --------------------------------------- | ---------------------------------
| | 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 U.S. generally accepted
accounting principles 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, purchase price allocation,
allowance for doubtful accounts, credit reserve, the useful lives and ultimate
reliability 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 June 30, 2006 and September 30,
2005 the balance of bad debt reserve amounted to approximately $2.2 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 JUNE 30, 2006 COMPARED TO THE
QUARTER ENDED JUNE 30 2005

REVENUE, NET.
Revenue for the three-month period ended June 30, 2006 increased 14.4%, or
approximately $4.2 million, to $33.4 million from $29.2 million for the
three-month period ended June 30, 2005.

Revenues for the major service lines were as follows. Revenue
  from Internet Hosting and Co-Location increased by $2.4 million, or 34.8%, to
  $9.5 million in the quarter ended June 30, 2006, compared to $7.1 million in
  the same period in fiscal year 2005. This revenue growth has been driven by
  favorable pricing trends in the segment and increasing fill rates at our data
  centers. Revenue from Network Services and Internet Access decreased by $1.5
  million, or 39.0%, to $2.3 million in third fiscal quarter of 2006 compared
  to $3.8 million in the third fiscal quarter of 2005, due to increased competition
  and associated price pressures for these services. Revenue from Hardware and
  Software Sales and Other decreased by $0.2 million to $0.1 million in the three-month
  period ended June 30, 2006, compared to $0.3 million in the same period in fiscal
  year 2005, due to a decrease in Hardware sales and increased focus on recurring
  revenues as opposed to one time hardware revenues. Revenue from Managed Services
  decreased by $0.4 million, or 7.6%, to $4.8 million in the three-month period
  ended June 30, 2006, compared to $5.2 million in the same period in fiscal 2005.
  Revenue from Lit and Dark Fiber Services, services newly offered in 2005 as
  a result of the acquisition of NEON, were $15.3 million and $1.2 million in
  the three month period ended June 30, 2006, respectively, compared to $11.4
  million and $1.4 million for the three month period ended June 30, 2005. The
  aggregate increase in revenue is the result of a focus on the Lit Fiber Services
  of our NEON segment. Foreign exchange rates between the U.S. dollar and the
  British Pound did not have a material effect on the aforementioned analysis.

17

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COST OF
REVENUE. Cost of revenue for the quarter ended June 30, 2006 increased to $19.0
million from $16.8 million in the quarter ended June 30, 2005, an increase of
$2.2 million. This increase in our cost of revenue is primarily related to our
increase in revenues in the comparable quarters. Our gross margins for the
three month period ended June 30, 2006 and 2005 were 43.3% and 42.7%
respectively. 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
decreased by $1.3 million to $9.2 million for the quarter ended June 30, 2006
as compared to $10.5 million for the quarter ended June 30, 2005. Employee
related costs and professional fees decreased by $1.6 million for the quarter
ended June 30, 2006 compared to the quarter ended June 30, 2005. This was
offset in part by an increase in rent and utilities costs. 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 three month period ended June 30, 2006 were $6.5 million compared to
  $6.0 million in the same quarter in fiscal year 2005. This increase of $0.5
  million is primarily the result of the increase of depreciable assets during
  the three month period ended June 30, 2006.

INTEREST AND FINANCING EXPENSES. Interest and financing expense
  for the quarter ended June 30, 2006 was $2.9 million, compared to $2.3 million
  for the quarter ended June 30, 2005, as a result of our higher average outstanding
  balance of the 11% senior notes during the three month period ended June 30,
  2006 compared to the same period in 2005.

INTEREST
INCOME. Interest income for the quarter ended June 30, 2006 was relatively flat
at $0.1 million, compared to $0.1 million for the quarter ended June 30, 2005.

OTHER
INCOME/EXPENSE, NET. Other income for the quarter ended June 30, 2006 was $0.2
million, compared to $0.1 million for the quarter ended June 30, 2005. The
variance of $0.1million is primarily the result of the rental income from tenants
at our 139 Centre Street building during the quarter ended June 30, 2006.

NET LOSS
ATTRIBUTABLE TO COMMON STOCKHOLDERS. As a result of the factors described
above, we reported net loss attributable to common stockholder of $3.9 million,
or $0.08 basic and diluted loss per share, for the three month period ended
June 30, 2006 as compared to a net loss of $6.3 million, or $0.13 basic and
diluted loss per share for the same period in 2005.

18

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NINE MONTHS ENDED JUNE 30, 2006 COMPARED TO
THE NINE MONTHS ENDED JUNE 30, 2005

REVENUE, NET.
Revenue for the nine-month period ended June 30, 2006 increased 47.8%, or
approximately $31.4 million to $97.2 million from $65.8 million for the
nine-month period ended June 30, 2005. Excluding $32.1 million of revenue as a
direct result of the Neon acquisition, revenue for the nine-month period ended
June 30, 2006 decreased by 1.4%, or approximately $0.7 million, compared to the
nine-month period ended June 30, 2005.

Revenues
  from the major service lines were as follows. Revenue from Internet Hosting
  and Co-Location increased by $6.1 million, or 31.7%, to $25.7 million in the
  nine-months ended June 30, 2006, compared to $19.7 million in the same period
  in fiscal year 2005. Approximately $1 million of the increase is a result of
  Neon revenue. The remainder of the growth is driven by favorable pricing trends
  in the segment and increasing fill rates at our data centers. Revenue from Network
  Services and Internet Access decreased by $3.4 million, or 29.1%, to $8.4 million
  in the nine-months ended June 30, 2006, compared to $11.8 million in the same
  period of fiscal year 2005, due to increased competition and associated price
  pressures for these services. Revenue from Hardware and Software Sales and Other
  decreased by $1.5 million to $0.7 million in the nine-month period ended June
  30, 2006 compared to $2.2 million in the same period in fiscal year 2005, which
  resulted primarily from a decrease in Hardware sales due to an increased focus
  on recurring revenues. Revenue from Managed Services decreased by $0.9 million,
  or 5.2%, to $15.3 million in the nine-month period ended June 30, 2006 compared
  to $16.2 million in the same period in fiscal 2005. This decrease is the result
  of our focus on improving our core Internet Hosting and Co-Location business.
  Revenue from Lit and Dark Fiber Services were $43.6 million and $3.6 million,
  respectively, for the nine months ended June 30, 2006 compared to $14.2 million
  and $1.7 million, respectively, for the nine months ended June 30, 2005. The
  improvements in these service lines are the result of a full nine months of
  operation in 2006. The above analysis includes the negative effect of foreign
  exchange rates between the U.S. dollar and the British Pound in the amount of
  approximately $1.1 million on our revenue for the nine-months ended June 30,
  2006 over the nine-months ended June 30, 2005.



COST
  OF REVENUE. Cost of revenue for the nine-months ended June 30, 2006, increased
  to $53.5 million from $37.9 million in the nine-months ended June 31, 2005.
  $16.9 million of the increase is the direct result of our acquisition of Neon
  on March 7, 2005. The remaining decrease of approximately $1.2 million was primarily
  attributable to our change in sales strategy and the related decrease in hardware
  sales period over period. Our gross margins including the impact of the Neon
  acquisition for the nine-month period ended June 30, 2006 and 2005 were 44.9%
  and 42.4% respectively. 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
$32.7 million as compared to $27.0 million for the nine-months ended June 30,
2006 and 2005 respectively. This included a $4.9 million increase of selling,
general and administrative expenses from Neon. The remaining increase of $0.8
million is primarily the result of an increase in professional fees and
utilities in the nine-months ended June 30, 2006 as compared to the same period
in fiscal year 2005. The above analysis includes the positive effect of foreign
exchange rates between the U.S. dollar and the British Pound in the amount of
approximately $0.6 million on our selling, general and administrative expenses
for the nine-months ended June 30, 2006 over the nine-months ended June30,
2005.

DEPRECIATION
AND AMORTIZATION. Depreciation and amortization expenses for the nine-month
period ended June 30, 2006 were $18.0 million compared to $14.0 million in the
same period in fiscal year 2005. This increase of $4.0 million is primarily the
result of a full nine months of Neon operations in 2006.

INTEREST AND
FINANCING EXPENSES. Interest and financing expense for the nine months ended
June 30, 2006 was $7.7 million, compared to $7.1 million for the nine-months
ended June 30, 2005, as a result of our higher average outstanding balance of
the 11% senior notes during the nine-month period ended June 30, 2006 compared
to the same period in 2005.

INTEREST INCOME. Interest income for the nine months ended June
  30, 2006 was $0.4 million compared to $0.3 million for the nine-months ended
  June 30, 2005. The increase was primarily due to our newly implemented policy
  of overnight investment of our excess cash balances.

OTHER
INCOME/EXPENSE, NET. Other income for the nine months ended June 30, 2006 was
$0.7 million compared to other expense for the nine-months ended June 30, 2005 of
$0.6 million. This difference included the recognition of a loss of $0.9
million on the sale of marketable securities during the nine-month period ended
June 30, 2005.

19

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GAIN (LOSS) ON
DISCHARGE OF DEBT. Loss on discharge of debt for the nine-months ended June 30,
2005 was $3.2 million. The $3.2 million loss was the direct result of the debt
for equity swap described in note 8 to the financial statements.

NET LOSS
ATTRIBUTABLE TO COMMON STOCKHOLDERS. As a result of the factors described
above, we reported net loss of $14.2 million, or $0.29 basic and diluted loss
per share, for the nine-month period ended June 30, 2006 as compared to a net
loss of $23.8 million, or $0.79 basic and diluted loss per share, for the same
period in 2005.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2006, our negative working capital was $9,606 as
  compared to $8,378 as of September 30, 2005. The decrease in working capital
  as of June 30, 2006 was primarily due to the decrease in our cash and cash equivalents
  and an increase in our accrued liabilities, partially offset by an increase
  in our prepaid expenses.

Historically our cost structure in the Globix business segment
  exceeded our revenue base mainly due to high labor costs. 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. We believe that this is supported
  by our current positive cash flows from operations.

Beginning in the second half of fiscal 2005, 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. This led us to borrow $5 million in the first quarter of fiscal 2006
  to meet our cash requirements.

Our ability to generate positive cash flows from operations and
  achieve profitability is dependent upon our ability to grow our revenue while
  controlling costs and becoming more efficient. We believe we will ultimately
  be able to meet our 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 sales of
assets, 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 June 30, 2006. 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 cash resources and
  our limited access to capital markets, we may not be able to pursue further
  acquisitions 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.

NINE MONTH PERIOD ENDED JUNE 30, 2006

As of June 30,
2006, we had cash and cash equivalents totaling approximately $6.0 million
compared to approximately $4.4 million on June 30, 2005. This increase was
mainly attributable to operating activities, investing activities and financing
activities as described below.

20

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OPERATING ACTIVITIES:

During the nine month period ended June 30, 2006, net cash provided
  by operating activities was approximately $9.5 million compared to $3.3 million
  used in operating activities during the same period in 2005. The improvement
  in our cash outflow is due mainly to the decrease in our loss from operations
  excluding depreciation and amortization and loss on impairment of assets. As
  part of our normal course of doing business we experienced changes in our accounts
  receivable, accounts payable, accrued liabilities and accrued interest, which
  in the aggregate did not have a material effect on our first nine months of
  fiscal 2006 operating cash flow.

INVESTING ACTIVITIES:

Net cash used
in investing activities during the nine month period ended June 30, 2006 was
$17.1 million. Approximately $19.2 million was used for capital expenditures,
offset by proceeds of $2.0 million from AT&T from the fiber optic exchange.

FINANCING ACTIVITIES:

Net cash
provided by financing activities during the nine month period ended June 30,
2006 was $4.6 million. This was the result of proceeds of $5.0 million from the
issuance of our 9% senior notes and was partially offset by $0.4 million used
for paying our scheduled mortgage and capital lease payments.

21

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ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

At June 30,
2006, $12.5 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. The
Company believes that an immediate increase or decrease of 5% of the U.S.
Dollar in comparison to the British Pound would not have a material impact on
its operating results or cash flows.

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 Chief 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 Chief
Financial Officer, has evaluated the effectiveness of the design and operation
of our disclosure controls and procedures as of June 30, 2006. Based upon that
evaluation and subject to the foregoing, our Chief Executive Officer and Chief
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.

22

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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.

In January
2005 the Company filed a general unsecured claim in the bankruptcy proceeding
involving Universal Access, Inc. (the Claim) pending in the United States
Bankruptcy Court for the Northern District of Illinois Eastern Division.
Universal Access, Inc. objected to the Claim. The Company and Universal Access,
Inc. negotiated a settlement on June 26, 2006 whereby the Company has been
allowed a general unsecured claim of $1,150,000. This settlement has been
approved by the Bankruptcy Court and distributions will be made to the Company,
in the future, in accordance with the provisions of the Second Amended
Liquidating Ch 11 Plan Jointly Proposed by Universal Access Global Holdings
Inc., Universal Access, Inc., Universal Access of Virginia, Inc., Universal Access
Communications Inc. and Tri-Quad Enterprises, Inc., Debtors-In-Possession, And
By the Official Committee of Unsecured Creditors as approved by the Bankruptcy
Court.

In May 2006
the Company was served with a complaint in an action entitled Media Express
USA, Ltd. V. Globix Corporationwhich is pending in the New York
County Supreme Court. The complaint seeks a total of $500,000 on two causes of
action based on a claim that the Company failed to provide plaintiff with
certain contracted-for services. The Company has filed an answer denying the
material allegations of the complaint and is asserting numerous defenses.

In July 2006
the Company settled for $100,000 a Massachusetts state court action against
CC&F Lincoln Street, LLC (Lincoln Street). The Company had been granted a
default judgment in 2004 in a suit it had brought on a note that had been
issued by Lincoln Street as part of a settlement involving a lease between the
Company and Lincoln Street.

Other than
noted above, there have been no developments in ongoing legal proceedings nor
has any material litigation 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 of the 2005 Form 10-K.

ITEM 1A. RISK FACTORS

Except as
otherwise disclosed in our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2006, there have been 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.

23

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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 Chief 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 Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
  of 2002

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: August 8, 2006 |                             
|                     |                             
|                     | By: /S/ Eric
  J. Sandman   
|                     |                              |                          
|                     |                              |                          
|                     |                              | Eric J.
  Sandman        
|                     |                              | Chief
  Financial Officer
|                     |                             
|Date: August 8, 2006 |                             

24

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