<PAGE>



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

                                    FORM 10-Q

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

                  For The Quarterly Period Ended June 30, 2002

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

                  For The Transition Period From _____ To _____

                         Commission File Number 0-26115

                                INTERLIANT, INC.
                                ----------------
             (Exact Name Of Registrant As Specified In Its Charter)


    Delaware                                                 13-3978980
 ----------------------                        ---------------------------------
(State of Incorporation)                       (IRS Employer Identification No.)

 Two Manhattanville Road, Purchase, New York                  10577
---------------------------------------------               -----------
(Address of Principal Executive Offices)                    (Zip Code)

                                 (914) 640-9000
                                 --------------
              (Registrant's Telephone Number, Including Area Code)

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

     (Former Name, Former Address and Former Fiscal Year, if Changed Since
                                  Last Report)

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

The number of shares outstanding of the Registrant's Common Stock as of July 31,
2002 was approximately 57,496,000.

<PAGE>

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                    PAGE NO.
                                                                                    --------

PART I.  FINANCIAL INFORMATION
<S>            <C>                                                                  <C>
Item 1.           Financial Statements (Unaudited) Condensed Consolidated
                  Balance Sheets as of June 30, 2002 and December 31, 2001             1

                  Condensed Consolidated Statements of Operations for the
                  Three and Six Months Ended June 30, 2002 and 2001                    2

                  Condensed Consolidated Statements of Cash Flows for the
                  Six Months Ended June 30, 2002 and 2001                              3

                  Notes to Condensed Consolidated Financial Statements                 4

Item 2.           Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                           12

Item 3.           Quantitative and Qualitative Disclosure of Market Risk              24

PART II. OTHER INFORMATION

Item 1.           Legal Proceedings                                                   25

Item 2.           Changes in Securities and Use of Proceeds                           25

Item 3.           Default Upon Senior Securities                                      25

Item 4.           Submission of Matters to a Vote of Security Holders                 25

Item 6.           Exhibits and Reports on Form 8-K                                    25

</TABLE>




<PAGE>

                          PART I. FINANCIAL INFORMAITON

                                INTERLIANT, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                         June 30,         December 31,
                                                                                           2002              2001
                                                                                       -----------        -------------
                                                                                       (unaudited)
                                     Assets
Current assets:
<S>                                                                                    <C>               <C>
 Cash and cash equivalents                                                             $ 2,234,000       $ 5,371,000
 Restricted cash                                                                         2,301,000         2,301,000
 Accounts receivable, net of allowances of $1.6 million
   and $1.7 million at June 30, 2002 and December 31, 2001, respectively                 8,535,000        12,299,000
 Deferred costs                                                                          2,245,000         1,915,000
 Prepaid assets                                                                          2,049,000         2,448,000
 Other current assets                                                                    1,382,000         1,288,000
                                                                                        ----------        ----------
      Total current assets                                                              18,746,000        25,622,000
                                                                                        ----------        ----------

 Property and equipment, net                                                             9,797,000        14,629,000
 Goodwill, net                                                                           2,447,000        21,855,000
 Intangibles, net of accumulated amortization of $8.3 million
  and $18.2 million at June 30, 2002 and December 31, 2001, respectively                   895,000         7,995,000
 Other assets                                                                            1,182,000           697,000
                                                                                        ----------        ----------
      Total assets                                                                    $ 33,067,000      $ 70,798,000
                                                                                      ============      ============
                     Liabilities and stockholders' (deficit) equity

Current liabilities:
  Notes payable and current portion of long-term debt
     and capital lease obligations                                                    $ 35,123,000      $ 12,402,000
  Accounts payable                                                                       7,626,000         6,786,000
  Accrued expenses                                                                       8,199,000        14,308,000
  Deferred revenue                                                                       6,099,000         6,307,000
  Net liabilities of discontinued operations                                               518,000           914,000
  Restructuring reserve                                                                  1,734,000         2,175,000
                                                                                        ----------        ----------
      Total current liabilities                                                         59,299,000        42,892,000
                                                                                        ----------        ----------

Long-term debt and capital lease obligations, less current portion                      88,562,000       102,450,000
Other long-term liabilities
                                                                                           161,000           372,000
Stockholders' (deficit) equity:
  Preferred stock, $.01 par value; 1,000,000 shares authorized; 0 shares
     issued and outstanding
  Common stock, $.01 par value; 500,000,000 shares authorized; 57,162,788, and
     51,891,036 shares issued and outstanding at
     June 30, 2002 and December 31, 2001, respectively                                     572,000           519,000
  Additional paid-in capital                                                           320,937,000       313,774,000
  Accumulated deficit                                                                 (436,187,000)     (388,931,000)
  Accumulated other comprehensive loss                                                    (277,000)         (278,000)
                                                                                        ----------        ----------
      Total stockholders' deficit                                                     (114,955,000)      (74,916,000)
                                                                                      ------------       -----------
      Total liabilities and stockholders' (deficit) equity                            $ 33,067,000      $ 70,798,000
                                                                                      ============      ============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       1

<PAGE>


                                INTERLIANT, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                Three Months Ended                Six Months Ended
                                                                    June 30,                          June 30,
                                                          -----------------------------     ------------------------------
                                                               2002              2001            2002               2001
                                                          -------------    -------------    -------------    -------------
<S>                                                       <C>              <C>              <C>              <C>
   Service revenues                                       $  10,866,000    $  27,428,000    $  24,781,000    $  56,324,000
   Product revenues                                           3,584,000        3,814,000        8,857,000       10,041,000
                                                          -------------    -------------    -------------    -------------
Revenue                                                      14,450,000       31,242,000       33,638,000       66,365,000

Costs and expenses:
  Cost of service revenue                                     5,840,000       17,569,000       14,145,000       36,353,000
  Cost of product revenue                                     3,035,000        2,905,000        7,199,000        7,911,000
                                                          -------------    -------------    -------------    -------------
  Cost of revenue                                             8,875,000       20,474,000       21,344,000       44,264,000
  Sales and marketing                                         3,309,000       10,287,000        7,559,000       22,157,000
  General and administrative (exclusive of non-cash
    compensation shown below)                                 6,162,000       16,792,000       14,448,000       33,451,000
  Non-cash compensation                                         572,000       (7,130,000)         738,000       (4,776,000)
  Depreciation                                                1,813,000        7,993,000        3,633,000       14,952,000
  Amortization of intangibles                                   429,000       10,014,000          936,000       22,585,000
  Restructuring charge                                               --        1,308,000          248,000        1,308,000
  Impairment losses                                          28,302,000        5,037,000       29,345,000       41,237,000
                                                          -------------    -------------    -------------    -------------
                                                             49,462,000       64,775,000       78,251,000      175,178,000
                                                          -------------    -------------    -------------    -------------
Operating loss                                              (35,012,000)     (33,533,000)     (44,613,000)    (108,813,000)
Other income (expense), net                                     752,000         (491,000)       3,301,000          (37,000)
Interest expense, net                                        (2,152,000)      (3,769,000)      (6,741,000)      (6,750,000)
                                                          -------------    -------------    -------------    -------------
Loss before minority interest and discontinued
  operations                                                (36,412,000)     (37,793,000)     (48,053,000)    (115,600,000)

Minority interest                                                    --        3,543,000               --        5,166,000
                                                          -------------    -------------    -------------    -------------
Loss before discontinued operations                         (36,412,000)     (34,250,000)     (48,053,000)    (110,434,000)

Gain (Loss) from discontinued operations                        796,000       (4,182,000)         796,000       (9,221,000)
                                                          -------------    -------------    -------------    -------------
Net loss                                                  $ (35,616,000)   $ (38,432,000)   $ (47,257,000)   $(119,655,000)
                                                          =============    =============    =============    =============
Basic and diluted loss per share:
  Loss before discontinued operations                     $       (0.65)   $       (0.69)   $       (0.88)   $       (2.22)
  Discontinued operations                                          0.01            (0.08)            0.01            (0.19)
                                                          -------------    -------------    -------------    -------------
  Net loss                                                $       (0.64)   $       (0.77)   $       (0.87)   $       (2.41)
                                                          =============    =============    =============    =============

Weighted average shares outstanding - basic and diluted      55,736,210       50,223,104       54,265,466       49,686,569
                                                          =============    =============    =============    =============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       2

<PAGE>


                                INTERLIANT, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                                 Six Months Ended
                                                                                     June 30,
                                                                     ----------------------------------------
                                                                          2002                      2001
                                                                     -------------             -------------
Operating activities
<S>                                                                  <C>                       <C>
  Net cash used in operating activities                              $ (11,174,000)            $ (32,850,000)
                                                                     -------------             -------------
Investing activities
  Purchases of fixed assets                                             (1,534,000)              (22,212,000)
  Sales and purchases of short-term investments, net                                              48,682,000
  Proceeds from sales of businesses, net of costs                        3,847,000
  Acquisitions of businesses, net of cash acquired                      (1,100,000)               (1,352,000)
                                                                     -------------             -------------
  Net cash provided by (used in) investing activities                    1,213,000                25,118,000
                                                                     -------------             -------------
Financing activities
  Proceeds from sale of common stock                                                                 111,000
  Proceeds from exercise of options and warrants                                                      11,000
  Proceeds from sale/leaseback of equipment and furniture                                          2,613,000
  Proceeds from issuance of debt and capital lease financing            18,650,000                         -
  Payment in connection with debt restructuring                         (1,946,000)
  Repayment of debt and capital leases                                  (9,893,000)               (8,358,000)
                                                                     -------------             -------------
  Net cash (used in) provided by financing activities                    6,811,000                (5,623,000)
                                                                     -------------             -------------
Effect of exchange rate changes on cash                                     13,000                  (160,000)

Net (decrease) increase in cash and cash equivalents                    (3,137,000)              (13,515,000)
Cash and cash equivalents at beginning of period                         5,371,000                26,678,000
                                                                     -------------             -------------
Cash and cash equivalents at end of period                           $   2,234,000             $  13,163,000
                                                                     =============             =============

</TABLE>

      See accompanying notes to condensed consolidated financial statements




                                       3

<PAGE>



                                Interliant, Inc.

Notes to Condensed Consolidated Financial Statements June 30, 2002 (unaudited)

1.   BUSINESS

Interliant, Inc. (OTCBB: INIT), ("Company"), is a provider of managed
infrastructure solutions, encompassing messaging, security, and hosting, plus an
integrated set of professional services products that differentiate and add
customer value to these core solutions. The Company sells to the
large/enterprise market through its direct sales force and to the small and
medium-business market ("SMB") through its INIT Branded Solutions program, which
allows companies to private label its offerings. The Company provides companies
of all sizes with cost-effective, secure infrastructure and a focused suite of
e-business solutions. In July 2002, the Company's Common Stock was delisted from
Nasdaq National Market and began trading on the Over The Counter Bulletin Board.

The Company was organized under the laws of the State of Delaware on December 8,
1997. Web Hosting Organization LLC ("WEB"), a Delaware Limited Liability
Company, is the largest single shareholder, owning 47% of the Company's issued
and outstanding shares of common stock ("Common Stock") as of June 30, 2002.
WEB's investors comprise Charterhouse Equity Partners III, L.P. and Chef
Nominees Limited (collectively, "CEP Members"), and WHO Management, LLC ("WHO").

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. For the period from inception to June 30,
2002, the Company has incurred net losses and negative cash flows from
operations, and has also expended significant funds for capital expenditures
(property and equipment) and the acquisitions of businesses. As of June 30,
2002, the Company had negative working capital of $40.6 million, including cash
and cash equivalents of $2.2 million.

Subsequent to June 30, 2002, the Company's negative cash flow continued to
increase and based on its recently revised business plan and the assumptions on
which it is based, the Company will not have sufficient cash to fund operations
beyond the end of the third calendar quarter of 2002. On August 5, 2002 ("Filing
Date") the Company and its domestic subsidiaries (including indirectly owned
subsidiaries) (collectively, "Debtors") filed voluntary petitions in the United
States Bankruptcy Court for the Southern District of New York the ("Court") for
reorganization under Chapter 11 ("Case") of the United States Bankruptcy Code
("Code").

The necessity for filing under the Code, in addition to the continued negative
cash flow from operations, was attributable primarily to the Company's inability
to collect funds due from the prior sales of business units, a delay in the
anticipated sale of one of its business units and continued weakening of market
conditions.

The outstanding principal of, and accrued interest on, all long-term debt of the
Debtors became immediately due and payable as a result of the commencement of
the Case. However, the vast majority of the claims in existence at the Filing
Date (including claims for principal and accrued interest and substantially all
legal proceedings) are stayed (deferred) while the Company continues to manage
the businesses. The Court has, upon motion by the Debtors, permitted the Debtors
to pay or otherwise honor certain unsecured pre-Filing Date claims, including
employee wages and benefits and customer claims in the ordinary course of
business, subject to certain limitations. The Debtors also have the right to
assume or reject executory contracts, subject to Court approval and certain
other limitations. In this context, "assumption" means that the Debtors agree to
perform their obligations and cure certain existing defaults

                                       4

<PAGE>

under an executory contract and "rejection" means that the Debtors are relieved
from its obligations to perform further under an executory contract and are
subject only to a claim for damages for the breach thereof. Any claim for
damages resulting from the rejection of an executory contract is treated as a
general unsecured claim in the Case.

Generally, pre-Filing Date claims against the Debtors will fall into two
categories: secured and unsecured, including certain contingent or unliquidated
claims. Under the Code, a creditor's claim is treated as secured only to the
extent of the value of the collateral securing such claim, with the balance of
such claim being treated as unsecured. Unsecured and partially secured claims do
not accrue interest after the Filing Date. A fully secured claim, however, does
accrue interest after the Filing Date until the amount due and owing to the
secured creditor, including interest accrued after the Filing Date, is equal to
the value of the collateral securing such claim. The amount and validity of
pre-Filing Date contingent or unliquidated claims, although presently unknown,
ultimately may be established by the Court or by agreement of the parties. As a
result of the Case, additional pre-Filing Date claims and liabilities may be
asserted, some of which may be significant. No provision has been included in
the accompanying financial statements for such potential claims and additional
liabilities that may be filed on or before a date to be fixed by the Court as
the last day to file proofs of claim.

The Company's objective is to achieve the highest possible recoveries for all
creditors and stockholders, consistent with the Debtors' ability to pay and to
continue the operation of their businesses. However, there can be no assurance
that the Debtors will be able to attain these objectives or to achieve a
successful reorganization. Further, there can be no assurance that the
liabilities of the Debtors will not be found in the Case to exceed the fair
value of their assets. This could result in claims being paid at less than 100%
of their face value and the equity of the Company's stockholders being diluted
or cancelled.

Under the Code, the rights of and ultimate payments to pre-Filing Date creditors
and stockholders may be substantially altered from their contractual terms. At
this time, it is not possible to predict the outcome of the Case, in general, or
the effect of the Case on the businesses of the Debtors or on the interests of
creditors and stockholders.

The Debtors anticipate that substantially all liabilities of the Debtors as of
the Filing Date will be resolved under one or more plans of reorganization to be
proposed and voted on in the Case in accordance with the provisions of the Code.
Although the Debtors intend to file and seek confirmation of such a plan or
plans, there can be no assurance as to when the Debtors will file such a plan or
plans, or that such plan or plans will be confirmed by the Court and
consummated.

     The Company is actively negotiating with a financial institution to secure
Debtor In Possession ("DIP") financing which, if obtained, should provide funds
to continue the business until the reorganization plan is completed. No
assurance can be given that such financing will be obtained or if obtained will
be on terms favorable to the Company, or will be sufficient to fund the business
until the reorganization plan is completed.

The accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the liquidation
of liabilities in the ordinary course of business. However, as a result of the
Case, such realization of assets and liquidation of liabilities are subject to a
significant number of uncertainties. Although, as a result of the filing under
the Code, certain liabilities which are classified as non-current liabilities on
the balance sheet may become immediately due and payable pursuant to the terms
of the underlying agreements, under the Code substantially all of such
liabilities are stayed (deferred) while the Company continues to manage the
business.


                                       5

<PAGE>

In January and February, 2002 the Company sold two non-core business units for
aggregate net cash proceeds of $3.8 million. On March 8, 2002 Charterhouse
Equity Partners III L.P., and Mobius Technology Ventures VI, LP (formerly
Softbank) and its related funds (collectively, "Investors") purchased $10.0
million of the Company's 10% Convertible Subordinated Notes (see Note 4).

In May 2002, the Company consummated a transaction ("Accounts Receivable
Financing") under which it obtained a working capital financing facility
allowing the Company to finance up to the lesser of $7.5 million or 80% of its
eligible accounts receivable (see Note 4).

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of the Company and
its wholly and majority owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.

Interim Financial Information

The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information and with the regulations of the Securities and Exchange
Commission ("SEC"), but omit certain information and footnote disclosure
necessary to present the statements in accordance with accounting principles
generally accepted in the United States. The interim financial information as of
June 30, 2002 and for the three and six-month periods ended June 30, 2002 and
2001 is unaudited and has been prepared on the same basis as the audited
consolidated financial statements included in the Company's annual report on
Form 10-K for the year ended December 31, 2001. In the opinion of management,
such unaudited information includes all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the interim
information.

The balance sheet at December 31, 2001 has been derived from the audited
consolidated financial statements at that date but does not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements.

For further information, refer to the Financial Statements and Notes thereto and
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in the Company's Annual Report on Form 10-K. Operating
results for the three and six month periods ended June 30, 2002 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2002.

Accounting Change

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards SFAS No. 141, Business Combinations, ("SFAS
141") and SFAS No. 142, Goodwill and Other Intangible Assets ("SFAS 142")
("Statements"), effective for fiscal years beginning after December 15, 2001.
Under the new rules, goodwill and intangible assets deemed to have indefinite
lives will no longer be amortized but will be subject to annual impairment tests
in accordance with the Statements. Other intangible assets will continue to be
amortized over their useful lives.

The Company has applied the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. Application of the
non-amortization provisions of the Statements has reduced the Company's net loss
by approximately $3.9 million, which is based on the amortization that would
have been recorded without the mandated change. During 2002, the Company
performed the first of the

                                       6

<PAGE>

required impairment tests of goodwill and indefinite lived intangible assets as
of January 1, 2002 and has recorded a charge of $29.3 million to reflect
impairment evident in such assets (see Note 7).

On August 1, 2001, the FASB issued SFAS 144, Accounting For Impairment of
Long-Lived Assets ("SFAS 144"). The Company adopted this pronouncement beginning
January 1, 2002. SFAS 144 prescribes the accounting for the impairment of
long-lived assets (excluding goodwill), and long-lived assets to be disposed of
by sale. SFAS 144 retains the requirement of SFAS 121 to measure long-lived
asset classified as held for sale at the lower of its carrying value or fair
market value less the cost to sell. Therefore, discontinued operations are no
longer measured on a net realizable basis, and future operating results are no
longer recognized before they occur.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent liabilities, at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Net Loss Per Share

Net loss per share is presented in accordance with the provisions of SFAS 128,
Earnings Per Share. Basic net loss per share is computed based on the weighted
average number of shares of common stock outstanding during the period. Diluted
loss per share does not differ from basic loss per share since potential common
shares to be issued upon the exercise of stock options, warrants and conversion
of notes are anti-dilutive for the periods presented.

3.   DISPOSITIONS

In January 2002, the Company sold the assets of its subsidiary Telephonetics,
Inc. to a company formed by Stephen Maggs, a founder and former member of the
Board of Directors of the Company. The total sales price was $1.6 million of
which $0.9 million was in cash and the balance was in the form of promissory
notes and the assumption of debt. The notes are due in 2002 and 2005 for $0.1
million and $0.6 million, respectively.

In February 2002, the Company sold the assets of its subsidiary Softlink, Inc.
to a subsidiary of Springbow Solutions, Inc. The final sales price was $3.8
million of which $3.3 million was paid in cash to the Company, $0.5 million was
paid to a former owner of Softlink as part of the contingent consideration
provision of the original purchase agreement.

In May 2002, the Company sold the assets of one of the business units included
in the consulting business for nominal consideration. An impairment loss of $1.0
million was recorded in the three months ended March 31, 2002 in recognition of
the expected loss on the sale.

The combined gain on the sale of these businesses was $3.0 million, which is
included in Other Income.

                                       7

<PAGE>

4.   DEBT

In March 2002, the Investors purchased an aggregate of $10.0 million of the
Company's 10% Convertible Subordinated Notes due March 2005 ("10% Subordinated
Notes") and 10.0 million warrants to purchase the Company's Common Stock at
$0.30 per share. The 10% Subordinated Notes are convertible into the Company's
Common Stock at $0.30 per share, and the warrants are exercisable for five
years. Interest on the 10% Subordinated Notes may be paid in cash or the
issuance of additional 10% Subordinated Notes at the Company's option. In
addition, the Investors, or other persons acceptable to the Company, may
purchase up to an additional $10.0 million of the 10% Subordinated Notes and
related warrants. The fair value of the warrants which were allocated to the
total proceeds received was $2.3 million and will be charged to interest expense
over the term of the 10% Subordinated Notes. These notes also contain a
beneficial conversion feature amounting to approximately $2.7 million, which was
charged to interest expense upon the receipt of the proceeds.

In May 2002, the Company entered into an Accounts Receivable Financing agreement
under which it can borrow up to $7.5 million, pledging its accounts receivable
and certain other assets as collateral. The definitive agreements provide for a
loan term of one year with interest at prime plus 2% on amounts borrowed. As
part of the Accounts Receivable Financing, the Company issued warrants to the
lender to purchase 1,250,000 shares of Common Stock at $0.30 per share. The fair
value of the warrants was $ 0.3 million which is being amortized over twelve
months from May 2002. Borrowings under the Accounts Receivable Financing are
based on a percentage of "eligible receivables" as defined in the definitive
agreements. At June 30, 2002 borrowings under the agreement amounted to $3.0
million which were reduced to $0.2 million at the Filing Date. As a result of
the filing under the Code, the Company's ability to continue to borrow under
this financing agreement has been impaired and the Company does not expect to
make additional borrowings under this financing agreement.

5.   STOCKHOLDERS' EQUITY

Common Stock

In April 2002, the Company amended its agreement with The Feld Group for
executive services rendered and to be rendered from January 2002 through
December 31, 2002. In lieu of any cash compensation for this period, The Feld
Group will receive 333,333 shares of Common Stock per month along with cash
reimbursement for any out-of-pocket expenses. On April 30, 2002, we issued
1,333,336 shares of Common Stock to The Feld Group pursuant to this agreement.
Also pursuant to the April 2002 amended agreement, a nominee of The Feld Group
received warrants to purchase 1,200,000 shares of Common Stock at a price of
$0.30 per share. The fair value of the warrants is being charged to expense over
nine months through December 31, 2002 as the warrants vest; charges through June
30, 2002 amounted to $0.1 million.

In March 2002, certain of the Company's executive officers agreed to take an
aggregate of 1.1 million shares of Common Stock in lieu of a portion of their
cash compensation for the year ending December 31, 2002. In addition, the
Company amended the employment agreement of one of the Company's Co-chairmen,
extending the term from May 31, 2002 to May 31, 2003 and issued him 500,000
shares of Common Stock in lieu of cash compensation for the extended term.

During the six months ended June 30, 2002, holders of $1.6 million of the
Company's 10% Senior Convertible Notes converted such notes into 1.6 million
shares of Common Stock.

Stock Options

During the six months ended June 30, 2002, under the 1998 Stock Option Plan
("Plan"), the Company granted options to purchase 1.4 million shares of Common
Stock at exercise prices ranging from $0.20 to

                                       8

<PAGE>

$1.00 per share. The weighted-average exercise price of the options granted was
$0.43 per share.

As of June 30, 2002, options to purchase 11.8 million shares of Common Stock
under the Plan were outstanding, of which options to purchase 4.2 million shares
were vested.

6.   RESTRUCTURING CHARGES

Based on a decision reached by management and the Board of Directors in July
2001, the Company announced a restructuring plan on July 31, 2001 ("July Plan"
or "restructuring") designed to further reduce the ongoing operating expenses of
the Company in light of the continued uncertainties in the economy in general,
certain weaknesses in the market for IT outsourcing services, and lack of recent
revenue growth for the Company in particular.

The July Plan comprised workforce reductions of approximately 70 positions and
the exit of certain leased facilities. All 70 positions were eliminated as of
the end of 2001. The Company retained licensed real estate brokers to actively
market each of the identified leased facilities to be exited. To date, no
agreements have been made to exit or sublease any of the identified facilities.

The following table summarizes the status of the July 2001 restructuring
reserve:


<TABLE>
<CAPTION>

(In thousands)                         Total July 2001   Severance and         Exit
                                       Restructuring     Related Costs        Leased
                                       --------------    ------------------
                                                               Facilities
                                                               ----------
<S>                                   <C>           <C>                    <C>
Total reserve charged to expense
for year ended December 31, 2001         $ 3,578      $   646                $ 2,932

Total reserve charged to expense
for quarter ended March 31, 2002             248           --                     248
                                         -------      -------                 -------

Total reserve charged to expense           3,826          646                   3,180

Cash Charges Against Reserve for
year ended December 31, 2001              (1,359)        (646)                   (713)

Cash Charges Against Reserve for
quarter ended March 31, 2002                (405)                                (405)

Cash Charges Against Reserve for

quarter ended June 30, 2002                 (284)                                (284)
Non-cash Charges Against Reserve

for year ended December 31, 2001             (44)                                 (44)
                                         -------                              -------
Balance as of June 30, 2002              $ 1,734      $    --                 $ 1,734
                                         =======      =======                 =======
</TABLE>

7.   ASSET IMPAIRMENT LOSSES

During the second quarter of 2002, the Company re-evaluated the future prospects
of the security and Oracle consulting businesses and concluded that these
businesses no longer fit with the ongoing businesses which the Company continues
to operate. Accordingly, these businesses have been offered for sale. The
Company also assessed the ongoing value of the long-lived assets associated with
the messaging consulting business which is being retained. Pursuant to SFAS 142
and SFAS 144 and SEC Staff Accounting Bulletin No. 100 ("SAB 100"),
Restructuring and Impairment Charges, the Company


                                       9

<PAGE>


performed a review of its long-lived assets because those decisions represented
indicators of impairment to its long-lived assets.

An impairment assessment was made with respect to the long-lived assets
associated with businesses to be sold or shut down. The assessment indicated
that based on the expected selling prices of the businesses to be sold which was
lower than the carrying value of the assets to be sold, there was significant
impairment in the value of the long-lived assets associated with those
businesses. Consequently the Company recorded impairment charges totaling
$20.6 million ($17.8 million of identifiable intangible assets and goodwill, and
$2.8 million of property and equipment). The assessment with respect to the
retained consulting business indicated that, on a held for use basis, there was
impairment evident in such assets. Accordingly, the Company recorded an
impairment charge of $7.7 million related to the identifiable intangible assets
and goodwill associated with that business.

In connection with the above events and circumstances, management also has
re-evaluated the assigned lives used for depreciating and amortizing, as the
case may be, its remaining long-lived assets of its ongoing businesses and has
concluded that the existing lives continue to be appropriate.

In connection with the pending sale of a portion of its professional services
business, the Company determined that the carrying value of the intangible
assets associated with that business was impaired based on the sales price of
the business. Accordingly, an impairment loss of $1.0 million was recorded in
the three months ended March 31, 2002.

In response to certain events and circumstances that transpired in the first
quarter of 2001, the Company performed a review of its long-lived assets to
ascertain if such decisions resulted in impairment in its long-lived assets
pursuant to SFAS 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of, and SAB 100, Restructuring and
Impairment Charges.

An impairment assessment was made with respect to the long-lived assets
associated with businesses to be sold or shut down. The assessment indicated
that, on a held for use basis, there was impairment evident in such assets.
Consequently, the Company recorded an impairment charge in the first half of
2001 of $41.2 million. Long-lived assets that are impaired consist of property
and equipment, identifiable intangible assets and related goodwill. For purposes
of measuring the potential impairment charge, fair value was determined based on
a calculation of discounted cash flows.

8.   SEGMENT INFORMATION

The Company has two reportable segments, Managed Infrastructure Solutions and
Professional Services. The Web Hosting segment was phased out in 2001, and the
associated results from 2001 are captured in the other segment, including $4.0
million of revenue and an operating loss of $5.0 million. The summary unaudited
results of operations


                                       10


<PAGE>

for the three and six months ended June 30, 2002 and 2001 for each of the
segments is shown in the following table:


<TABLE>
<CAPTION>

(In thousands)                                   Three Months Ended       Six Months Ended
                                                      June 30,                 June 30,
                                                ---------------------   ---------------------
                                                   2002        2001       2002         2001
                                                --------    --------   --------    ---------
                                                           (Restated)              (Restated)
Revenues:
<S>                                             <C>         <C>        <C>         <C>
    Managed Infrastructure Solutions            $  7,504    $  9,291    $ 16,506   $  18,078
    Professional Services                          6,948      16,119      16,880      36,237
    Other                                             (2)      5,832         252      12,050
                                                --------    --------    --------   ---------
    Total                                       $ 14,450    $ 31,242    $ 33,638   $  66,365
                                                ========    ========    ========   =========

Operating Income (Loss):
    Managed Infrastructure Solutions            $ (2,843)   $ (2,558)   $ (5,983)  $  (6,581)
    Professional Services                            109         426         379       1,181
    Other                                        (32,278)    (31,401)    (39,009)   (103,413)
                                                --------    --------    --------   ---------
    Total                                       $(35,012)   $(33,533)   $(44,613)  $(108,813)
                                                ========    ========    ========   =========
<CAPTION>

                                                 June 30, December 31,
                                                  2002         2001
                                               ---------  -----------
                                                          (Restated)

Segment Assets:
<S>                                             <C>         <C>
    Managed Infrastructure Solutions             $10,056     $10,872
    Professional Services                          9,165      15,880
    Other                                         14,027      44,046
                                                --------    --------
    Total                                        $33,248     $70,798
                                                ========    ========
</TABLE>

The Company's management generally reviews the results of operations of each
segment exclusive of depreciation and amortization, corporate expenses, non-cash
compensation, restructuring expenses and asset impairment losses related to each
segment. Accordingly, such expenses are excluded from the segment operating
income (loss) and are shown under the Other caption. In addition, all intangible
assets and corporate assets of the Company are included in the Other caption in
segment assets. At the beginning of 2002, Interliant UK Limited, Interliant's
United Kingdom based subsidiary, transitioned to Managed Infrastructure
Solutions from the Professional Services segment, and 2001 results were restated
accordingly. The segment financial statements in 2001 exclude the results of
discontinued operations.


                                       11

<PAGE>

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

You should read the following description of our financial condition and results
of operations in conjunction with the Consolidated Financial Statements and the
Notes thereto included elsewhere in this report on Form 10-Q. This discussion
contains forward-looking statements based upon current expectations that involve
risks and uncertainties.

Forward-Looking Statements And Associated Risks

This Form 10-Q contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the
Securities Act of 1933, as amended. Certain forward-looking statements relate
to, among other things, future results of operations, profitability, growth
plans, sales, expense trends, capital requirements and general industry and
business conditions applicable to our business. Any statements contained herein
that are not statements of historical fact may be deemed to be forward-looking
statements. Our actual results and the timing of certain events may differ
significantly from the results discussed in the forward-looking statements.
These forward-looking statements are based largely upon our current expectations
and are subject to a number of risks and uncertainties. The words "anticipate,"
"believe," "estimate" and similar expressions used herein are generally intended
to identify forward-looking statements. In addition to the other risks described
elsewhere in this report and in other filings by the Company with the Securities
and Exchange Commission, to which you are referred, important factors to
consider in evaluating such forward-looking statements include but are not
limited to: any actions during or the results of our pending bankruptcy
proceeding, our ability to obtain debtor in possession financing on terms
acceptable to us, the uncertainty that demand for our services will increase and
other competitive market factors; changes in our business strategy; an inability
to execute our strategy due to unanticipated changes in our business, our
industry or the economy in general; difficulties in the timely expansion of our
network and data centers or in the acquisition and integration of businesses;
difficulties in retaining and attracting new employees or customers;
difficulties in developing or deploying new services; risks associated with
rapidly changing technology; and various other factors that may prevent us from
competing successfully or profitably in existing or future markets. In light of
these risks and uncertainties, there can be no assurance that the
forward-looking statements contained herein will in fact be realized and we
assume no obligation to update this information.

Overview

We are a provider of managed infrastructure solutions, encompassing messaging,
security, and hosting, plus an integrated set of professional services products
that differentiate and add customer value to these core solutions. We sell to
the large/enterprise market through our direct sales force and to the small and
medium-business market ("SMB") through our INIT Branded Solutions program, which
allows companies to private label our offerings. We provide companies of all
sizes with cost-effective, secure infrastructure and a focused suite of
e-business solutions.

We provide our customers integrated, high-level business value, from development
to implementation to maintenance, that allows them to maintain critical business
functions without maintaining an IT infrastructure and staff that are not
central to their core competencies. We focus on the critical technologies
necessary to support their business success - Internet, messaging, security,
applications, internal systems, network systems and infrastructure.

The accompanying financial statements have been prepared assuming we will
continue as a going


                                       12

<PAGE>

concern. For the period from inception to June 30, 2002, we have incurred net
losses and negative cash flows from operations, and also have expended
significant funds for capital expenditures (property and equipment) and the
acquisitions of businesses. As of June 30, 2002, we had negative working capital
of $40.6 million, including cash and cash equivalents of $2.2 million.

Subsequent to June 30, 2002, our negative cash flow continued to increase and
based on our recently revised business plan and the assumptions on which it is
based we will not have sufficient cash to fund operations beyond the end of the
third calendar quarter of 2002. On August 5, 2002 ("Filing Date") we and our
domestic subsidiaries (including indirectly owned subsidiaries) filed voluntary
petitions in the United States Bankruptcy Court for the Southern District of New
York ("Court") for reorganization under Chapter 11 ("Case") of the United States
Bankruptcy Code ("Code").

The necessity for filing under the Code, in addition to the continued negative
cash flow from operations, was attributable primarily to our inability to
collect funds due from the prior sales of business units, a delay in the
anticipated sale of one of our business units and continued weakening of market
conditions.

We are negotiating with a financial institution to obtain Debtor in Possession
("DIP") financing. Our failure to obtain such financing will impair our ability
to continue as a going concern. There are no assurances that we will obtain such
financing, or if we do, that it will be on terms favorable to us. Such financing
is needed to provide funds to operate our business until we complete the sales
of certain businesses, negotiate relief from lease obligations and settle other
obligations.

On the Filing Date, Bruce Graham, our President and CEO resigned but retained
his seat on our Board of Directors. He was replaced by Francis J. Alfano who had
been our Chief Financial Officer. Also on that date Messrs. Dircks, C. Feld and
Halpern resigned as directors.

We have grown our business by acquiring numerous operating companies providing
managed infrastructure solutions, Web hosting and professional services
solutions, for total consideration of approximately $218.2 million. The purchase
consideration for the acquisitions was in the form of cash, stock or a
combination of cash, stock and issuance of debt. The acquisitions have been
accounted for using the purchase method of accounting, which has resulted in the
recognition, as of June 30, 2002, of approximately $206.9 million of intangible
assets. During 2001 and in the first half of 2002, we recorded impairment
charges for goodwill and other intangibles of $86.9 million of net book value of
such assets. As of June 30, 2002, the net book value of goodwill and intangibles
was $3.3 million. Recoverability of the remaining net book value of intangible
assets is dependent on our ability to successfully operate our businesses and
generate positive cash flows from operations. See notes 2 and 7 of Notes to
Consolidated Financial Statements in this report on Form 10-Q and "Results of
Operations-Restructuring and Impairment Charges" set forth below.

Our principal sources of cash to fund the aforementioned activities were from
the sale of $152.3 million in Common and Preferred Stock in public and private
sales, the sale of $164.8 million of 7% Convertible Subordinated Notes ("7%
Notes"), the sale of units comprising $19.0 million of 8% Convertible
Subordinated Notes ("8% Notes") and warrants to purchase shares of our Common
Stock, and the sale of units comprising $10.0 million of 10% Convertible
Subordinated Notes ("10% Subordinated Notes") and warrants to purchase shares of
our Common Stock.

As of June 30, 2002, we had an accumulated deficit of $436.2 million. The
revenue and income potential of our business is unproven and our limited
operating history makes an evaluation of our prospects difficult.

We expect to continue to incur operating losses, including depreciation and
amortization expense, as well


                                       13

<PAGE>

as negative operating cash flows for the foreseeable future. We cannot be
assured that we will ever achieve profitability on a quarterly or annual basis,
or, if achieved, that we will sustain profitability.

                      Restructuring and Impairment Charges

During the latter half of the first quarter of 2001, we experienced a
substantial decline in revenues and new sales orders. There were negative
economic developments and trends that occurred during this period in our
industry sector, including reduced corporate information technology spending,
the failure of many Internet-related companies, and sharply reduced sales
forecasts. All of these factors caused us to re-evaluate our business focus and
operating plans for the remainder of 2001 and beyond. Such decisions gave rise
to the following actions: Based on a decision reached by our management and the
Board of Directors in late March 2001, on April 2, 2001 we announced a
restructuring plan ("April Plan" or "Restructuring") to further streamline the
business by narrowing our services focus to a core set of offerings. The April
Plan comprised workforce reductions and the exit of certain non-core businesses.
In conjunction with the restructuring, we undertook a review of our long-lived
assets pursuant to SFAS 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of, and SAB No. 100, Restructuring and
Impairment Charges, to ascertain if these decisions and changed conditions
caused an impairment charge.

The April Plan was executed in two phases. Phase 1, which began on April 3,
2001, consisted of a workforce reduction of approximately 200 positions, and
resulted in a charge for the payment of severance and related costs of
approximately $1.7 million. This charge was recognized in the second quarter of
2001.

Phase 2 of the April Plan included exiting, via sales, certain businesses that
we determined to be outside of the redefined scope of our service offerings
along with additional workforce reductions. In July 2001, we exited the Managed
Enterprise Resource Planning ("ERP") and Customer Relationship Management
("CRM") product lines of our managed infrastructure solutions segment, formerly
known as reSOURCE PARTNER, Inc. ("rSP"), which had been a key component of our
scope of services prior to the April Plan. In August 2001, we exited the
remaining operations of rSP. The 2001 losses from discontinued operations of
$10.4 million include losses incurred prior to the measurement date of
approximately $6.5 million, and the estimated losses on disposal of $3.9
million. We have retained approximately $1.3 million of rSP assets, consisting
primarily of computer equipment and software. As of June 30, 2002, the net
liabilities of rSP totaled $0.5 million.

In July 2001, we announced a further business restructuring that included
additional workforce reductions of approximately 70 positions and a plan to exit
certain leased office facilities. We recognized a restructuring charge of $3.6
million during the second half of 2001 for the qualifying costs. In the three
months ended March 31, 2002 we recorded an additional $0.2 million of
restructuring charges to update estimates made for exiting leased facilities.

In October 2001, we sold another of our non-core businesses, our shared and
unmanaged dedicated retail Web hosting business. We will continue to focus our
strategy on OEM, private label and referral partner Web hosting services through
our branded solutions offerings.

As part of the restructuring activities an impairment assessment was made at the
end of the first quarter of 2001 with respect to the long-lived assets
associated with the businesses planned to be sold or shut down. The assessment
indicated that, on a held for use basis, there was impairment evident in such
assets.


                                       14

<PAGE>

Further, based on our assessment of internal and external facts and
circumstances to which the impairment was attributable, we concluded that the
impairment indicators arose in the latter half of the first quarter of 2001. In
connection therewith we recorded impairment charges aggregating $36.2 million.
Long-lived assets that are impaired consist of property and equipment,
identifiable intangible assets and related goodwill. For purposes of measuring
the impairment charge, fair value was determined based on a calculation of
discounted cash flows or net realizable value if known.

In connection with the disposition of our investment in Interliant Europe, B.V.
("Interliant Europe"), we conducted an impairment assessment with respect to the
long-lived assets associated with Interliant Europe, and the assessment
indicated that there was impairment evident in such assets. The fair value of
the long-lived assets was determined based on the terms of the definitive
agreement that we executed in August 2001. Consequently, we recorded an
impairment charge of $4.7 million, to write-off the entire net book value of
property and equipment ($4.4 million), identifiable intangible assets ($0.2
million) and other long-term assets ($0.1 million) related to Interliant Europe.

We determined that there were potential impairment indicators present in our
core hosting and professional services businesses that arose during the third
quarter of 2001 as a result of the continued economic uncertainties in general,
certain weaknesses in our market and lack of revenue growth for the Company in
particular. Accordingly, we conducted an impairment assessment with respect to
long-lived assets associated with such businesses. Further, for businesses
previously identified for sale or disposition, we updated the fair value
determination based on more current pricing terms from recent negotiations with
prospective buyers. Based on these assessments, we determined that there was
impairment evident in the assets associated with our core hosting businesses and
the PeopleSoft ERP professional services business. Consequently, we recorded
impairment charges of $85.5 million to write-off the net book value of certain
of the fixed assets, including software, used in those businesses ($51.4
million), other long term assets ($1.4 million) and identifiable intangible
assets and goodwill ($32.7 million) related to those businesses.

In the first quarter of 2002, based on the pending sale of one of the business
units included in the Professional Services segment, we recorded an impairment
loss with respect to the intangible assets associated with that unit of $1.0
million.

During the second quarter of 2002, we re-evaluated the future prospects of the
security and Oracle consulting businesses and concluded that these businesses no
longer fit with the ongoing businesses, which we continue to operate.
Accordingly, these businesses have been offered for sale. As of August 13, 2002
none of the businesses have been sold. We also assessed the ongoing value of the
long-lived assets associated with the messaging consulting business, which is
being retained. Pursuant to Statement of Financial Accounting Standards
No. SFAS 142, Goodwill and Other Intangible Assets ("SFAS 142"), and SFAS
No. 144 Accounting for Impairment of Long Lived Assets ("SFAS 144") and SEC
Staff Accounting Bulletin No. 100 (SAB 100), Restructuring and Impairment
Charges, we performed a review of our long-lived assets because those decisions
represented indicators of impairment to our long-lived assets.

An impairment assessment was made with respect to the long-lived assets
associated with businesses to be sold or shut down. The assessment indicated
that based on the expected selling prices of the businesses to be sold, there
was significant impairment in the value of the long-lived assets associated with
those businesses. Consequently we recorded impairment charges totaling $20.6
million ($17.8 million of identifiable intangible assets and goodwill, and $2.8
million of property and equipment). The assessment with respect to the retained
consulting business indicated that, on a held for use basis, there was
impairment evident in such assets. Accordingly, we recorded an impairment charge
of $7.7 million of identifiable intangible assets and goodwill associated with
that business.

                                       15

<PAGE>

In connection with the above events and circumstances, management also has
re-evaluated the assigned lives used for depreciating and amortizing, as the
case may be, our remaining long-lived assets of our ongoing businesses and has
concluded that the existing lives continue to be appropriate.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United
States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amount of assets and
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities at the date of our financial statements. Actual results may
differ from these estimates under different assumptions or conditions.

Critical accounting policies are defined as those that are reflective of
significant judgments and uncertainties, and potentially result in materially
different results under different assumptions and conditions. We believe that
our critical accounting policies are primarily related to revenue recognition,
as described below in "Results of Operations". For a detailed discussion on the
application of these and other accounting policies, see Note 2 in the Notes to
Consolidated Condensed Financial Statements herein and Note 2 to the
Consolidated Financial Statements included in our Annual Report on Form 10K for
the year ended December 31, 2001.

Results of Operations

Our reportable segments currently include managed infrastructure solutions and
professional services. The web hosting business was previously classified as a
segment but was sold in October 2001. Our current major lines of business
included in each of these segments are as follows:

Managed Infrastructure Solutions            Professional Services
Managed Messaging                           Messaging and Collaboration Services
Managed Hosting                             Security and Networking Solutions
Managed Security                            Enterprise Resource Planning ("ERP")
Branded Web Hosting ("Private Label")

Our revenue streams consist of recurring service fees, and non-recurring
professional services and product sales. We sell managed infrastructure
solutions for contractual periods generally ranging from one month to three
years. Hosting revenues are recognized ratably over the contractual period as
services are performed. Incremental fees for excess bandwidth usage and data
storage are billed and recognized as revenue in the period that customers
utilize such services. Payments received and billings made in advance of
providing hosting services are deferred until the services are provided.

Professional services revenues generally are recognized as the services are
rendered, provided that no significant obligations remain and collection of the
receivable is considered probable. Substantially all of our professional
services contracts call for billings on a time and materials basis. Some of our
contracts contain milestones and/or customer acceptance provisions. For these
contracts, revenue is recognized as milestones are performed and accepted by the
customer or when customer acceptance is attained.

                                       16

<PAGE>

Certain customer contracts contain multiple elements under which we sell a
combination of any of the following: managed infrastructure solutions and
professional services, computer equipment, software licenses and maintenance
services to customers. We have determined that objective evidence of fair value
exists for all elements and have recorded revenue for each of the elements as
follows: (1) revenue from the sale of computer equipment and software products
is recorded at the time of delivery; (2) revenue from service contracts is
recognized as the services are performed; and (3) maintenance revenue and
related costs are recognized ratably over the term of the maintenance agreement.

Under certain arrangements, we resell computer equipment and/or software and
maintenance purchased from various computer equipment and software vendors. We
are recording the revenue from these products and services on a gross basis
pursuant to Emerging Issues Task Force ("EITF") 99-19, Reporting Revenue Gross
as a Principal versus Net as an Agent. Under these arrangements, we determined
that we are the primary obligor. We present the end-user with a total solution
from a selection of various vendor products, set final prices and perform
certain services. Additionally, we have credit and back-end inventory risk.

In some circumstances we resell software, and in connection with such sales, we
apply the provisions of Statement of Position ("SOP") 97-2, Software Revenue
Recognition, as amended by SOP 98-4. Under SOP 97-2, we recognize license
revenue upon shipment of a product to the end-user if a signed contract exists,
the fee is fixed and determinable and collection of the resulting receivable is
probable. For contracts with multiple elements (e.g., software products,
maintenance and other services), we allocate revenue to each element of the
contract based on vendor specific objective evidence of the element's fair
value.

Cost of revenues primarily consists of salaries and related expenses associated
with professional services and data center operations, data center facilities
costs, costs of hardware and software products sold to customers, and data
communications expenses, including one-time fees for circuit installation and
variable recurring circuit payments to network providers. Monthly circuit
charges vary based upon circuit type, distance and usage, as well as the term of
the contract with the carrier.

Sales and marketing expense consists of personnel costs associated with the
direct sales force, internal telesales, product development and product
marketing employees, as well as costs associated with marketing programs,
advertising, product literature, external telemarketing costs and corporate
marketing activities, including public relations.

General and administrative expense includes the cost of customer service
functions, finance and accounting, human resources, legal and executive
salaries, corporate overhead, acquisition integration costs and fees paid for
professional services.

The following is a discussion of our results from continuing operations for the
three and six months ended June 30, 2002 and 2001.

Three Months Ended June 30, 2002 and 2001

Revenues

Revenues decreased $16.8 million, from $31.2 million for the three months ended
June 30, 2001 to $14.4 million for the corresponding 2002 period. The decrease
in revenues was due primarily to the disposition of the Retail Web hosting
business in the fourth quarter of 2001, reduced revenues from the Professional

                                       17

<PAGE>

Services segment and the disposition of two business units in the early part of
the first quarter of 2002.

Managed Infrastructure revenues decreased $1.8 million, from $9.3 million for
the three months ended June 30, 2001 to $7.5 million for the corresponding 2002
period. Web hosting revenues were $3.6 million in the 2001 period and were not
present in the corresponding 2002 period due to the sale of that business.
Professional Services revenues decreased $9.2 million, from $16.1 million during
the three months ended June 30, 2001 to $6.9 million for the corresponding 2002
period. This decrease was the result of reduced activity in the information
technology sector and the sale of one of the Professional Services business
units in February 2002.

Cost of Revenues

Cost of revenues decreased by $11.6 million, from $20.5 million for the three
months ended June 30, 2001 to $8.9 million for the corresponding 2002 period.
This decrease was due primarily to the absence of costs related to the Retail
Web hosting, reductions in compensation costs related to the Professional
Services segment as a result of the sale of one business unit in early 2002 and
staff reductions resulting from the 2001 restructuring initiatives.

Gross margin for the three months ended June 30, 2002 and 2001 was 38.6% and
34.5%, respectively. The increase in gross margin is primarily the result of a
higher proportion of revenue from our managed infrastructure solution services,
which typically generate higher gross margins as compared to Professional
Services and product revenues. Gross margin from the sale of products was 15.3%
and 23.8% for the three months ended June 30, 2002 and 2001, respectively. The
decrease in gross margin was the result of a contraction in our product business
and decreasing margins in product business in general.

Sales and Marketing

Sales and marketing expense decreased by $7.0 million, from $10.3 million for
the three months ended June 30, 2001 to $3.3 million for the corresponding 2002
period. This decrease was attributable primarily to the elimination of marketing
expenditures related to the Retail Web hosting business and to a company wide
initiative to reduce expenses.

General and Administrative

General and administrative expense (excluding non-cash compensation) decreased
by $10.6 million, from $16.8 million for the three months ended June 30, 2001 to
$6.2 million for the corresponding 2002 period. This decrease in general and
administrative expense was attributable to the elimination of the Retail Web
hosting business, reductions in compensation expenses as a result of the 2001
restructuring initiatives and to a lesser extent to the sale of two business
units in early 2002.

Non-cash compensation

Non-cash compensation expense increased by $7.7 million, from negative $7.1
million in 2001 to $0.6 million in 2002.

The non-cash compensation expense recorded in the three months ended June 30,
2001 related to options we issued in January 2000 to purchase 1.5 million shares
of Common Stock at an average exercise price

                                       18

<PAGE>

of $18.00 per share to our then-current CEO. The average exercise price of the
options was below the fair value of the Common Stock as of the measurement date,
which required the recognition of approximately $30.0 million as compensation
expense over the four-year vesting period of the options on a graded vesting
basis. In April 2001, said CEO terminated his employment with us. In connection
therewith, we recorded an adjustment in the quarter ended June 30, 2001 to
reverse compensation charges aggregating approximately $8.4 million recorded in
prior periods to reflect the excess of the charges recognized on a graded
vesting basis over the value of the options that ratably vested as of the date
of his termination. There is no compensation charge in 2002 related to such
options.

During the three months ended June 30, 2002, we recorded non-cash compensation
charges aggregating $0.6 million stemming from stock issuances to The Feld Group
for payment for executive-level services rendered under its contract with us and
amortization of warrant issuances and option grants in 2001 to The Feld Group.

Depreciation

Depreciation expense decreased by $6.2 million, from $8.0 million for the three
months ended June 30, 2001 to $1.8 million for the corresponding 2002 period.
The decrease in depreciation expense was attributable to the reduction in cost
basis in our fixed assets as a result of impairment charges recorded in 2001,
which reduced the ongoing periodic depreciation on the remaining asset values.

Amortization of Intangible Assets

Amortization expense decreased by $9.6 million, from $10.4 million for the three
months ended June 30, 2001 to $0.4 million for the corresponding 2002 period.
This decrease in amortization expense was attributable to the reduction in the
carrying value of our intangible assets as a result of impairment charges
recorded in 2001 as well as the elimination of amortization of the majority of
our intangible assets pursuant to the provisions of SFAS 142. In the future, we
will be required to make periodic assessments of the fair value of our
intangible assets and record impairment charges if the assessment shows a value
less than the carrying value.

Impairment Loss on Long-lived Assets

In the three months ended June 30, 2002, in conjunction with the proposed
disposition of two of our business units and continued deterioration of our
remaining businesses, we performed a review of our long-lived assets to
ascertain if such decisions resulted in an impairment in our long-lived assets
pursuant to SFAS 142 and SFAS 144 and SAB 100, Restructuring and Impairment
Charges.

An impairment assessment was made with respect to the long-lived assets
associated with businesses to be sold or shut down. The assessment indicated
that based on the expected selling prices of the businesses to be sold, which
was lower than the carrying value of the assets to be sold, there was
significant impairment in the value of the long-lived assets associated with
those businesses. Consequently we recorded impairment charges totaling $20.6
million ($17.8 million of identifiable intangible assets and goodwill, and $2.8
million of property and equipment). The assessment with respect to the retained
consulting business indicated that, on a held for use basis, there was
impairment evident in such assets. Accordingly, we recorded an impairment charge
of $7.7 million related to the identifiable intangible assets and goodwill
associated with that business. In the quarter ended June 30, 2001, we recorded
impairment charges of $5.0 million related primarily to the long-lived assets
associated with our European subsidiaries, which we disposed of in August 2001.

                                       19

<PAGE>

Interest income (expense)

Net interest expense decreased $1.6 million from $3.8 million in the three
months ended June 30, 2001 to $2.2 million in the comparable 2002 period.
Interest expense decreased $2.0 million, from $4.2 million in the three months
ended June 30, 2001 to $2.2 million in the comparable 2002 period due primarily
to the net reduction in interest expense related to our 7% Notes which were
restructured in an exchange transaction in December 2001 through the issuance of
10% Convertible Senior Notes ("10% Senior Notes") equal to approximately 27% of
the face amount of the 7% Notes. Pursuant to provisions of SFAS No. 15,
Accounting by Debtors and Creditors for Troubled Debt Restructurings, ("SFAS
15") all of the interest on the 10% Senior Notes to maturity (2006) was recorded
at the time of the restructuring and consequently, no interest is recorded on
the 10% Senior Notes in the current period. This reduction was partially offset
by increased interest expense resulting from notes sold to Charterhouse Equity
Partners III L.P. and Mobius Technology Ventures VI LP (formerly Softbank) and
its related funds (collectively, "Investors") in the end of the first quarter of
2002 and third quarter of 2001. Interest income decreased $0.4 million from $0.5
million in the three months ended June 30, 2001 to $0.1 million in the
comparable 2002 period due to the reduced amount of cash available to invest.

Six Months ended June 30, 2002 and 2001

Revenues

Revenues decreased $32.8 million, from $66.4 million for the six months ended
June 30, 2001 to $33.6 million for the corresponding 2002 period. The decrease
in revenues was due primarily to the disposition of the Retail Web hosting
business in the fourth quarter of 2001, reduced revenues from the Professional
Services segment and the disposition of two business units in the early part of
the first quarter of 2002.

Managed Infrastructure revenues decreased $1.6 million, from $18.1 million for
the six months ended June 30, 2001 to $16.5 million for the corresponding 2002
period. Web hosting revenues were $7.6 million in the 2001 period and were not
present in the 2002 period due to the sale of that business. Professional
Services revenues decreased $19.3 million, from $36.2 million during the six
months ended June 30, 2001 to $16.9 million for the corresponding 2002 period.
This decrease was the result of reduced activity in the information technology
sector and the sale of one of the Professional Services business units in
February 2002.

Cost of Revenues

Cost of revenues decreased by $22.9 million, from $44.2 million for the six
months ended June 30, 2001 to $21.3 million for the corresponding 2002 period.
This decrease was due primarily to the absence of costs related to the Retail
Web hosting, reductions in compensation costs related to the Professional
Services segment as a result of the sale of one business unit in early 2002 and
staff reductions resulting from the 2001 restructuring initiatives.

Gross margin for the six months ended June 30, 2002 and 2001 was 36.6% and
33.3%, respectively. The increase in gross margin is primarily the result of a
higher proportion of revenue from our managed infrastructure solution services,
which typically generate higher gross margins as compared to Professional
Services and product revenues. Gross margin from the sale of products was 18.7%
and 21.2% for the six months ended June 30, 2002 and 2001, respectively. The
decrease in gross margin was the result of a contraction in our product business
and decreasing margins in product business in general.



                                       20

<PAGE>

Sales and Marketing

Sales and marketing expense decreased by $14.6 million, from $22.2 million for
the six months ended June 30, 2001 to $7.6 million for the corresponding 2002
period. This decrease was attributable primarily to the elimination of marketing
expenditures related to the Retail Web hosting business and to a company wide
initiative to reduce expenses.

General and Administrative

General and administrative expense (excluding non-cash compensation) decreased
by $19.0 million, from $33.4 million for the six months ended June 30, 2001 to
$14.4 million for the corresponding 2002 period. This decrease in general and
administrative expense was attributable to the elimination of the Retail Web
hosting business, reductions in compensation expenses as a result of the 2001
restructuring initiatives and to a lesser extent to the sale of two business
units in early 2002.

Non-cash compensation

Non-cash compensation expense increased by $5.5 million, from negative $4.8
million in 2001 to $0.7 million in 2002.

The non-cash compensation expense recorded in the six months ended June 30, 2001
related to options we issued in January 2000 to purchase 1.5 million shares of
Common Stock at an average exercise price of $18.00 per share to our
then-current CEO. The average exercise price of the options was below the fair
value of the Common Stock as of the measurement date, which required the
recognition of approximately $30.0 million as compensation expense over the
four-year vesting period of the options on a graded vesting basis. In April
2001, said CEO terminated his employment with us. In connection therewith, we
recorded an adjustment in the quarter ended June 30, 2001 to reverse
compensation charges aggregating approximately $8.4 million recorded in prior
periods to reflect the excess of the charges recognized on a graded vesting
basis over the value of the options that ratably vested as of the date of his
termination. There is no compensation charge in 2002 related to such options.

During the six months ended June 30, 2002, we recorded non-cash compensation
charges aggregating $0.7 million stemming from stock issuances to one of our
Co-Chairmen in lieu of all cash compensation due under his employment agreement
for the current term, to certain of our senior executive officers in lieu of a
portion of their cash compensation for the balance of 2002, and to The Feld
Group for payment for executive-level services rendered under its contract with
us and amortization of warrant issuances and option grants in 2001 to The Feld
Group. As a result of the resignation on August 1, 2002 of Bruce Graham, a
member of The Feld Group, as our Chief Executive Officer and President, no
further issuances of our stock will be made to The Feld Group under this
contract. Effective August 1, 2002 and on a prospective basis only, five of
those senior executive officers who previously received shares of our common
stock in exchange for a reduction in their cash compensation, had their cash
compensation reinstated to the levels that existed prior to the reduction.

Depreciation

Depreciation expense decreased by $11.3 million, from $14.9 million for the six
months ended June 30, 2001 to $3.6 million for the corresponding 2002 period.
The decrease in depreciation expense was attributable to the reduction in cost
basis in our fixed assets as a result of impairment charges recorded in 2001,
which reduced the ongoing periodic depreciation on the remaining asset values.

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<PAGE>

Amortization of Intangible Assets

Amortization expense decreased by $21.7 million, from $22.6 million for the six
months ended June 30, 2001 to $0.9 million for the corresponding 2002 period.
This decrease in amortization expense was attributable to the reduction in the
carrying value of our intangible assets as a result of impairment charges
recorded in 2001 as well as the elimination of amortization of the majority of
our intangibles pursuant to the provisions of SFAS 142. In the future, we will
be required to make periodic assessments of the fair value of our intangible
assets and record impairment charges if the assessment shows a value less than
the carrying value.

Impairment Loss on Long-lived Assets

In the six months ended June 30, 2002, in conjunction with the disposition and
proposed dispositions of two of our business units and continued deterioration
of our remaining businesses, we performed a review of our long-lived assets to
ascertain if such decisions resulted in an impairment in our long-lived assets
pursuant to SFAS 142, and SAB 100, Restructuring and Impairment Charges.

An impairment assessment was made with respect to the long-lived assets
associated with businesses to be sold or shut down. The assessment indicated
that based on the expected selling prices of the businesses to be sold, which
were lower than the carrying value of the assets to be sold, there was
significant impairment in the value of the long-lived assets associated with
those businesses. Consequently we recorded impairment charges totaling $21.6
million ($18.8 million of identifiable intangible assets and goodwill, and $2.8
million of property and equipment). The assessment with respect to the retained
consulting business indicated that, on a held for use basis, there was
impairment evident in such assets. Accordingly, we recorded an impairment charge
of $7.7 million related to the identifiable intangible assets and goodwill
associated with that business.

In the six months ended June 30, 2001, we recorded impairment charges with
respect to long-lived assets associated with businesses to be sold or shut down
aggregating $41.2 million. Long-lived assets that were impaired consisted of
property and equipment ($13.0 million), identifiable intangible assets and
goodwill ($27.7 million) and other long-term assets ($0.5 million).

Other Income

Other income includes a gain of $3.0 million for two non-core businesses sold in
2002.

Interest income (expense)

Net interest expense was $6.7 million in both the 2001 and 2002 Interest expense
decreased $1.3 million, from $8.2 million in the six months ended June 30, 2001
to $6.9 million in the comparable 2002 period due primarily to the net reduction
in interest expense related to our 7% Notes which were restructured in an
exchange transaction in December 2001 through the issuance of 10% Senior Notes
equal to approximately 27% of the face amount of the 7% Notes. Pursuant to
provisions of SFAS 15, all of the interest on the 10% Senior Notes to maturity
(2006) was recorded at the time of the restructuring and consequently, no
interest is recorded on the 10% Senior Notes in the current period This
reduction was partially offset by increased interest expense resulting from
notes sold to the Investors in the end of the first quarter of 2002 and third
quarter of 2001 and the recognition of $2.7 million of interest expense related
to the beneficial conversion feature of our 10% Convertible Subordinated Notes
sold in March 2002. Interest income decreased $1.3 million from $1.4 million in
the six months ended June 30, 2001 to

                                       22

<PAGE>

$0.1 million in the comparable 2002 period due to the reduced amount of cash
available to invest.

Liquidity and Capital Resources

We have financed our operations and acquisitions primarily from private
placements of debt and equity, and our initial public offering of Common Stock.
For the period from inception to June 30, 2002, we have incurred net losses and
negative cash flows from operations, and have also expended significant funds
for capital expenditures (property and equipment) and the acquisitions of
businesses. As of June 30, 2002, we had negative working capital of $40.6
million, including cash and cash equivalents of $2.2 million.

Subsequent to June 30, 2002, our negative cash flow continued to increase and
based on our recently revised business plan and the assumptions on which it is
based we will not have sufficient cash to fund operations beyond the end of the
third calendar quarter of 2002. On August 5, 2002 we and our domestic
subsidiaries (including indirectly owned subsidiaries) filed voluntary petitions
in the Court for reorganization under Chapter 11 of the United States Bankruptcy
Code ("Code").

The necessity for filing under the Code, in addition to the continued negative
cash flow from operations, was attributable primarily to our inability to
collect funds due from the prior sales of business units, a delay in the
anticipated sale of one of our business units and continued weakening of market
conditions.

In January and February, 2002 we sold two non-core business units for aggregate
cash proceeds of $3.8 million. On March 8, 2002 the Investors purchased 100
units, with each unit consisting of $100,000 principal amount of our 10%
Subordinated Notes and 100,000 warrants for the purchase of shares of our Common
Stock for a total sales price of $10.0 million. In May 2002, we entered into an
agreement with a financial institution to obtain a working capital financing
facility, which would allow us to finance up to $7.5 million of our accounts
receivable ("Accounts Receivable Financing"). At June 30, 2002, there was $3.0
million outstanding under this agreement. Our ability to continue to utilize
this working capital financing facility has been impaired because of the filing
of the Case. At the Filing Date, the liability under this facility was $0.2
million and we do not expect to be able to borrow any additional funds under
this facility.

     As of August 1, 2002 we had the following principal amounts outstanding on
our 10% Senior Convertible Notes ($44.9 million); 10% Subordinated Notes ($10.0
million); 8% Notes ($20.4 million) and 7% Notes ($0.6 million).

     In December 2001 we consummated an exchange of $164.2 million (99.6%) of
our then outstanding 7% Notes for new 10% Senior Notes, cash and warrants. Under
the terms of that transaction, we issued $270 principal amount of 10% Senior
Notes convertible into 270 shares of our Common Stock, issued warrants to
purchase 67.50 shares of our Common Stock at an exercise price of $0.60 per
share, and paid $70 in cash in exchange for each $1,000 principal amount of 7%
Notes that were tendered in that transaction. The exchange transaction has been
accounted for pursuant to SFAS 15. Accordingly, upon closing, the difference
between the consideration issued and the present carrying value of the notes
exchanged, reduced by the gross interest costs from the issuance date to
maturity ($27.9 million) and transaction costs on the 10% Senior Notes issued,
has been treated as an extraordinary gain. Semi-annual interest payments on the
10% Senior Notes may, at our option, be made in cash or in the form of issuing
additional 10% Senior Notes thereby reducing our cash requirements. In the six
months ended June 30, 2002 we issued $2.1 million of 10% senior notes and $0.8
million of 8% notes for interest earned on such notes.

During the six months ended June 30, 2002, cash used in operating activities was
$11.2 million. The net loss of $47.3 million included non-cash charges for
depreciation, amortization, interest and other non-cash charges totaling $36.2
million. Cash was provided by decreases in accounts receivable and prepaid and
other current assets totaling $1.9 million offset by a net decrease in operating
liabilities of $2.0 million.

During the six months ended June 30, 2002, we added $1.5 million of network
software and equipment,


                                       23

<PAGE>

furniture and office equipment and leasehold improvements. Such fixed asset
additions were primarily driven by our data center and customer care facilities'
expansion and customer-driven computer equipment and software purchases to
support revenue growth.

In prior periods, we have financed in excess of $30 million of computer
equipment and furniture from available lease facilities. At June 30, 2002 there
were $14.0 million in equipment lease obligations due of which $9.6 million is
due in one year. There is no additional lease financing currently available to
us. We will continue to seek such financing activities and obtain additional
equipment financing in the future, although no assurances can be given that
additional financing will be available when needed.

In addition to funding ongoing operations and capital expenditures, our
principal commitments consist of non-cancelable operating leases and contingent
earnout payments to certain sellers of operating companies acquired by us. In
connection with acquisitions completed in 1999 and 2000, as part of the purchase
agreements, we agreed to make contingent earnout payments to the sellers if
stated objectives were achieved. As of June 30, 2002, all contingent earnouts
were finalized and we will pay an aggregate of $6.5 million, including interest
at 7% per annum, in monthly or quarterly installments through January 2005. Such
obligations are evidenced by notes issued to the respective sellers.

We are negotiating with a financial institution to obtain Debtor in Possession
("DIP") financing. There are no assurances that we will obtain such financing,
or if we do, that it will be on terms favorable to us. Such financing is needed
to provide funds to operate our business until we complete the sales of certain
businesses, negotiate relief from lease obligations and settle other
obligations. Even if such financing were obtained, there are no assurances that
we will be able to sell those certain businesses, negotiate relief from those
lease obligations or settle our other obligations, or that the timing and/or the
terms of these events will be favorable to us. The foregoing is a
forward-looking statement and is based on our current business plan and the
assumptions on which it is based, including, but not limited to, our ability to
meet revenue forecasts, receive the funding anticipated under the DIP financing,
receive the anticipated proceed from sales of businesses and contingent
consideration from sales of businesses made in 2001, reduce our cash obligations
on leases and other liabilities and continue to receive the cost savings and
cash generation benefits our restructuring plans were designed to produce. If
our plans change or one or more of our assumptions prove to be inaccurate, we
may be required to seek additional capital or consider the sale of certain
business divisions and/or assets sooner than we currently anticipate in order to
continue operations and meet our financial obligations.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We have limited exposure to financial market risks, including changes in
interest rates. Substantially all of our indebtedness bears interest at a fixed
rate to maturity, which therefore minimizes our exposure to interest rate
fluctuations.



                                       24

<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

         On August 5, 2002 the Company and its domestic subsidiaries filed
voluntary petitions for relief under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the Southern District of New York
(Case Nos. 02-023150 thru 02-151, 02-23153, 02-23155, 02-23158, thru 02-163,
02-23166 and 02-23168).


ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

(c) In the six months ended June 30, 2002, no options to purchase shares of
Common Stock were exercised.

     1.  Pursuant to the Company's April 2002 amended agreement with The Feld
Group, Inc., Interliant issued 333,333 shares of its restricted Common Stock in
lieu of any cash compensation to The Feld Group, Inc. on each of May 31, 2002,
June 28, 2002 and July 31, 2002.

     2.  During July 2002, Interliant issued 93,750 shares for a purchase
price of $0.085 per share in connection with its Employee Stock Purchase Plan.

     3.  In June 2002, the Company paid interest due to the holders of the
Company's 10% Convertible Senior Notes due 2006 ("10% Senior Notes") in the
aggregate principal amount of $2,091,825.50 in the form of Additional
Securities, or PIK Notes, pursuant to the Indenture dated as of December 15,
2001 between Interliant and The JP Morgan Chase Bank relating to the Senior
Notes.

     4.  On July 1, 2002, the Company issued additional 8% Convertible
Subordinated Notes dues June 30, 2003 (8% Notes) to Charterhouse Equity Partners
III L.P. and Mobius Technology Ventures VI L.P. and its related funds in the
principal amount of $399,481 as the interest payment on the 8% Notes issued in
August of 2001 in the original principal amount of $19,000,000, and interest on
similar 8% Notes previously issued each quarter since August 2001 as payment of
accrued interest on the previously issued 8% Notes. The interest notes have the
same terms as the original notes.

         The issuance of the restricted stock described in paragraph 1 and the
issuance of the notes described in paragraphs 3 and 4 were exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) of the
Act and/or Regulation D promulgated thereunder, as transactions by an issuer not
involving a public offering.

ITEM 3.   DEFAULT UPON SENIOR SECURITIES

         In light of the fact that Company filed voluntary Chapter 11 petitions,
the Company did not make its principal and interest payments on certain
capitalized leases.

         In addition, the underlying agreements for the Company's 10%
Convertible Senior Notes due 2006, 8% Convertible Subordinated Notes due June
30, 2003 and 10% Convertible Subordinated Notes Due February 28, 2000 each state
that the voluntary commencement of a petition under the laws of bankruptcy is an
event of default. As of the date of this filing the Company is current in its
payments on these instruments.

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

The Annual Meeting of Stockholders of the Company was held on June 13, 2002. A
majority of the Company's voting shares were present at the meeting, etiher in
person or by proxy.

         At such meeting, the stockholders took the following actions with vote
tallies set forth below:

         1. Elected ten directors;

            Nominee               For           Against        Abstain/withheld

            Leonard J. Fassler   45,328,281                         422,729
            Bradley A. Feld      45,285,133                         465,877
            Howard S. Diamond    45,330,361                         420,249
            Thomas C. Dircks     45,282,323                         468,687
            Charlie Feld         45,287,145                         463,865
            Jay M. Gates         45,327,523                         423,487
            Bruce E. Graham      45,289,016                         461,994
            Merrill M. Halpern   45,329,403                         421,607
            Charles R. Lax       45,330,561                         420,449
            David M. Walke       45,331,301                         419,709

         2. Approved the issuance of 93,468,580 shares of Interliant's Common
Stock upon conversion of 10% Convertible Subordinated Notes of Interliant due
2005 (the "New Notes") and upon exercise of warrants which may be issued to
parties that purchase such New Notes including, without limitation, Charterhouse
Equity Partners III L.P. and Mobius Technology Ventures VI L.P. and its related
funds;


                                  For           Against        Abstain
                                 30,752,297     324,899         29,061

         3. Approved an amendment to Interliant's Amended Certificate of
Incorporation to increase the number of authorized shares of Interliant's Common
Stock from 250,000,000 shares to 500,000,000 shares;

                                  For           Against        Abstain
                                 45,200,971     520,218         29,821


         4. Approved a series of amendments to Interliant's Amended Certificate
of Incorporation to effect, at any time prior to the 2003 Annual Meeting of
Stockholders, a reverse stock split of the Company's Common Stock whereby each
outstanding 5, 7, 10, 12, 15, 18 or 20 shares would be combined, converted and
changed into one share of Common Stock, with the effectiveness of one of such
amendments and the abandonment of the other amendments, or the abandonment of
all amendments as permitted under Section 242(c) of the Delaware General
Corporation Law, to be determined by the Company's Board of Directors;

                                  For           Against        Abstain
                                 45,258,199     406,439         86,372


         5. Ratified the issuance of Interliant securities to certain of its
officers, directors and related parties in lieu of cash compensation; and

                                  For           Against        Abstain
                                 30,532,642     507,037         67,078


         6. Ratified the appointment of Ernst & Young LLP as Interliant's
independent auditors for the fiscal year ending December 31, 2002;

                                  For           Against        Abstain
                                 45,689,771      48,985         12,254

For further information respecting all such matters reference is made to the
Company's definitive proxy statement dated May 9, 2002.



ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

99-1     Certification by the Company's chief executive officer pursuant to 18
         U.S.C. Section 1350, as adopted pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002.

99-2     Certification by the Company's principal accounting officer pursuant to
         18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002.

(b)   Reports on Form 8-K:

Form 8-K, filed on May 20, 2002, whereby Interliant, Inc. issued a press release
announcing that it had received a Nasdaq Staff Determination that the Company's
securities are subject to delisting from the Nasdaq National Market and that the
Company would request a hearing to appeal the determination.

Form 8-K, filed on July 11, 2002, whereby Interliant, Inc. issued a press
release announcing that the Company was notified by the Nasdaq Listing
Qualification Staff that its common stock would be delisted


                                       25

<PAGE>

from the Nasdaq National Market effective July 10, 2002.

Form 8-K, filed on July 23, 2002, whereby Interliant, Inc. issued a press
release giving an update on its liquidity and announcing that the Company does
not have sufficient cash to fund its operations beyond the end of the third
calendar quarter of 2002.

Form 8K, filed on August 8, 2002 whereby Interliant announced that it had filed
for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code and also announced
the appointment of Francis J. Alfano as President, CEO and a director, and the
resignations of Bruce Graham as President and CEO, Steve Munroe as Chief
Operating Officer and Messrs. Dircks, Halpern and C. Feld as directors.



                                       26

<PAGE>

                                   SIGNATURES

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

                                Interliant, Inc.

         Date:  August 14, 2002                  /s/ FRANCIS J. ALFANO
                                            ----------------------------
                                                Francis J. Alfano
                                                Chief Executive Officer
                                                and President


         Date:  August 14, 2002                  /s/ LOGAN SNOW
                                            -----------------------------
                                                 Logan Snow
                                                 Controller
                                                 (Principal Accounting Officer)



                                       27