<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

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

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

                                   FORM 10-Q

<TABLE>
<C>        <S>
   /X/     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
           SECURITIES EXCHANGE ACT OF 1934.
</TABLE>

                 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

                                       OR

<TABLE>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
           SECURITIES EXCHANGE ACT OF 1934.
</TABLE>

        FOR THE TRANSITION PERIOD FROM ______________ TO ______________

<TABLE>
<CAPTION>
     COMMISSION         EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER; STATE OF INCORPORATION; ADDRESS,     IRS EMPLOYER
        FILE            INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL  IDENTIFICATION
       NUMBER           EXECUTIVE OFFICES                                                                             NUMBER
---------------------   ----------------------------------------------------------------------------------------  --------------
<S>                     <C>                                                                                       <C>
000-31531               NEON Communications, Inc. (a Delaware corporation)                                          04-3523408
                        2200 West Park Drive
                        Westborough, Massachusetts 01581
                        (508) 616-7800
</TABLE>

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

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

       NEON Communications, Inc.--Common Stock, Par Value $0.01 Per Share

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

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

    At May 1, 2001 there were 21,335,061 shares of NEON Communications, Inc.
common stock outstanding.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                               TABLE OF CONTENTS
                         PART I. FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                PAGE
                                                              --------
<S>                                                           <C>
NEON Communications, Inc. Condensed Consolidated Balance
  Sheets (Unaudited)........................................      2
NEON Communications, Inc. Condensed Consolidated Statements
  of Operations (Unaudited).................................      3
NEON Communications, Inc. Condensed Consolidated Statements
  of Cash Flows (Unaudited).................................      4
NEON Communications, Inc. Notes to Condensed Consolidated
  Financial Statements (Unaudited)..........................      5

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS.................     12

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
  MARKET RISK...............................................     23

                      PART II: OTHER INFORMATION

Item 6: Exhibits and Reports on Form 8-K....................     23
Signatures..................................................     24
</TABLE>

                                       1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                           NEON COMMUNICATIONS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                              DECEMBER 31,      MARCH 31,
                                                                  2000            2001
                                                              -------------   -------------
<S>                                                           <C>             <C>
                                          ASSETS

Current Assets:
  Cash and cash equivalents.................................  $  20,650,158   $  11,143,437
  Short-term restricted investments.........................     24,452,374      24,178,889
  Accounts receivable, net..................................      2,725,732       4,960,599
  Prepaid expenses and other current assets.................        413,764       6,303,823
                                                              -------------   -------------
    Total current assets....................................     48,242,028      46,586,748
                                                              -------------   -------------
Property and Equipment, net.................................    161,425,167     171,547,515
Restricted Investments......................................     10,851,258              --
Intangible and Other Assets, net............................     61,418,238      56,223,110
                                                              -------------   -------------
                                                              $ 281,936,691   $ 274,357,373
                                                              =============   =============

                           LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable..........................................  $  21,559,425   $  24,780,906
  Accounts payable--Communications network..................     11,874,368      13,098,835
  Accrued expenses..........................................     13,526,077       9,889,033
  Accrued right-of-way fees, related party..................        679,531         679,531
  Deferred revenue..........................................        735,105       1,085,459
                                                              -------------   -------------
    Total current liabilities...............................     48,374,506      49,533,764
                                                              -------------   -------------
Deferred revenue, net of current portion....................      3,989,670       8,336,411
Long-term accounts payable--Communications network, net of
  current portion...........................................     13,650,642      14,259,257
Long-term obligations.......................................    180,000,000     180,000,000
Contingencies (Note 7)
Stockholders' Equity:
  Unrestricted Common stock, $0.01 par value--
    Authorized--60,000,000 shares
    Issued and outstanding--18,753,870 and 18,754,649 shares
      at December 31, 2000 and March 31, 2001,
      respectively..........................................        187,539         187,546
  Restricted common stock (Note 2)..........................         25,804          25,804
  Subscription receivable (Note 2)..........................   (167,431,217)   (166,445,155)
  Additional paid-in capital................................    289,445,281     289,202,591
  Accumulated deficit.......................................    (86,305,534)   (100,742,845)
                                                              -------------   -------------
Total stockholders' equity..................................     35,921,873      22,227,941
                                                              -------------   -------------
                                                              $ 281,936,691   $ 274,357,373
                                                              =============   =============
</TABLE>

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED
                             FINANCIAL STATEMENTS.

                                       2
<PAGE>
                           NEON COMMUNICATIONS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                                                      MARCH 31,
                                                              --------------------------
                                                                 2000           2001
                                                              -----------   ------------
<S>                                                           <C>           <C>
Revenues:
  Network service...........................................  $ 1,663,192   $  4,637,134
  Other service.............................................      447,455        757,433
                                                              -----------   ------------
  Total revenues............................................    2,110,647      5,394,567
                                                              -----------   ------------
Expenses:
  Cost of revenues..........................................    2,084,765      4,058,365
  Selling, general and administrative.......................    2,508,615      7,047,875
  Depreciation and amortization.............................    2,458,941      4,094,273
                                                              -----------   ------------
  Total expenses............................................    7,052,321     15,200,513
                                                              -----------   ------------
  Loss from operations......................................   (4,941,674)    (9,805,946)
                                                              -----------   ------------
Other Income (Expense):
  Interest income...........................................    1,535,409        576,413
  Interest expense..........................................   (5,384,275)    (5,207,778)
                                                              -----------   ------------
  Total other expense, net..................................   (3,848,866)    (4,631,365)
                                                              -----------   ------------
Net Loss....................................................  $(8,790,540)  $(14,437,311)
                                                              ===========   ============
Basic and Diluted Loss per Share............................  $     (0.53)  $      (0.77)
                                                              ===========   ============
Basic and Diluted Weighted Average Shares Outstanding.......   16,476,116     18,754,414
                                                              ===========   ============
</TABLE>

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED
                             FINANCIAL STATEMENTS.

                                       3
<PAGE>
                           NEON COMMUNICATIONS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                                                       MARCH 31,
                                                              ---------------------------
                                                                  2000           2001
                                                              ------------   ------------
<S>                                                           <C>            <C>
Cash Flows from Operating Activities:
  Net loss..................................................  $ (8,790,540)  $(14,437,311)
  Adjustments to reconcile net loss to net cash used in
    operating activities--
    Amortization of deferred financing and interest costs...       325,071        349,191
    Depreciation and amortization...........................     2,458,941      4,094,273
    Changes in assets and liabilities--
      Accounts receivable...................................        40,902     (2,234,867)
      Prepaid expenses and other current assets.............      (158,746)    (5,890,059)
      Accounts payable......................................     5,320,376      3,221,481
      Accrued expenses......................................    (6,484,197)    (3,637,044)
      Deferred revenue......................................       517,881      4,697,095
                                                              ------------   ------------
        Net cash used in operating activities...............    (6,770,312)   (13,837,241)
                                                              ------------   ------------
Cash Flows from Investing Activities:
  Sales of short-term investments, net......................    14,770,787             --
  Purchases of property and equipment.......................   (13,555,938)   (13,817,643)
  (Decrease) increase in intangible and other assets........       (30,293)     4,446,959
                                                              ------------   ------------
        Net cash used in investing activities...............    (1,184,556)    (9,370,684)
                                                              ------------   ------------
Cash Flows from Financing Activities:
  (Decrease) increase in accounts payable--communications
    network.................................................    (6,340,234)     1,833,082
  Decrease in restricted cash and investments...............    10,837,574     11,124,743
  Proceeds from subscription receivable.....................            --        986,062
  Payment of common stock issuance costs....................            --       (250,000)
  Proceeds from exercise of common stock options............     2,985,077          7,317
                                                              ------------   ------------
        Net cash provided by financing activities...........     7,482,417     13,701,204
                                                              ------------   ------------
Net Increase (Decrease) in Cash and Cash Equivalents........     1,896,661     (9,506,721)
Cash and Cash Equivalents, beginning of period..............     4,768,389     20,650,158
                                                              ------------   ------------
Cash and Cash Equivalents, end of period....................  $  6,665,050   $ 11,143,437
                                                              ============   ============
Supplemental Disclosure of Cash Flow information:
  Cash paid during the period for--
    Interest................................................  $ 11,077,350   $ 10,050,000
                                                              ============   ============
    Taxes...................................................  $         --   $     70,265
                                                              ============   ============
</TABLE>

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED
                             FINANCIAL STATEMENTS.

                                       4
<PAGE>
                           NEON COMMUNICATIONS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 2001

(1) OPERATIONS

    NEON Communications, Inc. (the Company or NEON) and its subsidiaries are
engaged in the ownership, management, operation and installation of fiber optic
telecommunication networks in the Northeast and Mid-Atlantic regions of the
United States.

    To date, the Company has recorded revenues principally from contract and
other services and has incurred cumulative operating losses of approximately
$100,700,000. The market for fiber optic telecommunications in which the Company
operates is changing rapidly due to technological advancements, the introduction
of new products and services and the increasing demands placed on equipment in
worldwide telecommunications networks. The Company is dependent upon a single or
limited source of suppliers for a number of components and parts. Shortages
resulting from a change in arrangements with these suppliers and manufacturers
could cause significant delays in the expansion of the NEON systems and could
have a material adverse effect on the Company.

(2) REORGANIZATION AND SIGNIFICANT TRANSACTION

    On September 14, 2000, the Company closed agreements with Consolidated
Edison Communications, Inc. (CEC) and Exelon Capital Partners Corporation
(Exelon). Under the terms of these agreements, the Company will receive an
indefeasible right to use (IRU) in fiber optic facilities on the networks of CEC
and Exelon to provide network transport and carrier services in their service
areas, which include New York and Philadelphia, as well as beyond their service
areas to Baltimore and Washington, D.C. At the same time, both CEC and Exelon
will also provide connectivity from NEON's backbone system to their respective
local distribution facilities in CEC and Exelon service areas. This interstate
and intrastate communications network will operate under the NEON brand,
expanding NEON's network into and around New York and the Mid-Atlantic region.
The term of the IRU granted under the CEC agreement is for no less than
25 years and the term of the IRU granted under the Exelon agreement is for
20 years with five-year extension periods. As discussed below, the Company is
currently involved in negotiations regarding the restructuring of its agreement
with Exelon.

    As part of the agreements with CEC and Exelon, the Company has issued
2,476,735 shares of common stock to CEC and 2,131,143 shares of common stock to
Exelon, of which all but 44% of this stock was restricted as of March 31, 2001,
with such restrictions to lapse upon the completion of certain milestones over
the terms of the agreements, as detailed in the contracts with CEC and Exelon.
This transaction has resulted in CEC and Exelon owning approximately 10.5% and
9.1%, respectively, of NEON's fully diluted common stock. Pursuant to a
stockholders' agreement entered into among the Company, CEC, Exelon and a
subsidiary of Northeast Utilities, CEC and Exelon have each nominated a member
of the Company's Board of Directors.

    As of March 31, 2001, the Company has not yet received all of the assets to
be provided by CEC and Exelon under the agreements and, therefore, has recorded
a subscription receivable on the accompanying consolidated balance sheets for
the value of these assets. The Company has received an appraisal of the value of
the tangible and intangible assets received in consideration for the stock
provided under these agreements. The addition of these tangible and intangible
assets will result in significant depreciation and amortization expense and an
increase in the Company's net loss per share over the terms of the IRUs granted
under these agreements. In addition to the IRUs and intangible assets, CEC and
Exelon have also agreed to contribute to the Company cash totaling $11,300,000
and $8,050,000, respectively, over the period from September 14, 2000 to
April 15, 2005 for the build-out of

                                       5
<PAGE>
                           NEON COMMUNICATIONS, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                 MARCH 31, 2001

local points of presence (POP) and the related optronic equipment and for the
cost of POP rental, POP operating expenses, optronic equipment maintenance and
sales and marketing expenses.

    Immediately preceding the closing of the agreements with CEC and Exelon, the
Company completed its second reorganization, under the terms of which NEON
Communications, Inc. became the parent holding company of Northeast Optic
Network, Inc. At the same time, Northeast Optic Network, Inc. changed its name
to NEON Optica, Inc. The common stock of NEON Communications, Inc. is traded on
the Nasdaq National Market under the symbol "NOPT", with NEON Optica, Inc., the
operating entity, as a wholly owned subsidiary of NEON Communications, Inc. The
names were changed to reflect the fact that NEON is now doing business in both
the Northeast and the Mid-Atlantic regions.

    In March 2001, the Company signed term sheets with Exelon Enterprises
Management (Exelon Enterprises), the parent company of Exelon, and Northeast
Utilities ("NU"), pursuant to which Exelon Enterprises and NU would purchase
$13 million and $15 million, respectively, in subordinated convertible notes
from the Company (see Note 6). A provision in the Exelon Enterprises term sheet
provides for an additional $10 million from Exelon Enterprises, payable either
in cash or forgiveness of indebtedness represented by the notes on or before
April 2002 in lieu of providing the IRUs, services and other cash proceeds
required under the September 2000 agreements with Exelon. The Exelon Enterprises
term sheet also provides for the release of all restrictions on the common stock
issued to Exelon in September 2000. The transactions with Exelon Enterprises and
NU are each conditioned upon one or more holders of our common stock investing
at least $13 million and $15 million, respectively, in new equity or in
subordinated notes having substantially the same terms as the notes purchased by
NU and Exelon Enterprises, respectively. The closing of each of these
transactions simultaneously would satisfy this condition. Each of these
transactions is subject to other conditions, including the approval of our
stockholders of the issuance of the notes and the shares of common stock
issuable upon conversion of the notes, and the negotiation and execution of
mutually agreeable definitive agreements. The Company has evaluated the impact
of the transaction with Exelon Enterprises on its accounting for the agreements
with and related issuances of common stock to Exelon in September 2000 and
determined that it would result in a one-time, non-cash charge to the Company's
consolidated statement of operations of approximately $64 million and a
writedown of the subscription receivable. This charge would occur upon the
signing of definitive agreements with Exelon Enterprises. The Company is
currently discussing with Exelon Enterprises alternative means of financing
which would not require this non-cash charge. The Company expects to sign
definitive agreements associated with these or equivalent financing arrangements
during the second quarter of 2001.

(3) SIGNIFICANT ACCOUNTING POLICIES

    The accompanying consolidated financial statements reflect the application
of certain accounting policies as described below and elsewhere in these notes
to consolidated financial statements.

(A) PRINCIPLES OF CONSOLIDATION

    The accompanying consolidated financial statements include the results of
operations of NEON Communications, Inc., its wholly owned subsidiary, NEON
Optica, Inc. ("NEON Optica") and NEON Optica's wholly owned subsidiaries. All
significant intercompany transactions and balances have been eliminated in
consolidation.

                                       6
<PAGE>
                           NEON COMMUNICATIONS, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                 MARCH 31, 2001

(B) BASIS OF PRESENTATION

    The accompanying unaudited condensed consolidated financial statements have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission, and reflect all adjustments, consisting of
only normal recurring adjustments, which, in the opinion of management, are
necessary for a fair statement of the results of the interim periods presented.
These financial statements do not include disclosures associated with the annual
financial statements and, accordingly, should be read in conjunction with the
attached Management's Discussion and Analysis of Financial Condition and Results
of Operation and the financial statements and footnotes for the year ended
December 31, 2000 included in the Company's Form 10-K.

(C) MANAGEMENT ESTIMATES

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

(D) REVENUE RECOGNITION

    The services the Company provides include long-term leases of dark fiber
(fiber optic transmission lines leased without optronics equipment installed by
the Company) and shorter-term leases of lit fiber (fixed amounts of capacity on
fiber optic transmission lines that use optronics equipment installed by the
Company) at fixed-cost pricing over multi-year terms. Revenues on
telecommunications network services are recognized ratably over the term of the
applicable lease agreements with customers, which range from one to 20 years.
Amounts billed in advance of the service provided are recorded as deferred
revenue (see Note 3(e)). The Company also leases space at its facilities
(collocation services). Other service revenues includes these collocation
service revenues as well as revenues from nonrecurring installation charges and
design, engineering and construction services.

    In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 101, REVENUE RECOGNITION, which provides
guidance on applying generally accepted accounting principles to recognition of
revenues. The Company adopted SAB No. 101 in the fourth quarter of 2000. Under
the guidance of SAB No. 101, the Company recognizes revenues from nonrecurring
installation charges and design, engineering and construction services ratably
over the multi-year network services terms to which the nonrecurring charges
relate. Prior to the issuance of SAB No. 101, revenues for these nonrecurring
services were generally recognized as services were performed because the
Company had no further obligations. The Company adopted this new accounting
guidance as of January 1, 2000 and all periods presented have been restated to
reflect the effects of SAB No. 101.

    The Company has contracts with customers that provide service-level
commitments, which may obligate the Company to provide credits against billings
if service is interrupted or does not meet the customer's operating parameters.
These amounts are accounted for in cost of sales. To date, credits granted under
these arrangements have not been material.

                                       7
<PAGE>
                           NEON COMMUNICATIONS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 2001

(E) DEFERRED REVENUE

    Deferred revenue represents prepayments on dark fiber optic cable leases and
amounts related to nonrecurring fees to be recognized over the terms of the
customer fiber optic lease arrangements to which they relate in accordance with
SAB No. 101. Lease payments are structured as either prepayments or monthly
recurring charges. Prepayments are accounted for as deferred revenue and
recognized over the term of the respective customer fiber optic lease agreement.

(F) COMPREHENSIVE INCOME (LOSS)

    Statement of Financial Accounting Standards ("SFAS") No. 130, REPORTING
COMPREHENSIVE INCOME, requires disclosure of all components of comprehensive
income (loss) on an annual and interim basis. Comprehensive income (loss) is
defined as the change in equity of a business enterprise during a period from
transactions and other events and circumstances from nonowner sources.
Comprehensive net loss is the same as reported net loss for all periods
presented.

(G) LOSS PER SHARE

    In accordance with SFAS No. 128, EARNINGS PER SHARE, basic and diluted loss
per share were computed by dividing net loss by the weighted average number of
common shares outstanding during the first three months of 2000 and 2001.
Diluted net loss per share in the three months ended March 31, 2001 excludes
2,580,412 shares of restricted common stock and 2,230,316 shares issuable from
the assumed exercise of stock options, as their effect would be antidilutive.
Diluted net loss per share in the three months ended March 31, 2000 excludes
1,835,533 shares issuable from the assumed exercise of stock options, as their
effect would be antidilutive.

(H) RECLASSIFICATIONS

    Certain prior-period amounts have been reclassified to conform with the
current period presentation.

(I) NEW ACCOUNTING STANDARDS

    In March 2000, the FASB issued Interpretation No. 44, ACCOUNTING FOR CERTAIN
TRANSACTIONS INVOLVING STOCK COMPENSATION: AN INTERPRETATION OF ACCOUNTING
PRINCIPLES BOARD ("APB") OPINION NO. 25. The interpretation clarifies the
application of APB Opinion No. 25 in certain situations, as defined. The
interpretation is effective July 1, 2000, but covers certain events occurring
during the period after December 15, 1998, but before the effective date. The
impact of FASB Interpretation No. 44 was not material to the Company's financial
position, results of operations or cash flows.

(4) 12 3/4% SENIOR NOTES

    In August 1998, the Company sold $180,000,000 of 12 3/4% Senior Notes due
2008 to the public in the debt offering. The Senior Notes are due on August 15,
2008 and scheduled interest payments are due on February 15 and August 15 of
each year, commencing February 15, 2000. Upon closing of the sale of the Senior
Notes, the Company purchased approximately $72,000,000 in U.S. Government
obligations with an average maturity of 645 days to provide for payment in full
of the first seven scheduled interest payments on the Senior Notes. Such
securities are pledged as security for the benefit

                                       8
<PAGE>
                           NEON COMMUNICATIONS, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                 MARCH 31, 2001

of the holders of the Senior Notes, are classified as held-to-maturity and
reported at amortized cost and are included as restricted investments in the
accompanying consolidated balance sheets. The Senior Notes are redeemable in
whole or in part at the option of the Company at any time on or after
August 15, 2003 at the following redemption prices expressed as a percentage of
principal plus accrued interest through the date of redemption:

<TABLE>
<CAPTION>
                                                              REDEMPTION
PERIOD                                                          PRICE
------                                                        ----------
<S>                                                           <C>
2003........................................................   106.375%
2004........................................................   104.250
2005........................................................   102.125
Thereafter..................................................   100.000
</TABLE>

    In the event of a change in control, as defined, each holder of the notes
will be entitled to require the Company to purchase all or a portion of such
holder's Senior Notes at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of purchase. The
Senior Notes are unsecured obligations and rank PARI PASSU in right of payment
with all existing and future indebtedness of the Company that is not
subordinated by its terms in right of payment and priority to the Senior Notes
and is senior in right-of-payment to all future subordinated indebtedness of the
Company.

    In connection with this financing, the Company incurred approximately
$6,300,000 of issuance costs. These costs have been classified as deferred
financing costs in the accompanying consolidated balance sheet and are being
amortized, as additional interest expense, over the term of the Senior Notes.

(5) PREFERRED STOCK

    The Restated Certificate of Incorporation authorizes the issuance of up to
2,000,000 shares of preferred stock, $0.01 par value per share. Under the terms
of the Certificate of Incorporation, the Board of Directors is authorized,
subject to any limitations prescribed by law, without stockholder approval, to
issue such shares of preferred stock in one or more series. Each series of
preferred stock shall have rights, preferences, privileges and restrictions,
including voting rights, dividend rights, conversion rights, redemption
privileges and liquidation preferences, as shall be determined by the Board of
Directors. At March 31, 2001, no such shares are issued and outstanding.

(6) CONVERTIBLE NOTES

    In March 2001, the Company signed a term sheet to sell $13.0 million of
19.5% subordinated convertible notes ("19.5% Convertible Notes") to Exelon
Enterprises. The 19.5% coupon is subject to adjustment to 24% upon certain
events, as defined in the term sheet. The 19.5% Convertible Notes will mature on
August 15, 2008, and scheduled interest payments will be due semi-annually
commencing August 15, 2001. Exelon Enterprises will have the option to receive
the interest in cash or common stock at a price per share of $5.00. The 19.5%
Convertible Notes and accrued interest are convertible at any time into common
stock, at Exelon Enterprises', option at a price of $5.00 per common share. A
provision in the term sheet provides for an additional $10.0 million from Exelon
Enterprises payable in either cash or forgiveness of the indebtedness
represented by the notes on or before April 15, 2002 in lieu of providing the
IRUs, services and other cash proceeds required under its September 2000

                                       9
<PAGE>
                           NEON COMMUNICATIONS, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                 MARCH 31, 2001

agreements with the Company. The term sheet also provides for the release of all
restrictions on the common stock issued to Exelon in September 2000.

    In March 2001, the Company also signed a term sheet to sell $15.0 million of
18% subordinated convertible notes ("18% Convertible Notes"), to NU. The 18%
Convertible Notes will mature on August 15, 2008, and scheduled interest
payments will be due semi-annually commencing August 15, 2001. The Company has
the option to pay the interest in cash, common stock at a price per share of
$6.00 or an additional convertible note. The 18% Convertible Notes and accrued
interest are convertible at any time into common stock at NU' option at a price
of $6.00 per common share.

    The Company expects to sign definitive agreements associated with these or
equivalent financing arrangements during the second quarter of 2001.

(7) CONTINGENCIES

    Certain claims arising in the ordinary course of business are pending
against the Company. In the opinion of management, these claims are not expected
to have a material effect on operations.

(8) CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

    SFAS No. 105, DISCLOSURE OF INFORMATION ABOUT FINANCIAL INSTRUMENTS WITH OFF
BALANCE SHEET RISK AND FINANCIAL INSTRUMENTS WITH CONCENTRATION OF CREDIT RISK,
requires disclosure of any significant off-balance sheet and credit risk
concentration. Financial instruments that potentially expose the Company to
concentrations of credit risk consist primarily of cash and cash equivalents,
short-term investments and accounts receivable. The Company has not experienced
significant losses related to receivables from any individual or groups of
customers or any specific industry or geographic region. Due to these factors,
no additional credit risk is believed by management to be inherent in the
Company's accounts receivable. For the three months ended March 31, 2000 and
2001, four customers and one customer, respectively, represented 48% and 13% of
revenues, respectively. At December 31, 2000 and March 31, 2001, one customer
represented 21% and 33% of accounts receivable, respectively.

(9) SEGMENT DISCLOSURE

    SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED
INFORMATION, requires certain financial and supplementary information to be
disclosed on an annual and interim basis for each reportable operating segment
of an enterprise. Operating segments are defined as components of an enterprise
about which separate financial information is available that is evaluated
regularly by the chief operating decision maker, or decision making group, in
deciding how to allocate resources and in assessing performance. The Company's
chief operating decision maker is the Chief Executive Officer of the Company.

    The Company analyzes segment reporting based on dark fiber, lit fiber,
collocation and other services. Dark fiber, lit fiber, collocation and other
services are reported as revenue only. The Company does not allocate for
management reporting or segment reporting purposes its cost of revenues and
property and equipment, which represent the primarily operating costs,
communications network and equipment that support each segment. Similarly,
selling, general and administrative expenses are not allocated to the segments
for management or segment reporting purposes.

    Management utilizes several measurements to evaluate its operations and
allocate resources. However, the principal measurements are consistent with the
Company's financial statements. The

                                       10
<PAGE>
                           NEON COMMUNICATIONS, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                 MARCH 31, 2001

accounting policies of the segments are the same as those described in Note 3.
All of the Company's revenues and assets are located in the United States.

    Revenue information for the Company's segments is as follows:

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED
                                                              MARCH 31,
                                                       -----------------------
                                                          2000         2001
                                                       ----------   ----------
<S>                                                    <C>          <C>
Revenues:
  Dark fiber leases..................................  $  663,304   $1,110,734
  Lit fiber leases...................................     999,888    3,526,400
  Collocation services...............................     273,768      418,338
  Other services(1)..................................     173,687      339,095
                                                       ----------   ----------
    Total revenues...................................  $2,110,647   $5,394,567
                                                       ==========   ==========
</TABLE>

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

(1) Includes installation and design, engineering and construction services

                                       11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS

CAUTIONARY STATEMENT

    This Quarterly Report on Form 10-Q includes forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. All statements, other than statements of
historical facts, included or incorporated in this prospectus regarding our
strategy, future operations, financial position, future revenues, projected
costs, prospects, plans and objectives of management are forward-looking
statements. The words "anticipates," "believes," "estimates," "expects,"
"intends," "may," "plans," "projects," "will," "would" and similar expressions
are intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. In particular, but
without limiting the foregoing, our statements about, relating to or dependent
on our agreements with Consolidated Edison Communications and Exelon Capital
Partners Corporation and the extent of our network under each of those
agreements, as well as statements about, relating to or dependent upon the
transactions contemplated by our term sheets with Exelon Enterprises and NU,
constitute forward-looking statements. We cannot guarantee that we actually will
achieve the plans, intentions or expectations disclosed in our forward-looking
statements, and you should not place undue reliance on our forward-looking
statements. Actual results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking statements we make.
We have included important factors in the cautionary statements included in this
report, particularly under the heading "Risk Factors," that we believe could
cause actual results or events to differ materially from the forward-looking
statements that we make. Our forward-looking statements do not reflect the
potential impact of any future acquisitions, mergers, dispositions, joint
ventures or investments we may make. We do not assume any obligation to update
any forward-looking statements.

    References in this document to "we," "us," "our" and "the Company" refer,
to, NEON Communications, Inc. ("NEON Communications"), its subsidiary, NEON
Optica, Inc. ("NEON Optica", formerly NorthEast Optic Network, Inc.), and NEON
Optica's subsidiaries.

OVERVIEW

    We are a holding company whose principal asset is all of the outstanding
shares of the capital stock of NEON Optica. NEON Optica, is the wholly owned
subsidiary of NEON Communications and acts as the primary operating entity,
generating revenue primarily through the leasing of capacity on our network. In
addition, under our agreements with Consolidated Edison Communications, Inc.
("CEC") and Exelon Capital Partners Corporation ("Exelon"), which were
consummated on September 14, 2000, NEON Communications will be the holder of
indefeasible rights of use in certain fiber optic filaments in the Northeast and
Mid-Atlantic regions, as well as certain interconnections and telecommunications
facilities in New York City and Philadelphia, Pennsylvania, in each case upon
delivery of such assets by Consolidated Edison Communications, Inc. and Exelon
Capital Partners Corporation pursuant to the terms of their respective
agreements. As described in Note 6 to the financial statements of NEON
Communications included in the Quarterly Report, we are currently negotiating
with Exelon Enterprises concerning the restructuring of our agreement with
Exelon.

    The services the Company provides include long-term leases of dark fiber
(fiber optic transmission lines leased without optronics equipment installed by
the Company) and shorter-term leases of lit fiber (fixed amounts of capacity on
fiber optic transmission lines that use optronics equipment) at fixed-cost
pricing over multi-year terms. NEON Optica also leases space at our facilities
(collocation services). Other service revenue includes installation and design,
engineering and construction services. NEON Optica generally receives fixed
monthly payments from its customers for the leasing of capacity on its network
and recognizes revenues ratably over the term of the applicable customer
agreement.

                                       12
<PAGE>
    The Company owns and operates a technologically advanced, high-bandwidth
fiber optic network providing capacity on a wholesale basis to
telecommunications service providers, including local, long distance and
wireless telephone companies and Internet service providers. Our network
currently extends from Portland, Maine to New York City, and, under our
agreements with Exelon Capital Partners Corporation and Consolidated Edison
Communications, Inc., which were consummated on September 14, 2000, we are
working to extend our network to Philadelphia, Baltimore, and Washington D.C.
and expand our network in and around New York City. Our customers can connect
directly to our network at multiple locations in the larger cities we serve and
also in smaller communities along our network's routes. As described in Note 6
to the financial statements of NEON Communications included in the Quarterly
Report, we are currently negotiating with Exelon Enterprises concerning the
restructuring of our agreement with Exelon.

    To date we have experienced net losses and negative cash flow from operating
activities. From our inception to present, our principal activities included
building our network, developing our business plans, hiring management and other
key personnel and negotiating and executing customer contracts. We expect to
continue to generate net losses and negative cash flow as we expand our
operations. Whether or when we will generate positive cash flow from operating
activities will depend on a number of financial, competitive, regulatory,
technical, and other factors. See "Liquidity and Capital Resources".

    Our network service revenues include long-term leases of dark fiber and
short-term leases of lit fiber at fixed-cost pricing over multi-year terms.
Other service revenues include collocation services at our facilities as well as
installation and design, engineering, and construction services. We generally
receive fixed monthly payments from our customers for the leasing of capacity on
our network and the use of collocation facilities and recognize revenues ratably
over the term of the applicable customer agreement. Installation and design,
engineering, and construction service fees are non-refundable and generally
recognized as revenue ratably over the term of the related network services
arrangement (generally ranging from one to twenty years).

    Our costs consist primarily of cost of revenues, selling, general and
administrative expenses, depreciation and amortization, and interest expense.
Cost of revenues relates to lease payments for fiber optic facilities,
operations and maintenance costs, right of way fees and property taxes. Selling,
general and administrative expenses relate to expenses in connection with sales,
marketing and operations infrastructure, including personnel, advertising costs
and promotional activities and management and information technology.
Depreciation and amortization expense is associated with the build-out of our
network, as well as goodwill from our reorganization on July 8, 1998. Interest
expense relates to interest on our $180 million 12 3/4% Senior Notes Due 2008 as
described in Note 4 to the financial statements included in this Quarterly
Report.

RESULTS OF OPERATIONS

    Revenues increased by $3,283,920, or 156%, to $5,394,567 in the quarter
ended March 31, 2001, compared to $2,110,647 in the quarter ended March 31,
2000. Revenues in the first quarter of 2001 were generated by network services
of $4,637,134 and other services of $757,433, which consists of collocation
revenues and revenues related to installation and design, engineering, and
construction. The primary reason for the increase was the growth in demand for
our lit services, revenues from which increased by $2,526,512, or 253%, to
$3,526,400 in the quarter ended March 31, 2001, compared to $999,888 in the
quarter ended March 31, 2000. Lit services represented 60% and 76%,
respectively, of network service revenues during the quarters ended March 31,
2000 and 2001. Collocation revenues grew by 53% to $418,338 in the quarter ended
March 31, 2001, compared to $273,768 in the quarter ended March 31, 2000.

                                       13
<PAGE>
    In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 101, REVENUE RECOGNITION, which provides
guidance on applying generally accepted accounting principles to recognition of
revenues. We adopted SAB No. 101 in the fourth quarter of 2000. Under the
guidance of SAB No. 101, we recognize revenues from nonrecurring installation
charges and design, engineering and construction services ratably over the
multi-year network services terms to which the nonrecurring charges ultimately
relate. Prior to the issuance of SAB No. 101, revenues for these nonrecurring
services were generally recognized as services were performed because the
Company had no further obligations. We adopted this new accounting guidance as
of January 1, 2000 and all periods presented in the condensed consolidated
financial statements have been restated to reflect the effects of SAB No. 101.

    Total cost of revenues for the quarter ended March 31, 2001 was $4,058,365,
an increase of 95% as compared to the $2,084,765 in the quarter ended March 31,
2000. This increase was primarily due to additional fiber optic facilities
leases and increased network surveillance cost, operations and maintenance costs
and property taxes resulting from network expansion in our service territory in
the Northeast and the Mid-Atlantic regions.

    Selling, general and administrative expenses increased 181% to $7,047,875
for the quarter ended March 31, 2001, compared to $2,508,615 in the quarter
ended March 31, 2000, reflecting increased investment in our sales and marketing
and operations infrastructure, including personnel, advertising costs and
promotional activities, as well as an increase in management and information
technology. Our headcount increased by 178% from March 31, 2000 to March 31,
2001, from 66 employees as of March 31, 2000 to 184 employees as of March 31,
2001.

    Depreciation and amortization expense increased 67% to $4,094,273 for the
quarter ended March 31, 2001, compared to $2,458,941 for the quarter ended
March 31, 2000. This increase resulted from increased capital expenditures
related to the expansion of our communications network in our Northeast and
Mid-Atlantic service areas and completion of additional network points of
presence.

    Interest income decreased 62% to $576,413 for the quarter ended March 31,
2001, compared to $1,535,409 for the quarter ended March 31, 2000. This decrease
was due primarily to lower cash and investment balances in the first quarter of
2001 compared to the first quarter of 2000.

    Interest expense decreased by three percent from $5,384,275 in the quarter
ended March 31, 2000 to $5,207,778 in the quarter ended March 31, 2001 due to
the capitalization of interest on network expansion projects, which increased
from the first quarter of 2000 to the first quarter of 2001. Interest expense
primarily relates to our 12 3/4% Senior Notes Due 2008.

    For the quarter ended March 31, 2001, we recorded a net loss of $14,437,311
compared to $8,790,540 for the quarter ended March 31, 2000. The increase in net
loss is primarily attributable to the factors discussed above.

LIQUIDITY AND CAPITAL RESOURCES

    Our operations have required substantial capital investment for the design,
construction and development of our network and the purchase of
telecommunications equipment. Capital expenditures during the three months ended
March 31, 2000 and 2001 totaled approximately $13.6 million and $13.8 million,
respectively. We expect to continue to have substantial capital requirements in
connection with (i) the expansion and improvement of our existing network,
(ii) the design, construction and development of new networks, (iii) the
connection of additional buildings and customers to our network, (iv) the
purchase of additional telecommunication equipment, (v) the purchase and
development of our operating support systems, and (vi) additional expenses
required to operate and maintain existing facilities.

                                       14
<PAGE>
    We have funded a substantial portion of these expenditures through our
public offerings completed on August 5, 1998, which resulted in net proceeds to
us of approximately $218 million (after deducting expenses and before deducting
$72.0 million in escrowed funds to cover the first seven semi-annual interest
payments on our 12 3/4% Senior Notes due 2008).

    The substantial capital investment required to build our network has
resulted in negative cash flow after investing activities over the last three
years. This negative cash flow after investing activities is a result of the
requirement to build a substantial portion of our network before we can connect
revenue-generating customers. We expect to continue to experience negative cash
flow after investing activities for the current year due to the continuous
expansion and development of our network. Unless we seek and are able to obtain
additional capital, our ability to continue this expansion will be limited by
our current capital resources until sufficient cash flow after investing
activities is generated.

    Net cash used in operating activities was $6,770,312 and $13,837,241 for the
quarters ended March 31, 2000 and 2001, respectively. Net cash used in
operations for the quarter ended March 31, 2001 was due primarily to additional
fiber optic facilities leases and other costs of revenues resulting from network
expansion in our service territory, which expanded from the Northeast into the
Mid-Atlantic region during 2000, as well as increased investment in our sales
and marketing infrastructure, including personnel, advertising costs and
promotional activities and an increase in administrative support.

    Cash used in investing activities totaled $1,184,556 and $9,370,684 in the
quarters ended March 31, 2000 and 2001, respectively. This decrease has been due
to the uses of cash described above. Our uses of cash have consisted primarily
of payment of the cost of construction and deployment of telecommunications
equipment to build our communications network.

    Cash flow from financing activities was $7,482,417 and $13,701,204 in the
quarters ended March 31, 2000 and 2001, respectively. Cash flow from financing
activities in the first quarter of 2001 was generated from the release of the
restricted cash placed in escrow in connection with the initial public offering
of our 12 3/4% Senior Notes Due 2008 and cash received under our agreements with
CEC and Exelon. Cash flow from financing activities in the first quarter of 2000
was generated from the release of restricted cash placed in escrow in connection
with the initial public offering of our 12 3/4% Senior Notes Due 2008 and
proceeds from the issuance of common stock upon the exercise of stock options.
All proceeds from the release of the restricted cash were used to pay our
interest payments due under our 12 3/4% Senior Notes Due 2008.

    We anticipate that we will continue to experience negative cash flow as we
expand our network, construct networks, deploy telecommunications electronic
equipment and market our services to an expanding customer base. Cash provided
by operations will not be sufficient to fund the expansion and development of
our system in the Northeast and Mid-Atlantic regions. As a result, we intend to
use our cash on hand and the remaining net proceeds of our 1998 public
offerings, and will have to raise additional financing through some combination
of commercial bank borrowings, leasing, vendor financing, strategic alliances
and sale of equity or debt securities if we are to complete our expansion as
currently planned. As of March 31, 2001, we had approximately $11,100,000 in
unrestricted cash on hand, compared to approximately $20,660,000 in unrestricted
cash on hand as of December 31, 2000.

    We have recently signed term sheets with Northeast Utilities ("NU") and
Exelon Enterprises Management ("Exelon Enterprises"), pursuant to which NU and
Exelon Enterprises would purchase $15 million and $13 million, respectively, in
subordinated convertible notes from us, bearing interest at a rate of at least
18% and due 2008.

    The transactions with Exelon Enterprises and NU are each conditioned upon
one or more holders of our common stock investing at least $13 million and
$15 million, respectively, in new equity or in subordinated notes having
substantially the same terms as the notes purchased by NU and Exelon
Enterprises, respectively. The closing of each of these transactions
simultaneously would satisfy this

                                       15
<PAGE>
condition. The transaction with Exelon Enterprises provides for an additional
$10 million from Exelon Enterprises payable either in cash or forgiveness of the
indebtedness represented by the notes on or before April 2002 in lieu of
providing the IRUs, services and other cash proceeds required under our
agreements with Exelon signed in September 2000, as well as the release of all
restrictions on the common stock issued to Exelon in September 2000. Each of
these transactions is subject to other conditions, including the approval of our
stockholders of the issuance of the notes and the shares of common stock
issuable upon conversion of the notes, and the negotiation and execution of
mutually agreeable definitive agreements. We have evaluated the impact of the
transaction with Exelon Enterprises on our accounting for the agreements with
and related issuances of common stock to Exelon in September 2000 and determined
that it would result in a one-time, non-cash charge to our consolidated
statement of operations of approximately $64 million and a writedown of the
subscription receivable. This charge would occur upon the signing of definitive
agreements with Exelon Enterprises. We are currently discussing with Exelon
Enterprises alternative means of financing which would not require this non-cash
charge.

    Separately, one of our major suppliers has informed us that they will not
continue to sell equipment to us on normal credit terms. We are currently
negotiating with this supplier to obtain a deferral of amounts already owed to
them. If we are unable to obtain this deferral, we will pay the amounts owed to
this supplier with the funds described above.

    On April 12, 2001, we filed a registration statement with the Securities and
Exchange Commission relating to the possible offering from time to time of up to
$25,000,000 of our common stock, preferred stock, debt securities or warrants to
purchase any of the foregoing. This registration statement has not yet been
declared effective by the Securities and Exchange Commission, and we have not
yet entered into any agreements relating to the issuance of any securities
pursuant to this registration statement.

    Upon the close of the transactions with NU and Exelon Enterprises, after
giving effect to a reduction in capital expenditures, we will have funds
sufficient to finance our operations into the second quarter of 2002. However,
we cannot assure you that the transactions with NU and Exelon Enterprises will,
in fact, be consummated. If we fail to close these transactions and are unable
to obtain alternative financing, we will be forced to suspend capital
expenditures, downsize our operations and delay our network expansion and
customer growth plans. As a result, our rate of revenue growth could cease or
slow materially and the fulfillment of our business plan and the date when we
might achieve profitability may be substantially delayed.

    Management expects to sign definitive agreements associated with these or
equivalent financing arrangements during the second quarter of 2001.

    Our capital requirements may vary based upon the timing and the success of
implementation of our business plan and as a result of regulatory, technological
and competitive developments or if demand for our services or cash flow from
operations is less than or more than expected, our plans or projections change
or prove to be inaccurate, we make acquisitions, or we accelerate deployment of
our network or otherwise alter the schedule or targets for the implementation of
our business plan. The expectations of required future capital expenditures are
based on our current estimates.

NEW ACCOUNTING STANDARDS

    In March 2000, the FASB issued Interpretation No. 44, ACCOUNTING FOR CERTAIN
TRANSACTIONS INVOLVING STOCK COMPENSATION: AN INTERPRETATION OF ACCOUNTING
PRINCIPLES BOARD ("APB") OPINION NO. 25. The interpretation clarifies the
application of APB Opinion No. 25 in certain situations, as defined. The
interpretation is effective July 1, 2000, but covers certain events occurring
during the period after December 15, 1998, but before the effective date. The
impact of FASB Interpretation No. 44 was not material to the Company's financial
position, results of operations or cash flows.

                                       16
<PAGE>
RISK FACTORS

    There are a number of important factors that could affect our business and
future operating results, including, without limitation, the factors set forth
below, and the information contained in this Quarterly Report on Form 10-Q
should be read in light of such factors. Any of the following factors could have
a material adverse effect on our business and our future operating results.

RISK RELATING TO OUR FINANCIAL SITUATION

    WE HAVE EXPERIENCED SIGNIFICANT NET LOSSES THROUGHOUT OUR HISTORY, AND ARE
CURRENTLY EXPERIENCING CASH FLOW PROBLEMS. AS A RESULT, WE WILL NEED ADDITIONAL
FINANCING IN ORDER TO FUND OUR OPERATIONS AND CARRY OUT OUR BUSINESS PLAN, AND
IF WE ARE UNABLE TO OBTAIN THIS FINANCING, OUR BUSINESS WILL BE SEVERELY HARMED
AND WE MAY BE REQUIRED TO SEEK PROTECTION FROM OUR CREDITORS UNDER THE FEDERAL
BANKRUPTCY LAWS.

    We have incurred cumulative net losses since our inception of approximately
$100.7 million. As of March 31, 2001, we had approximately $11,100,000 in
unrestricted cash on hand. We have recently signed term sheets with NU and
Exelon Enterprises, pursuant to which NU and Exelon Enterprises would purchase
$15 million and $13 million, respectively, in subordinated convertible notes
from us, bearing interest at a rate of at least 18% and due 2008.

    The transactions with Exelon Enterprises and NU are each conditioned upon
one or more holders of our common stock investing at least $13 million and
$15 million, respectively, in new equity or in subordinated notes having
substantially the same terms as the notes purchased by NU and Exelon
Enterprises, respectively. The closing of each of these transactions
simultaneously would satisfy this condition. The transaction with Exelon
Enterprises provides for an additional $10 million from Exelon Enterprises
payable either in cash or forgiveness of debt on or before April 2002 in lieu of
providing the IRUs, services and other cash proceeds required under our
agreements with Exelon signed in September 2000, as well as the release of all
restrictions on the common stock issued to Exelon in September 2000. Each of
these transactions is subject to other conditions, including the approval of our
stockholders of the issuance of the notes and the shares of common stock
issuable upon conversion of the notes, and the negotiation and execution of
mutually agreeable definitive agreements.

    Separately, one of our major suppliers has informed us that they will not
continue to sell equipment to us on normal credit terms. We are currently
negotiating with this supplier to obtain a deferral of amounts already owed to
them. If we are unable to obtain this deferral, we will pay the amounts owed to
this supplier with the funds described above.

    Upon the close of the transactions with NU and Exelon Enterprises, after
giving effect to a reduction in capital expenditures, we will have funds
sufficient to finance our operations into the second quarter of 2002. However,
we cannot assure you that the transactions with NU and Exelon Enterprises will,
in fact, be consummated. If we fail to close these transactions and are unable
to obtain alternative financing, we will be forced to suspend capital
expenditures, downsize our operations and delay our network expansion and
customer growth plans. As a result, our rate of revenue growth could cease or
slow materially and the fulfillment of our business plan and the date when we
might achieve profitability may be substantially delayed.

RISKS RELATING TO OUR BUSINESS STRATEGY

    OUR BUSINESS STRATEGY DEPENDS UPON ANTICIPATED CUSTOMER DEMAND FOR OUR
SERVICES, AND OUR FAILURE TO OBTAIN CUSTOMERS FOR OUR SERVICES AT PROFITABLE
RATES WOULD ADVERSELY AFFECT OUR BUSINESS RESULTS.

    Our ability to become profitable depends upon our ability to secure a market
for our services and obtain service contracts with our communications customers.
Many of our targeted customers may also be our potential competitors. If our
services are not satisfactory or cost competitive, our targeted customers may
utilize other providers where available, or construct their own networks, which
would reduce their need for our services and create future sources of
competition for us. If we are unable to

                                       17
<PAGE>
close our proposed financing transactions with NU and Exelon Enterprises and are
unable to obtain alternative financing, we will be forced to reduce our capital
spending and will be unable to invest in expansion of our current network, which
may impair our ability to attract new customers who require service or capacity
we do not currently have.

    INTENSE COMPETITION IN THE TELECOMMUNICATIONS INDUSTRY FROM A BROAD RANGE OF
COMPETITORS MAY PREVENT US FROM OBTAINING CUSTOMERS AND REQUIRE US TO LOWER
PRICES.

    The telecommunications industry is highly competitive. We face substantial
competition from companies with significantly greater financial and other
resources whose capacity is interchangeable with the capacity we offer,
including incumbent local telephone companies, competitive local telephone
companies and major long distance companies. In addition, potential competitors
capable of offering services similar to those offered by us include other
communications service providers that own and operate their own networks and
equipment, including cable television companies, electric utilities, microwave
carriers, satellite carriers, wireless communication system operators and
end-users with private communications networks. Four of our principal
stockholders, NU, New England Business Trust (an affiliate of Energy East
Corporation), Consolidated Edison Communications, Inc., and Exelon Capital
Partners Corporation each own or have rights, through one or more affiliates, to
fibers in the cable that includes a portion of our network, which permits each
of them to compete directly with us in the future if they use these fibers for
purposes other than their corporate requirements. Our rights-of-way are
non-exclusive so that other service providers (including the utilities
themselves) could install competing networks using the same rights-of-way.

    BECAUSE WE OFFER A RELATIVELY NARROW RANGE OF SERVICES IN COMPARISON TO SOME
OF OUR COMPETITORS, WE CANNOT ACHIEVE REVENUES COMPARABLE TO COMPANIES OFFERING
A BROADER ARRAY OF SERVICES AND MAY BE AT A COMPETITIVE DISADVANTAGE WITH
RESPECT TO THE SERVICES WE OFFER.

    Unlike more diversified telecommunications companies, we derive and expect
to continue to derive substantially all of our revenues from the leasing of
fiber optic capacity on a wholesale basis to our customers, most of whom are
telecommunications companies and Internet service providers serving end-users.
The limited nature of our current services could limit our potential revenues
and result in our having lower revenues than competitors which provide a wider
array of services.

    DUE TO RAPIDLY EVOLVING TECHNOLOGIES IN OUR INDUSTRY AND THE UNCERTAINTY OF
FUTURE GOVERNMENT REGULATION, OUR CURRENT BUSINESS PLAN MAY BECOME OBSOLETE AND
WE MAY BE UNABLE TO MAINTAIN A COMPETITIVE POSITION IF WE ARE UNABLE TO
SUCCESSFULLY ADJUST OUR PRODUCTS, SERVICES AND BUSINESS STRATEGIES AS REQUIRED.

    In the future, we may become subject to more intense competition due to the
development of new technologies, an increased supply of domestic and
international transmission capacity, the consolidation in the industry among
local and long distance service providers and the effects of deregulation
resulting from the Telecommunications Act of 1996. The introduction of new
services and products or the emergence of new technologies may change the cost
or increase the supply of services and products similar to those which we
provide. We cannot predict which of many possible future product and service
offerings will be crucial to maintain our competitive position or what
expenditures will be required to develop profitably and provide such products
and services. Prices for our services to carriers specifically, and interstate
services in general, may decline over the next several years due primarily to
price competition to the extent that network providers continue to install
networks that compete with our network. We also believe that there will be
technological advances that will permit substantial increases in the
transmission capacity of both new and existing fiber.

    A LIMITED NUMBER OF CUSTOMERS HAS ACCOUNTED FOR A SIGNIFICANT PERCENTAGE OF
OUR REVENUES.

    Historically, a limited number of customers has accounted for a significant
percentage of our revenues. In 1999, three customers accounted for 18%, 16% and
13% of revenues, respectively. In 2000, two customers accounted for 16% and 10%
of revenues, respectively. We anticipate that our

                                       18
<PAGE>
results of operations in any given period will continue to depend to a
significant extent upon revenues of a small number of customers.

RISKS RELATING TO THE EXPANSION AND OPERATION OF OUR FIBER OPTIC NETWORK

    THE SUCCESSFUL, TIMELY AND COST-EFFECTIVE EXPANSION OF OUR FIBER OPTIC
NETWORK WITHIN THE NORTHEAST AND INTO THE MID-ATLANTIC REGION IS CRUCIAL TO OUR
BUSINESS PLAN, AND DEPENDS UPON NUMEROUS FACTORS BEYOND OUR CONTROL.

    Our ability to achieve our strategic objectives depends in large part upon
the successful, timely and cost-effective expansion of our fiber optic network
within the Northeast and into the Mid-Atlantic region. In addition to the
financial constraints under which we will be operating if we are unable to close
our proposed financing transactions with NU and Exelon or obtain alternative
financing, among the major factors that could affect our success are:

    - any delay or difficulty experienced by Consolidated Edison Communications
      or Exelon Capital Partners Corporation in the performance of their
      obligations under our agreements with them; and

    - the failure of both affiliated and third-party suppliers or contractors to
      meet their obligations to construct and maintain significant portions of
      our fiber optic network in a timely and cost-effective manner.

    Either of these factors, or other factors, over which we have little
control, could significantly hinder our ability to complete our network and
execute our business plan. Both Consolidated Edison Communications and Exelon
Capital Partners have failed to deliver certain network assets in a timely
fashion under our original agreements with them. In addition, we are currently
negotiating with Exelon Enterprises, the parent of Exelon Capital Partners,
regarding the restructuring of our system agreement with Exelon Capital Partners
which may result in the release of Exelon Capital Partners from its obligations
to deliver certain network assets under that agreement.

    IF WE ARE UNABLE TO CLOSE OUR PROPOSED FINANCING TRANSACTIONS WITH NU AND
EXELON ENTERPRISES, THE EXPENDITURES NECESSARY TO SUFFICIENTLY EXPAND OUR FIBER
OPTIC NETWORK AND DEVELOP OUR SERVICES IN ORDER TO SATISFY THE CURRENT AND
FORECASTED DEMANDS OF OUR CUSTOMERS WILL SURPASS OUR AVAILABLE CASH, AND WE MAY
BE UNABLE TO OBTAIN ADDITIONAL CAPITAL TO DEVELOP OUR SERVICES ON A TIMELY BASIS
AND ON ACCEPTABLE TERMS.

    Although we have expended significant resources in building our network and
the development of our customer base, we will require significant additional
cash in order to expand our geographic coverage and the range of services which
we can offer throughout our service area in order to be competitive in our
market. If we are unable to close our proposed financing transactions with NU
and Exelon Enterprises or obtain other sufficient financing to resume our
planned expansion and related capital expenditures, these expenditures for
expansion and for more services, together with associated operating expenses,
will reduce our cash flow and profitability until we establish an adequate
customer base throughout all of our coverage areas. To date, we have expended
substantial amounts on construction of our network from the proceeds of our
financing activities and, accordingly, we have generated negative cash flow. If
we are unable to close our proposed financing transactions with NU and Exelon
Enterprises, we will need to obtain additional capital to carry out our planned
expansion of our services, to increase our service territory, and to fund our
operations, and we cannot assure you that additional financing will be available
to us or, if available, that we can obtain it on a timely basis and on
acceptable terms.

    WE OBTAIN SOME OF THE KEY COMPONENTS USED IN OUR FIBER OPTIC NETWORK FROM A
SINGLE SOURCE OR A LIMITED GROUP OF SUPPLIERS, AND THE PARTIAL OR COMPLETE LOSS
OF ONE OF THESE SUPPLIERS COULD DISRUPT OUR OPERATIONS AND RESULT IN A
SUBSTANTIAL LOSS OF REVENUES.

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<PAGE>
    We depend upon a small group of suppliers for some of the key components and
parts used in our network. In particular, we purchase cable from Lucent-Fitel
and from Corning, and we purchase fiber optic equipment from Nortel Networks,
Cisco Systems and Sycamore Networks. Any delay or extended interruption in the
supply of any of the key components, changes in the pricing arrangements with
our suppliers and manufacturers or delay in transitioning a replacement
supplier's product into our network could disrupt our operations. One of our
suppliers has placed a credit hold on us, making it more difficult to obtain
equipment from that supplier and, if we are unable to close our proposed
financing transactions with NU and Exelon Enterprises or obtain alternative
financing, other suppliers may do the same.

    OUR FIBER OPTIC NETWORK, WHICH IS OUR SOLE SOURCE OF REVENUE, IS VULNERABLE
TO PHYSICAL DAMAGE, CATASTROPHIC OUTAGES, POWER LOSS AND OTHER DISRUPTIONS
BEYOND OUR CONTROL, AND THE OCCURRENCE OF ANY OF THESE FAILURES COULD RESULT IN
IMMEDIATE LOSS OF REVENUES, PAYMENT OF OUTAGE CREDITS TO OUR CUSTOMERS AND, MORE
IMPORTANTLY, THE LOSS OF OUR CUSTOMERS' CONFIDENCE AND OUR BUSINESS REPUTATION.

    Our success in marketing our services to our customers requires that we
provide high reliability, high bandwidth and a secure network. Our network and
the infrastructure upon which it depends are subject to physical damage, power
loss, capacity limitations, software defects, breaches of security and other
disruptions beyond our control that may cause interruptions in service or
reduced capacity for customers. Our agreements with our customers typically
provide for the payment of outage related credits (a predetermined reduction or
offset against our lease rate when a customer's leased facility is
non-operational or otherwise does not meet certain operating parameters) or
damages in the event of a disruption in service. These credits or damages could
be substantial and could significantly decrease our net revenues. Significant or
lengthy outages would also undermine our customers' confidence in our fiber
optic network and injure our business reputation.

RISKS RELATING TO OUR RIGHTS-OF-WAY

    WE COULD LOSE THE CONTRACT RIGHTS UPON WHICH WE RELY TO OPERATE AND MAINTAIN
OUR NETWORK IN THE EVENT OF BANKRUPTCY PROCEEDINGS RELATING TO ONE OR MORE OF
THE THIRD PARTIES THAT HAVE GRANTED TO US THE RIGHT TO BUILD AND OPERATE OUR
NETWORK USING THEIR RIGHTS-OF-WAY.

    The construction and operation of significant portions of our fiber optic
network depend upon contract rights known as indefeasible rights-of-use.
Indefeasible rights-of-use are commonly used in the telecommunications industry,
but remain a relatively new concept in property law. Although indefeasible
rights-of-use give the holder a number of rights to control the relevant
rights-of-way or fiber optic filaments, legal title remains with the grantor of
the rights. Therefore, the legal status of indefeasible rights-of-use remains
uncertain, and our indefeasible rights-of-use might be voidable in the event of
bankruptcy of the grantor. If we were to lose an indefeasible right-of-use in a
key portion of our network, our ability to service our customers could become
seriously impaired and we could be required to incur significant expense to
resume the operation of our fiber optic network in the affected areas.

    DESPITE OUR EXISTING RIGHTS-OF-WAY, WE MAY BE FORCED TO MAKE SUBSTANTIAL
ADDITIONAL PAYMENTS TO THE AFFECTED LANDOWNERS OR REMOVE OUR NETWORK FROM THEIR
PROPERTY, WHICH WOULD SIGNIFICANTLY HARM OUR BUSINESS AND OUR RESULTS OF
OPERATIONS.

    Our indefeasible rights-of-use depend on the grantor's interest in the
property on which our network is located. To the extent that a grantor of an
indefeasible right-of-use has a limited easement in the underlying property and
not full legal title, the adequacy of our indefeasible rights-of-use could be
challenged in court. For example, in May 1999, AT&T entered into a costly
settlement of a class action suit brought by landowners who asserted that the
railroad-based rights-of-way upon which AT&T had relied to build portions of its
fiber optic network were insufficient to permit AT&T to use these rights-of-way
for telecommunications purposes.

                                       20
<PAGE>
    We believe that it is likely that a number of landowners may make similar
claims against us based on our use of utility rights-of-way for our
telecommunications purposes. In fact, some landowners have already asserted
claims against us on this basis, and, to date, in two cases, rather than
electing to contest the landowners' interpretation of the scope of the easement,
we have made a payment to such landowners to acquire rights-of-way meeting our
requirements. We believe that the easements granted by a substantial number of
landowners to grantors of our indefeasible rights-of-use are similar in scope to
those with respect to which claims have been asserted, and we cannot guarantee
that additional claims will not be made in the future.

    BECAUSE SIGNIFICANT PORTIONS OF OUR FIBER OPTIC NETWORK ARE CONSTRUCTED UPON
RIGHTS-OF-WAY CONTROLLED BY ELECTRIC UTILITY COMPANIES WHICH GENERALLY PLACE THE
OPERATION OF THEIR ELECTRICAL FACILITIES AHEAD OF THE OPERATION OF OUR FIBER
OPTIC NETWORK, WE MAY BE UNABLE TO CONSTRUCT AND OPERATE OUR FIBER OPTIC NETWORK
IN THE AFFECTED AREAS WITHOUT PERIODIC INTERRUPTIONS AND DELAYS CAUSED BY THE
DAY-TO-DAY OPERATIONS OF THESE UTILITY COMPANIES.

    Our rights-of-way agreements with NU, Central Maine Power Company (a
subsidiary of Energy East Corporation), Consolidated Edison
Communications, Inc., and Exelon Capital Partners Corporation contain provisions
which acknowledge the right of these companies to make the provision of
electrical services to their own customers their top priority. These companies
are required only to exercise "reasonable care" with respect to our facilities
and are otherwise free to take whatever actions they deem appropriate with
respect to ensuring or restoring service to their electricity customers, any of
which actions could impair operation of our network. In addition, some of our
ongoing operational efforts are constrained by the limited ability of the
utilities to de-energize segments of their transmission and distribution
facilities in order to permit construction crews to work safely. We have
experienced construction delays in the past as a result of such inability to
timely de-energize certain segments and we may experience such delays in the
future.

RISKS RELATING TO GOVERNMENT REGULATION

    FEDERAL REGULATION OF THE TELECOMMUNICATIONS INDUSTRY IS CHANGING RAPIDLY
AND WE COULD BECOME SUBJECT TO UNFAVORABLE NEW RULES AND REQUIREMENTS WHICH
COULD IMPOSE SUBSTANTIAL FINANCIAL AND ADMINISTRATIVE BURDENS ON US AND
INTERFERE WITH OUR ABILITY TO SUCCESSFULLY EXECUTE OUR BUSINESS STRATEGIES.

    Regulation of the telecommunications industry is changing rapidly. Existing
and future federal, state, and local governmental regulations will greatly
influence our viability. Consequently, undesirable regulatory changes could
adversely affect our business, financial condition and results of operations.

    REVENUES FROM TELECOMMUNICATIONS PROVIDED TO END-USERS, WHICH REPRESENT A
PORTION OF OUR REVENUES, ARE SUBJECT TO CONTRIBUTIONS TO THE FCC'S UNIVERSAL
SERVICE FUND.

    While we generally do not deal directly with end-users of telecommunications
and are therefore generally exempt from contributing to the FCC's Universal
Service Fund, the FCC treats certain Internet service providers purchasing
telecommunications as end-users. Our revenues from providing telecommunications
to end-users, which represent a portion of our revenues, are therefore subject
to an assessment of 5.6% of gross interstate revenues for the fourth quarter of
2000 and at 6.6% for the first quarter of 2001. Such assessments vary and may
increase from quarter to quarter. If the annual contribution amount would be
less than $10,000, we would qualify for a DE MINIMUS exemption from contribution
to the Fund.

    IF WE BECOME SUBJECT TO REGULATION AS A COMMON CARRIER IN THE FUTURE, WE
WOULD BE SUBJECT TO ADDITIONAL REGULATORY REQUIREMENTS.

    We do not believe that we are currently a "common carrier," but that status
could change based on differing interpretations of current regulations,
regulatory changes and changes in the way we conduct our business. If we become
regulated as a common carrier, we would have to file tariffs for our services
with the FCC and submit other reports, and would be required to contribute to
federal

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<PAGE>
funds including, but not limited to, those established for Telecommunications
Relay Services, for the management of the North American Numbering Plan and for
Local Number Portability. These regulatory requirements could impose substantial
burdens on us.

    The Communications Act of 1934 requires incumbent local telephone companies
to provide elements of their networks to competitors on an unbundled basis. In a
recent decision, the FCC determined that dark fiber is a network element that
incumbent local telephone companies must provide to others. The availability of
this alternative source of supply may increase competition among providers of
dark fiber services and could decrease the demand for our dark fiber.

    REGULATORY CHANGES COULD AFFECT RELATIONSHIPS BETWEEN US, OUR COMPETITORS
AND CUSTOMERS IN UNFORESEEABLE WAYS THAT COULD REDUCE OUR BUSINESS
OPPORTUNITIES.

    Our relationships with the telecommunications companies with whom we deal
are all affected by our respective positions in the FCC's regulatory scheme.
Accordingly, changes in federal telecommunications law may affect our business
by virtue of the interrelationships that exist among us and many of these
regulated telecommunications entities. It is difficult for us to forecast at
this time how these changes will affect us in light of the complex
interrelationships that exist in the industry and the different levels of
regulation.

    STATE REGULATION OF COMPANIES PROVIDING TELECOMMUNICATIONS SERVICES VARIES
SUBSTANTIALLY FROM STATE TO STATE AND WE MAY BECOME SUBJECT TO BURDENSOME AND
RESTRICTIVE STATE REGULATIONS AS WE EXPAND OUR FIBER OPTIC NETWORK INTO A
BROADER GEOGRAPHIC AREA, WHICH COULD INTERFERE WITH OUR OPERATIONS AND OUR
ABILITY TO MEET OUR STRATEGIC OBJECTIVES.

    We may be subject to state regulation, which can vary substantially from
state to state. NEON Optica's subsidiaries in New York and Connecticut have
obtained authority to provide intrastate telecommunications services on a
competitive common carrier basis. Therefore, these subsidiaries are subject to
the obligations that applicable law places on all similarly certificated common
carriers including the filing of tariffs, state regulation of certain service
offerings, pricing, payment of regulatory fees and reporting requirements. The
costs of compliance with these regulatory obligations, or any of the regulatory
requirements of other states to which we might become subject, could have a
material adverse effect on our operations. Moreover, some of our rights-of-way
depend on our status as a common carrier in these states, and if that status
were to be successfully challenged, those rights-of-way could be terminated.

    MUNICIPAL REGULATION OF OUR ACCESS TO PUBLIC RIGHTS-OF-WAY IS SUBJECT TO
CHANGE AND COULD IMPOSE ADMINISTRATIVE BURDENS THAT WOULD ADVERSELY AFFECT OUR
BUSINESS.

    Local governments typically retain the ability to license public
rights-of-way, subject to the federal requirement that local governments may not
prohibit the provision of telecommunications services. Changes in local
government regulation could impose additional costs on our business and limit
our operations. Local authorities affect the timing and costs associated with
our use of public rights-of-way.

RISKS RELATING TO OUR CAPITALIZATION

    BECAUSE WE HAVE A LARGE AMOUNT OF DEBT, WE WILL BE REQUIRED TO DEVOTE A
SIGNIFICANT PORTION OF OUR CASH FLOW TO PAY INTEREST AND WE MAY NOT HAVE
SUFFICIENT REMAINING CASH FLOW TO MEET OUR OTHER OBLIGATIONS AND EXECUTE OUR
BUSINESS STRATEGIES.

    We are highly leveraged. Our high degree of debt, including NEON Optica's
$180 million 12 3/4% Senior Notes Due 2008, could have adverse consequences to
the holders of NEON Communication's equity securities. Commencing on August 15,
2002, a substantial portion of our cash flow will be dedicated to the payment of
the $22,950,000 per annum of interest expense associated with our debt and such
cash flow may be insufficient to meet our payment obligations on our debt in
addition to

                                       22
<PAGE>
paying our other obligations as they become due. In addition, due to our
leverage ratio, our ability to obtain any necessary financing in the future for
completion of our network or other purposes may be impaired. Also, certain of
our future borrowings may be at variable rates of interest that could cause us
to be vulnerable to increases in interest rates. Because we are highly
leveraged, we may be at a competitive disadvantage to our competitors and may be
especially vulnerable to a downturn in our business or the economy generally, or
to delays in or increases in the costs of operating and constructing our
network.

    IN CONNECTION WITH NEON OPTICA'S SUBSTANTIAL PUBLIC DEBT, NEON OPTICA HAS
AGREED TO SIGNIFICANT RESTRICTIONS ON ITS OPERATIONS THAT LIMIT OUR ABILITY TO
ENTER INTO MAJOR CORPORATE TRANSACTIONS, AND AS A RESULT WE MAY BE UNABLE TO
PURSUE POTENTIAL CORPORATE OPPORTUNITIES WHICH WOULD BENEFIT NEON COMMUNICATIONS
AND ITS STOCKHOLDERS.

    The indenture under which NEON Optica's debt was issued imposes significant
operating and financing restrictions on us and our present and future
subsidiaries. These restrictions affect, and in certain cases significantly
limit or prohibit, among other things, our ability to incur indebtedness, pay
dividends and make other restricted payments, create liens, issue and sell
capital stock of subsidiaries, guarantee indebtedness, sell assets or
consolidate, merge or transfer all or substantially all of our assets. These
limitations could prevent us from exploiting corporate opportunities as they
arise, which could be detrimental to the interests of our stockholders.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    We are exposed to market risk related to changes in interest rates, but do
not believe that this exposure is material. We do not use derivative financial
instruments for speculative or trading purposes.

    We maintain a short-term investment portfolio consisting mainly of corporate
debt securities and U.S. government agency discount notes with an average
maturity of less than six months. These held-to-maturity securities are subject
to interest rate risk and will fall in value if market interest rates increase.
If market interest rates were to increase immediately and uniformly by 10% from
levels that existed at March 31, 2001, the fair value of the portfolio would
decline by an immaterial amount. Because we have the ability to hold our fixed
income investments until maturity, we would not expect our operating results or
cash flows to be materially affected.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

    (a) Exhibits

       None.

    (b) No Current Reports on Form 8-K were filed during the quarterly period
       covered by this Report.

                                       23
<PAGE>
                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized, on this fifteenth day
of May, 2001.

<TABLE>
<S>                                                    <C>  <C>
NEON COMMUNICATIONS, INC.

By: /s/ Stephen E. Courter
                                                       Date:
-------------------------------------------
Stephen E. Courter
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
NEON Communications, Inc.

By: /s/ William F. Fennell
                                                       Date:
-------------------------------------------
William F. Fennell
VICE PRESIDENT OF FINANCE, CHIEF FINANCIAL OFFICER
AND TREASURER (PRINCIPAL FINANCIAL OFFICER)
NEON Communications, Inc.
</TABLE>

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