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
                                       OR

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


Commission File No.                000-49899
                   -------------------------------------------------------------


                            ATX COMMUNICATIONS, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                     13-4078506
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
  incorporation or organization)


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


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

                              CORECOMM HOLDCO, INC.
--------------------------------------------------------------------------------
              (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),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                 Yes X No ______

The number of shares  outstanding  of the  issuer's  common stock as of June 30,
2002 was 30,000,054.




    ATX Communications, Inc. (formerly CoreComm Holdco, Inc and Subsidiaries)




                                                      Index

PART I.  FINANCIAL INFORMATION                                                                             Page
------------------------------                                                                             ----

                                                                                                      
Item 1.      Financial Statements
             Condensed Consolidated Balance Sheets -
                June 30, 2002 (Unaudited) and December 31, 2001 .........................................    2
             Condensed Consolidated Statements of Operations -
                Three and Six months ended June 30, 2002 and 2001 (Unaudited) ...........................    3
             Condensed Consolidated Statement of Shareholders' Equity (Deficiency) -
                Six months ended June 30, 2002 (Unaudited) ..............................................    4
             Condensed Consolidated Statements of Cash Flows -
                Six months ended June 30, 2002 and 2001 (Unaudited) .....................................    5
             Notes to Unaudited Condensed Consolidated Financial Statements .............................    6

Item 2.      Management's Discussion and Analysis of Results of
                 Operations and Financial Condition .....................................................   22

Item 3.      Quantitative and Qualitative Disclosures about Market Risk .................................   36

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

Item 1.      Legal Proceedings...........................................................................   37

Item 4.      Submission of Matters to A Vote of Security Holders.........................................   42

Item 5.      Other Information...........................................................................   42

Item 6.      Exhibits and Reports on Form 8-K ...........................................................   42

SIGNATURES ..............................................................................................   45
----------






                            ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                                               Condensed Consolidated Balance Sheets
                                                                                           June 30,                December 31,
                                                                                             2002                       2001
                                                                                        ---------------           ---------------
                                                                                          (Unaudited)                (See Note)
                                                                                                            
Assets
Current assets:
  Cash and cash equivalents                                                             $    20,352,000           $    24,966,000
  Accounts receivable-trade, less allowance for doubtful
     accounts of $8,245,000 (2002) and $9,759,000 (2001)                                     36,544,000                32,261,000
  Due from CoreComm Limited                                                                          --                   646,000
  Due from NTL Incorporated                                                                     298,000                        --
  Other                                                                                       3,471,000                 3,683,000
                                                                                        -----------------------------------------
Total current assets                                                                         60,665,000                61,556,000

Fixed assets, net                                                                            74,446,000                86,722,000
Investment in CoreComm Limited                                                                3,863,000                 3,863,000
Goodwill                                                                                    147,380,000               147,380,000
Intangible assets, net                                                                        5,539,000                 5,706,000
Other,  net of accumulated  amortization  of $1,552,000  (2002) and $1,045,000
  (2001)                                                                                     10,579,000                11,393,000
                                                                                        -----------------------------------------
                                                                                        $   302,472,000           $   316,620,000
                                                                                        =========================================

Liabilities and shareholders' equity (deficiency)
Current liabilities:
  Accounts payable                                                                      $    56,985,000           $    37,348,000
  Accrued expenses                                                                           61,465,000                67,766,000
  Due to NTL Incorporated                                                                            --                   917,000
  Due to CoreComm Limited                                                                       320,000                        --
  Current portion of long-term debt and capital lease obligations                             9,398,000                 9,667,000
  Deferred revenue                                                                           25,670,000                29,652,000
                                                                                        -----------------------------------------
Total current liabilities                                                                   153,838,000               145,350,000

Long-term debt                                                                              145,084,000               144,413,000
Notes payable to NTL Incorporated                                                            16,696,000                15,807,000
Capital lease obligations                                                                       244,000                   267,000

Commitments and contingent liabilities

Shareholders' equity (deficiency):
preferred stock-- $.01 par value, authorized
     10,000,000 shares; issued and outstanding none                                                  --                        --
  Common stock-- $.01 par value, authorized 250,000,000
     shares; issued and outstanding 30,000,000 shares                                           300,000                   300,000
Additional paid-in capital                                                                1,022,634,000             1,022,634,000
Deficit                                                                                  (1,036,324,000)           (1,012,151,000)
                                                                                        -----------------------------------------
                                                                                            (13,390,000)               10,783,000
                                                                                        -----------------------------------------
                                                                                        $   302,472,000           $   316,620,000
                                                                                        =========================================


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

See accompanying notes.


                                                                2






                      ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

                                 Condensed Consolidated Statements of Operations
                                                   (Unaudited)


                                            Three Months Ended June 30,            Six Months Ended June 30,
                                              2002               2001               2002               2001
                                         -------------      -------------      -------------      -------------

                                                                                      
Revenues                                 $  75,209,000      $  73,126,000      $ 149,520,000      $ 145,937,000

Costs and expenses
Operating                                   48,758,000         57,662,000         96,796,000        121,182,000
Selling, general and administrative         20,224,000         23,319,000         42,537,000         54,114,000
Corporate                                    1,616,000            812,000          3,314,000          2,910,000
Non-cash compensation                               --          3,234,000                 --          6,468,000
Recapitalization costs                       4,270,000                 --          5,452,000                 --
Other charges                                       --         33,366,000                 --         33,485,000
Asset impairments                                   --                 --                 --        167,599,000
Depreciation                                 9,140,000         11,567,000         18,021,000         23,579,000
Amortization                                    83,000         23,097,000            167,000         54,606,000
                                         --------------------------------      --------------------------------
                                            84,091,000        153,057,000        166,287,000        463,943,000
                                         --------------------------------      --------------------------------
Operating loss                              (8,882,000)       (79,931,000)       (16,767,000)      (318,006,000)

Other income (expense)
Interest income and other, net                 100,000            656,000            234,000          1,320,000
Interest expense                            (3,737,000)        (7,383,000)        (7,640,000)       (11,524,000)
                                         --------------------------------      --------------------------------
Loss before income tax benefit             (12,519,000)       (86,658,000)       (24,173,000)      (328,210,000)
Income tax benefit                                  --             33,000                 --             33,000
                                         --------------------------------      --------------------------------
Net loss                                 $ (12,519,000)     $ (86,625,000)     $ (24,173,000)     $(328,177,000)
                                         ================================      ================================

Basic and diluted net loss per share     $        (.42)     $       (3.04)     $        (.81)     $      (11.50)
                                         ================================      ================================

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

See accompanying notes.


                                                       3






                    ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)
                      Condensed Consolidated Statement of Shareholders' Equity (Deficiency)
                                                   (Unaudited)


                                                  Common Stock
                                      ----------------------------------        Additional
                                           Shares               Par           Paid-In Capital         Deficit
                                      ---------------------------------------------------------------------------
                                                                                   
Balance, December 31, 2001                 30,000,000     $       300,000     $ 1,022,634,000     $(1,012,151,000)
Net loss for the six months ended
June 30, 2002                                      --                  --                  --         (24,173,000)
                                      ---------------------------------------------------------------------------
Balance, June 30, 2002                     30,000,000     $       300,000     $ 1,022,634,000     $(1,036,324,000)
                                      ===========================================================================



See accompanying notes.


                                                       4






        ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

                      Condensed Consolidated Statements of Cash Flows
                                        (Unaudited)

                                                              Six Months Ended June 30,
                                                                2002              2001
                                                           ------------------------------

                                                                       
Net cash provided by (used in) operating activities        $  1,126,000      $(25,382,000)

Investing activities
Purchase of fixed assets                                     (5,448,000)       (6,192,000)
Proceeds from sales of marketable securities                         --         2,737,000
                                                           ------------------------------
Net cash (used in) investing activities                      (5,448,000)       (3,455,000)

Financing activities
Proceeds from borrowing, net of financing costs                      --        63,679,000
Principal payments                                                   --          (831,000)
Principal payments of capital lease obligations                (292,000)       (5,512,000)
                                                           ------------------------------
Net cash provided by (used in) financing activities            (292,000)       57,336,000
                                                           ------------------------------
(Decrease) increase in cash and cash equivalents             (4,614,000)       28,499,000
Cash and cash equivalents at beginning of period             24,966,000        22,773,000
                                                           ------------------------------
Cash and cash equivalents at end of period                 $ 20,352,000      $ 51,272,000
                                                           ==============================

Supplemental disclosure of cash flow information
  Cash paid for interest                                   $  5,463,000      $  6,410,163
                                                           ==============================

Supplemental schedule of non-cash investing activities
  Liabilities incurred to acquire fixed assets             $    293,000      $  6,786,000
                                                           ==============================


See accompanying notes.


                                            5



   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

            Notes to the Condensed Consolidated Financial Statements
                                   (Unaudited)

Note 1.  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  pursuant  to the  rules  and  regulations  of  the  SEC.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results  for the three and six  months  ended  June 30,  2002 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2002. For further information,  refer to the consolidated financial
statements and footnotes  thereto  included in Item 14(d) of CoreComm  Limited's
annual report on Form 10-K/A for the year ended December 31, 2001.


Note 2.  ATX Communications Recapitalization

In April 2001, ATX  Communications,  Inc.  (formerly  CoreComm Holdco,  Inc. and
Subsidiaries),  referred to as the  Company,  and CoreComm  Limited  completed a
reevaluation  of their  business  plans in light of market  conditions  and made
significant modifications to the plans. The Company streamlined its strategy and
operations to focus on its two most  successful and promising lines of business.
The   first   is   integrated    communications    products   and   other   high
bandwidth/data/web-oriented  services  for the  business  market.  The second is
bundled local telephony and Internet products for the residential market, with a
focus on using Internet interfaces,  as well as our call centers, to efficiently
sell, to install our products and service our customers.

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

In  October  2001,   the  Company  and  CoreComm   Limited   commenced  the  ATX
Communications  recapitalization.  In the first phase of the ATX  Communications
recapitalization, which was completed in December 2001, the Company and CoreComm
Limited entered into agreements  with holders of  approximately  $600 million of
outstanding  indebtedness and preferred stock whereby the holders agreed,  among
other things,  to exchange their debt and preferred stock for  approximately 87%
of the Company's common stock. In addition, the holders of CoreComm Limited's 6%
Convertible Subordinate Notes due 2006 received the amount of an October 1, 2001
interest payment of $4.8 million in the aggregate.

                                       6

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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

Note 2.  ATX Communications Recapitalization (continued)

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




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


(1) $164.75  million was  outstanding  as of December  31,  2001,  of which $160
million was exchanged.




The Company  exchanged the  approximately  $10.8  million  principal and accrued
interest  of  10.75%   Unsecured   Convertible   PIK  Notes  Due  2011  and  the
approximately  $18.0  million  principal  and accrued  interest of 10.75% Senior
Unsecured  Convertible  PIK Notes Due 2010 for shares of its common  stock.  The
Company recorded an extraordinary  gain of $25.7 million from the extinguishment
of these notes,  and incurred  costs of $2.7 million in 2001 in connection  with
the ATX Communications recapitalization. This gain is based on the fair value of
$0.9797 per share on December  31, 2001 for the shares  issued by the Company in
exchange for the notes. The Company  incurred  additional  costs,  which consist
primarily of employee incentives, legal fees, accounting fees and printing fees,
in connection  with the ATX  Communications  recapitalization  of $4,270,000 and
$5,452,000 during the three and six months ended June 30, 2002.

The   shareholders  and  noteholders  who  exchanged  their  shares  and  notes,
respectively,  received  shares of the Company and no longer have  securities of
CoreComm Limited.

Following  the  completion  of  the  first  phase  of  the  ATX   Communications
recapitalization on December 28, 2001 (but prior to the completion of the second
phase on July 1, 2002),  approximately 87% of the Company's  outstanding shares,
or  26,056,806  shares,  were owned by the former  holders of  indebtedness  and
preferred stock of the Company and CoreComm  Limited,  and  approximately 13% of
the Company's outstanding shares, or 3,943,248 shares, were held by the CoreComm
Limited.

                                       7

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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

Note 2.  ATX Communications Recapitalization (continued)

As a result  of the  completion  of the  first  phase of the ATX  Communications
recapitalization,  the Company  held $160 million  principal  amount of CoreComm
Limited's  6%  Convertible  Subordinated  Notes Due 2006,  approximately  $105.7
million  principal  amount of  CoreComm  Limited's  Senior  Unsecured  Notes due
September 29, 2003,  approximately  51,000 shares of CoreComm Limited's Series A
preferred  stock and  250,000  shares of CoreComm  Limited's  Series B preferred
stock. As of June 30, 2002, the Company's  investment in CoreComm  Limited notes
and preferred stock was $3,863,000.

In the second  phase of the ATX  Communications  recapitalization,  the  Company
offered to all  holders  of  CoreComm  Limited  common  stock and all  remaining
holders of 6%  Convertible  Subordinated  Notes due 2006 of CoreComm  Limited to
exchange shares of the Company's  common stock for their CoreComm Limited common
stock and their notes, respectively. The Company completed the exchange offer on
July 1, 2002, and issued  3,610,624  shares of common stock to former holders of
CoreComm Limited common stock and holders of 6% Convertible  Subordinated  Notes
due  2006 of  CoreComm  Limited.  Following  the  exchange  offer,  the  Company
transferred the shares of CoreComm  Limited common stock that it received in the
exchange  offer to a  wholly-owned  subsidiary.  The  Company  then  merged this
subsidiary into CoreComm Limited,  with CoreComm Limited surviving the merger as
a wholly-owned  subsidiary of the Company.  CoreComm  Limited has surrendered to
the  Company  all of the shares of the  Company's  common  stock  that  CoreComm
Limited held at the completion of the exchange offers,  excluding 39,168 shares,
which are being held for holders of the 6%  Convertible  Subordinated  Notes who
did not  participate  in the exchange  offer.  In exchange for CoreComm  Limited
surrendering such shares of the Company's common stock, CoreComm Limited and the
Company have agreed to waivers and  amendments  to delay  CoreComm  Limited from
having to make any payments with respect to the CoreComm Limited securities held
by the Company  through  April 2003.  Also,  as part of the  exchange  agreement
between the Company and  CoreComm  Limited,  the due date of CoreComm  Limited's
Senior Unsecured Notes was extended until September 29, 2023.

In connection with the second phase of the ATX Communications  recapitalization,
on July 1, 2002 the Company  converted  all of the 6%  Convertible  Subordinated
Notes  Due 2006 of  CoreComm  Limited  and all of the  shares  of Series A and B
preferred  stock of  CoreComm  Limited  that it owned  into  shares of  CoreComm
Limited common stock.  All of these shares of CoreComm  Limited were tendered in
the exchange offer, and subsequently,  all of the shares received by the Company
in  the  exchange  offer  were   cancelled.   The  Company   continues  to  hold
approximately  $105.7  million  principal  amount of CoreComm  Limited's  Senior
Unsecured Notes.


                                       8


   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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

Note 2.  ATX Communications Recapitalization (continued)

In connection  with the ATX  Communications  recapitalization,  on July 2, 2002,
Nasdaq  transferred  CoreComm Limited's listing on the Nasdaq National Market to
the Company.  On May 16, 2002, Nasdaq provided CoreComm Limited with notice of a
Nasdaq Staff  Determination  indicating  that CoreComm  Limited common stock was
subject to delisting from the Nasdaq  National Market because  CoreComm  Limited
did not  comply  with the  minimum  bid price and the  minimum  market  value of
publicly held shares  requirements  for continued  listing.  On June 28, 2002, a
hearing  was held  before a Nasdaq  Listing  Qualifications  Panel to review the
Nasdaq  Staff  Determination.  The Panel has not yet issued its  opinion.  Under
Nasdaq rules,  pending a decision by the Panel,  the Company's common stock will
continue to trade on the Nasdaq  National  Market.  We cannot assure you that we
will be able to maintain the Nasdaq  National  Market  listing for shares of our
common stock. If our common stock is delisted from the Nasdaq  National  Market,
it could, among other things, have a negative impact on the trading activity and
price of the  common  stock and  could  make it more  difficult  for us to raise
equity  capital in the future.  If our common stock is delisted  from the Nasdaq
National Market, the shares will likely begin trading on the OTC Bulletin Board.


Note 3.  Recent Accounting Pronouncements

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

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

In June 2001,  the FASB issued SFAS No. 141,  "Business  Combinations,"  and No.
142,  "Goodwill  and Other  Intangible  Assets."  SFAS No. 141 requires that the
purchase  method of accounting be used for all business  combinations  initiated
after  June  30,  2001.  Use of the  pooling-of-interests  method  is no  longer
permitted.  SFAS No. 141 also includes  guidance on the initial  recognition and
measurement  of  goodwill  and other  intangible  assets  acquired in a business
combination  that is  completed  after  June 30,  2001.  SFAS  No.  142 ends the
amortization of goodwill and indefinite-lived  intangible assets. Instead, these
assets must be reviewed  annually (or more frequently under certain  conditions)
for impairment in accordance  with this  statement.  This impairment test uses a
fair value approach rather than the undiscounted cash flow

                                       9

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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

Note 3.  Recent Accounting Pronouncements (continued)

approach previously required by SFAS No. 121,  "Accounting for the Impairment of
Long-Lived  Assets and for  Long-Lived  Assets to Be  Disposed  Of." The Company
adopted  SFAS No. 142 on January 1, 2002.  The adoption of this new standard had
no significant effect on the results of operations,  financial condition or cash
flows of the Company,  other than  amortization of goodwill ceased as of January
1, 2002.

Upon the  adoption of SFAS No. 142,  the  Company  performed  an analysis of its
intangible  assets acquired before July 1, 2001 to determine whether they should
be  classified  and accounted  for as part of or separate  from  goodwill.  As a
result of the analysis, the Company determined that its identifiable  intangible
assets such as customer lists and LMDS licenses do not meet the indefinite  life
criteria  of SFAS No.  142.  Additionally,  the Company  determined  that,  with
respect  to these  assets,  no changes in the  remaining  useful  lives of these
assets were required.

The Company also  performed an evaluation  for  impairment of its goodwill as of
January 1, 2002, and determined that no impairment  charge was required.  Absent
any new  indicators of impairment,  the Company's next  evaluation of impairment
will be the annual test on October 1, 2002.

The following  table shows the Company's net loss and our basic and diluted loss
per share,  had SFAS No.  142 been in effect  for the six months  ended June 30,
2001.



                                         Three Months Ended June 30,              Six Months Ended June 30,
                                           2002                2001                2002               2001
                                      --------------      -------------      --------------      -------------
                                                                                     
Net loss-- as reported                $  (12,519,000)     $ (86,625,000)     $  (24,173,000)     $(328,177,000)
Goodwill amortization                             --         22,989,000                  --         54,359,000
Workforce amortization                            --             21,000                  --             52,000
                                      ------------------------------------------------------------------------
Net loss-- as adjusted                $  (12,519,000)     $ (63,615,000)     $  (24,173,000)     $(273,766,000)
                                      ========================================================================

Basic and diluted loss per share:
Net loss per share-- as reported      $        (0.42)     $       (3.04)     $        (0.81)     $      (11.50)
Goodwill amortization                             --               0.81                  --               1.91
Workforce amortization                            --                 --                  --                 --
                                      ------------------------------------------------------------------------
Net loss per share-- as adjusted      $        (0.42)     $       (2.23)     $        (0.81)     $       (9.59)
                                      ========================================================================


                                       10

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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


Note 4.  Revenues

Revenue consists of:



                                              Three Months Ended June 30,        Six Months Ended June 30,
                                                2002              2001             2002             2001
                                            ---------------------------------------------------------------
                                                                                   
Local exchange services                     $ 25,783,000     $ 23,712,000     $ 52,055,000     $ 47,422,000
Toll-related telephony services               18,221,000       20,423,000       35,910,000       41,622,000
Internet, data and web-related services       22,931,000       22,927,000       46,375,000       45,361,000
Other (a)                                      8,274,000        6,064,000       15,180,000       11,532,000
                                            ---------------------------------------------------------------
                                            $ 75,209,000     $ 73,126,000     $149,520,000     $145,937,000
                                            ===============================================================

(a) Other includes carrier access billing, reciprocal compensation,  information
services, wireless and paging.



Note 5.  Asset Impairments

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

Note 6.  Intangible Assets

Intangible assets consist of:

                                                        June 30,    December 31,
                                                          2002          2001
                                                       -------------------------
                                                             (unaudited)
LMDS license costs                                     $4,230,000     $4,230,000
Customer lists, net of accumulated amortization of
  $1,031,000 (2002) and $864,000 (2001)                 1,309,000      1,476,000
                                                       -------------------------
                                                       $5,539,000     $5,706,000
                                                       =========================


                                       11

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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

Note 7.  Fixed Assets

Fixed assets consist of:

                                      June 30,         December 31,
                                        2002               2001
                                   --------------------------------
                                    (unaudited)
Operating equipment                $ 105,064,000      $ 102,529,000
Computer hardware and software        54,108,000         53,313,000
Other equipment                       13,091,000         12,956,000
Construction-in-progress               2,280,000                 --
                                   --------------------------------
                                     174,543,000        168,798,000
Accumulated depreciation            (100,097,000)       (82,076,000)
                                   --------------------------------
                                   $  74,446,000      $  86,722,000
                                   ================================


Note 8.  Accrued Expenses

Accrued expenses consist of:

                                     June 30,     December 31,
                                      2002            2001
                                  ---------------------------
                                  (unaudited)
Payroll and related               $ 4,838,000     $ 7,517,000
Professional fees                   1,244,000         935,000
Taxes, including income taxes      14,502,000      16,534,000
Accrued equipment purchases           176,000         385,000
Toll and interconnect              27,350,000      28,668,000
Reorganization costs                5,929,000       7,273,000
Other                               7,426,000       6,454,000
                                  ---------------------------
                                  $61,465,000     $67,766,000
                                  ===========================


                                       12

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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

Note 9.  Long-Term Debt

Long-term debt consists of:



                                                                    June 30,      December 31,
                                                                      2002            2001
                                                                 -----------------------------
                                                                 (unaudited)
                                                                            
Senior secured credit facility, less unamortized discount of
   $11,016,000 (2002) and $11,687,000 (2001)                     $145,084,000     $144,413,000
Other                                                                      --           33,000
                                                                 -----------------------------
                                                                  145,084,000      144,446,000
Less current portion                                                       --           33,000
                                                                 -----------------------------
                                                                 $145,084,000     $144,413,000
                                                                 =============================


The interest rate on the senior  secured credit  facility was initially,  at the
Company's option, either 3.25% per annum plus the base rate, which is the higher
of the prime rate or the federal funds  effective  rate plus 0.5% per annum;  or
the  reserve-adjusted  London  Interbank  Offered Rate plus 4.25% per annum.  In
April 2001 the interest  rate was amended to, at the  Company's  option,  either
3.5% per annum plus the base rate,  which is the higher of the prime rate or the
federal funds effective rate plus 0.5% per annum, or the reserve-adjusted London
Interbank  Offered Rate plus 4.5% per annum.  Interest is payable monthly on the
facility.  The unused  portion of the  facility is subject to a  commitment  fee
equal to 1.25% per annum  payable  quarterly,  subject to reduction to 1.00% per
annum based upon the amount  borrowed  under the facility.  At June 30, 2002 and
December 31, 2001, the effective  interest rate on the amounts  outstanding  was
6.75% and 6.86%,  respectively.  Effective  April 13, 2002, the interest rate on
the facility is 6.75%, which will remain in effect until October 12, 2002.


Note 10.  Related Party Transactions

Some of the officers and directors of the Company are also officers or directors
of NTL Incorporated, referred to as NTL. In April 2001, CoreComm Limited and the
Company as co-obligors  issued to NTL $15 million aggregate  principal amount of
10.75%  Unsecured  Convertible  PIK Notes Due April 2011. At June 30, 2002,  and
December  31,  2001  the  total  amount  of  the  notes  outstanding,  less  the
unamortized discount of $347,000, and $367,000, was $16,696,000 and $15,807,000,
respectively.

NTL  provided  the  Company  with  management,  financial,  legal and  technical
services,  and continues to provide access to office space and equipment and use
of  supplies.  Amounts  charged to the Company by NTL  consisted of salaries and
direct costs  allocated to the Company where  identifiable,  and a percentage of
the portion of NTL's corporate overhead,  which cannot be specifically allocated
to NTL. It is not practicable to determine the amounts of these expenses

                                       13

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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

Note 10.  Related Party Transactions (continued)

that  would have been  incurred  had the  Company  operated  as an  unaffiliated
entity.  In the opinion of  management,  this  allocation  method is reasonable.
These methods are currently  being  reviewed and it is expected that the charges
for these services  provided by NTL will be reduced  following such review.  NTL
charged the Company  $88,000 and  $136,000  for the three  months ended June 30,
2002 and 2001, respectively,  and $172,000 and $240,000 for the six months ended
June 30, 2002 and 2001, respectively, which are included in corporate expenses.

Until the third quarter of 2001, the Company  provided NTL with access to office
space  and  equipment  and  the use of  supplies  for  which  it  charged  NTL a
percentage  of  the  Company's  total  rent  and  supplies  expense.  It is  not
practicable  to  determine  the amounts of these  expenses  that would have been
incurred had the Company operated as an unaffiliated  entity.  In the opinion of
management,  this  allocation  method was  reasonable.  The Company  charged NTL
$40,000  and  $107,000  for the  three  and six  months  ended  June  30,  2001,
respectively, which reduced corporate expenses.

A subsidiary of the Company provides billing and software  development  services
to  subsidiaries of NTL. The Company charges an amount in excess of its costs to
provide  these  services.  General  and  administrative  expenses  were  reduced
$254,000  and  $332,000  for the  three  months  ended  June 30,  2002 and 2001,
respectively,  and  $566,000 and $799,000 for the six months ended June 30, 2002
and 2001, respectively, as a result of these charges.

In 2001,  the Company and NTL entered into a license  agreement  whereby NTL was
granted an exclusive, irrevocable, perpetual license to certain billing software
developed by the Company for telephony rating, digital television events rating,
fraud management and other tasks. The sales price was cash of $12.8 million. The
billing  software was being used by NTL at the time of this  agreement,  and was
being  maintained  and  modified  by  the  Company  under  an  ongoing  software
maintenance and development outsourcing  arrangement between the companies.  The
Company  recorded  the  aggregate  $12.8  million  as  deferred  revenue,  to be
recognized over three years,  of which  $1,069,000 and $2,137,000 was recognized
during the three and six months ended June 30, 2002, respectively.

The Company  leases office space from entities  controlled by an individual  who
beneficially  owns 34% of the outstanding  shares of the Company's common stock.
Rent  expense for these leases was  approximately  $450,000 and $400,000 for the
three  months  ended  June 30,  2002 and 2001,  respectively  and  approximately
$900,000  and  $800,000  for the six  months  ended  June  30,  2002  and  2001,
respectively.


                                       14

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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

Note 11.  Shareholders' Equity

Stock Split

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

Non-Cash Compensation

In April 2000, the  Compensation  and Option  Committee of the CoreComm  Limited
Board of Directors  approved  the issuance of options to purchase  approximately
2,747,000  shares of CoreComm  Limited  common stock to various  employees at an
exercise  price of  $14.55,  which  was less than the fair  market  value of the
CoreComm Limited's common stock on the date of the grant. In accordance with APB
Opinion No. 25,  "Accounting  for Stock Issued to Employees," in April 2000, the
Company recorded a non-cash  compensation expense of approximately $29.0 million
and a non-cash deferred expense of approximately $31.3 million.  From April 2000
to June 30,  2001,  $16.2  million of the  deferred  non-cash  compensation  was
charged to expense,  including  $3.3 and $6.5  million  during the three and six
months ended June 30, 2001, respectively.

Stockholder Rights Plan

The Company  adopted a stockholder  rights plan in December  2001. In connection
with the  stockholder  rights plan,  the Board of Directors  declared and paid a
dividend of one preferred  share  purchase  right for each share of common stock
outstanding on December 17, 2001. Each right entitles the holder,  under certain
potential  takeover events, to purchase from the Company one one-thousandth of a
share of Series A Junior Participating  Preferred Stock, referred to as Series A
Preferred Stock, at an initial exercise price of $8.82 as determined on July 10,
2002. The exercise price is subject to future  adjustment.  The rights expire on
December 17, 2011 unless an exchange or  redemption  or a completion of a merger
occurs first.  There are 1,000,000 shares of Series A Preferred Stock authorized
for issuance under the plan. No shares of Series A Preferred Stock are issued or
outstanding.

If any Shares of Series A Preferred  Stock are issued they will be entitled to a
minimum  preferential  quarterly  dividend  payment  of an  amount  equal to the
greater of $.01 per share or 1,000 times the  aggregate  per share amount of all
dividends declared on the Company's common stock since the immediately preceding
dividend  payment  date.  In the event of  liquidation,  the holders of Series A
Preferred  Stock will be entitled to a liquidation  payment of $1 per share plus
accrued and unpaid  dividends.  Each share of Series A Preferred Stock will have
1,000 votes on all  matters and will vote as a single  class with the holders of
the Company's common stock.


                                       15

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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

Note 11.  Shareholders' Equity (continued)

CoreComm Limited Stock Options

As of June 30, 2002, there were approximately  22.2 million options  outstanding
to purchase shares of CoreComm  Limited common stock,  with an average  weighted
exercise price of $4.80. If such options are exercised,  the holder will receive
common stock of CoreComm Limited,  which is currently a wholly-owned  subsidiary
of the Company.


Note 12.  Other Charges

Other charges of  $33,366,000  and  $33,485,000  during the three and six months
ended June 30, 2001, respectively,  relate to the Company's announcements in May
and July 2001 that it was taking additional  actions to reorganize,  re-size and
reduce  operating  costs and create  greater  efficiency in various areas of the
Company.  These  costs  in 2001  were  for  approximately  630  employees  to be
terminated of which none were employed by the Company as of June 30, 2002.

The following table  summarizes the  reorganization  charges utilized during the
six months ended June 30, 2002:



                                   Employee
                                   Severance       Lease
                                  And Related       Exit         Agreement
                                    Costs          Costs        Terminations       Total
                                  --------------------------------------------------------
                                                      (in thousands)
                                                                     
Balance, December 31, 2001        $   509         $ 3,106         $ 3,658         $ 7,273
Adjustments                            60               2             (64)             (2)
Utilized                             (420)           (647)           (275)         (1,342)
                                  -------         -------         -------         -------
Balance, June 30, 2002            $   149         $ 2,461         $ 3,319         $ 5,929
                                  =======         =======         =======         =======



Note 13.  Commitments and Contingent Liabilities

As of June 30,  2002,  the Company had  purchase  commitments  of  approximately
$6,844,000 outstanding.

The Company  purchases  goods and services  from a wide variety of vendors under
contractual and other arrangements that sometimes give rise to litigation in the
ordinary  course of business.  The Company also provides goods and services to a
wide range of customers under  arrangements that sometimes lead to disputes over
payment, performance and other obligations.  Some of these disputes,  regardless
of their merit, could subject the Company to costly litigation and the diversion
of its technical and/or management personnel. Additionally, any liability from

                                       16

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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


Note 13.  Commitments and Contingent Liabilities (continued)

litigation  that is not  covered  by the  Company's  insurance  or  exceeds  its
coverage  could  have a  material  adverse  effect  on its  business,  financial
condition and/or  operating  results.  Currently,  the Company has the following
outstanding  matters,  which,  if  resolved  unfavorably,  could have a material
adverse effect on the Company's business,  financial condition and/or results of
operations:

   o  The  Company  has  received  correspondence  dated  July  23,  2002,  from
      Verizon's  operating  subsidiary in Pennsylvania  alleging that Verizon is
      owed a total of  approximately  $12.6  million for  products  and services
      allegedly  purchased in that state and  threatening  to implement  account
      embargo and service suspension procedures if payment of the alleged amount
      is not received by August 23,  2002.  The July 23 letter also alleges that
      Verizon  has the right to  request a  security  deposit  under  applicable
      contracts and tariffs and demands  payment of such a deposit in the amount
      of   $5,650,000   by  July  30,  2002.   The  Company  has  also  received
      correspondence  dated July 23, 2002 from Verizon's operating subsidiary in
      New Jersey  alleging  the right to demand a security  deposit for products
      and services purchased in that state and demanding payment of a deposit of
      $2,700,000 by July 30, 2002.  On August 1, 2002,  the Company sent Verizon
      formal   written  notice  of  its  intent  to  pursue  the  collection  of
      approximately $5 million in credits  associated with disputed charges that
      the Company has withheld  from payment as improperly  billed.  On or about
      August 1, 2002, while the Company was  investigating  the claims set forth
      in Verizon's letters of July 23, the Company received  correspondence from
      Verizon's operating  subsidiaries in New Jersey and Pennsylvania  alleging
      that the Company had failed to pay  undisputed  amounts on a timely  basis
      and the security  deposits as requested,  and stating that Verizon intends
      to terminate its agreements with the Company and discontinue the provision
      of services  and  products in those  states  after  August 31,  2002.  The
      Company is reviewing  Verizon's  claims  concerning the amounts  allegedly
      owed in  Pennsylvania  and  intends  to pay all  undisputed  charges on or
      before the  August 23  embargo  deadline.  The  Company is also  reviewing
      Verizon's demands for a security deposit and termination threats, but upon
      preliminary  investigation the Company believes that Verizon does not have
      the right to make the deposit demands and termination threats set forth in
      its letters.  The Company  intends to pursue all remedies  available to it
      and defend itself  vigorously.  However,  it is not presently  possible to
      predict how these matters will be resolved.

      On August 13, 2002,  Verizon and several of its other subsidiaries filed a
      complaint in the United States District Court for the District of Delaware
      against the Company and several of its indirect wholly owned  subsidiaries
      seeking  payment of  approximately  $37 million  allegedly owed to Verizon
      under  various   contracts   between  Verizon  and  the  Company  and  its
      subsidiaries and under state and federal law.

                                       17

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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


      Note 13.  Commitments and Contingent Liabilities (continued)

      While the  Company has not yet fully  assessed  Verizon's  complaint,  the
      Company  believes that it has meritorious  defenses to the complaint,  and
      further,  that the  amounts  owed are  substantially  less than the amount
      claimed by Verizon.  For example,  we believe the figure  specified in the
      complaint includes  significant amounts of disputes for which Verizon owes
      credits to the Company,  as well as payments that were made by the Company
      in the  ordinary  course of  business.  The Company  intends to pursue all
      remedies  available  to it and  defend  itself  vigorously.  However,  the
      Company  cannot be certain  how or when the matter will be resolved or the
      outcome of the litigation.

      On March 7, 2002, CoreComm  Massachusetts,  Inc., an indirect wholly-owned
      subsidiary of the Company initiated litigation against Verizon New England
      d/b/a Verizon Massachusetts in the Suffolk Superior Court,  Massachusetts,
      alleging breach of contract and seeking a temporary  restraining  order to
      prevent  Verizon  Massachusetts  from suspending  CoreComm  Massachusetts'
      ability to order new  products  and  services  for  failure to pay various
      amounts  allegedly owed under the parties'  interconnection  agreement and
      Verizon's  tariffs in that  state.  On March 13,  2002,  the court  denied
      CoreComm's request for a temporary restraining order and Verizon proceeded
      to implement the threatened  service  embargo.  On April 1, 2002,  Verizon
      filed its answer to CoreComm's  complaint and filed counterclaims  seeking
      payment  of  approximately   $1.2  million   allegedly  owed  by  CoreComm
      Massachusetts under the agreement and tariffs. On April 10, 2002, CoreComm
      Massachusetts  filed an answer denying  Verizon's  claims. On or about May
      20, 2002,  Verizon served CoreComm  Massachusetts  with motion for summary
      judgment in an effort to secure payment without further litigation.  On or
      about June 10, 2002,  CoreComm  Massachusetts  submitted its opposition to
      Verizon's motion for summary judgment asserting various defenses including
      that the amount being sought by Verizon includes  hundreds of thousands of
      dollars of charges that are not  attributable to the Company.  The parties
      are  currently  waiting  for the  court  to rule  on the  pending  summary
      judgment motion.  CoreComm  Massachusetts believes that it will prevail on
      its opposition to Verizon's motion for summary  judgment,  and the company
      intends to pursue all available  claims and defenses.  However,  it is not
      presently  possible to predict how these  matters  will be  resolved.  The
      Company does not believe that the service embargo affecting its subsidiary
      in  Massachusetts  will have a material  adverse  affect on the  Company's
      business, financial condition and/or results of operations.

   o  CoreComm Newco, Inc., an indirect, wholly-owned subsidiary of the Company,
      is currently in litigation  with  Ameritech  Ohio, a supplier from whom it
      purchases  telecommunications  products and services, over the adequacy of
      Ameritech's  performance  under a 1998 contract between CoreComm Newco and
      Ameritech,  and related issues.  This  litigation  began in June 2001 when
      Ameritech  threatened to stop  processing  new orders  following  CoreComm
      Newco's exercise of its right under the contract to withhold  payments for
      Ameritech's performance failures. In response to this threat, CoreComm

                                       18

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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


      Note 13. Commitments and Contingent Liabilities (continued)

      Newco  sought  and  received  an  order  from an  official  of the  Public
      Utilities  Commission of Ohio barring  Ameritech  from refusing to process
      new CoreComm orders. Ameritech has appealed that order to the PUCO and the
      appeal is still pending.

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

      On December  26,  2001,  CoreComm  Newco  filed its answer to  Ameritech's
      amended complaint and  simultaneously  filed three  counterclaims  against
      Ameritech  and  some  of its  affiliates,  alleging  breach  of  contract,
      antitrust violations,  and fraudulent or negligent  misrepresentation.  In
      lieu of  filing an answer to  CoreComm  Newco's  counterclaims,  Ameritech
      filed a series of motions on March 25,  2002,  asking the Court to dismiss
      several of CoreComm  Newco's  counterclaims.  On April 17, 2002,  CoreComm
      Newco filed its opposition to Ameritech's requests for dismissal.  On July
      25, 2002, the district court issued a decision denying  Ameritech's motion
      to dismiss  and  upholding  CoreComm  Newco's  right to  proceed  with its
      antitrust and misrepresentation claims against all counter-defendants.

      The Company  believes  that  CoreComm  Newco has  meritorious  defenses to
      Ameritech's amended complaint, and that the amount currently in dispute is
      substantially  less than the $14.4 million claimed in Ameritech's  amended
      complaint. For example, the figure specified in Ameritech's complaint does
      not  account  for (a) more than $5.2  million  in refunds  that  Ameritech
      contends it has already  credited to CoreComm  Newco's  accounts since the
      filing its complaint, and (b) payments that were made by CoreComm Newco in
      the ordinary course after the time of Ameritech's submission. However, the
      Company  cannot be certain  how or when the matter will be  resolved.  The
      Company also believes that, to the extent Ameritech  prevails with respect
      to any of its claims,  Ameritech's award may be offset in whole or in part
      by amounts that CoreComm Newco is seeking to obtain from  Ameritech  under
      its counterclaims.  However,  it is impossible at this time to predict the
      outcome of the litigation.


                                       19

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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


   Note 13. Commitments and Contingent Liabilities (continued)

   o  On December 3, 2001, General Electric Capital Corp. filed a lawsuit in the
      Circuit  Court of Cook  County,  Illinois  against  CoreComm  Limited  and
      MegsINet,   Inc.,  an  indirect   subsidiary   of  the  Company,   seeking
      approximately  $8 million in allegedly  past due amounts and the return of
      equipment under a capital  equipment  lease  agreement  between Ascend and
      MegsINet.  GECC is seeking all amounts  allegedly  owed under the lease as
      well  as  repossession  of  the  equipment.  On  February  19,  2002,  the
      defendants  filed a  motion  to  dismiss  several  of  GECC's  claims.  In
      response, GECC withdrew its original complaint and on May 1, 2002 filed an
      amended complaint naming the Company as an additional  defendant.  On June
      5, 2002,  defendants  filed a motion to dismiss  and/or  stay  plaintiff's
      complaint,  plaintiffs  filed a reply  and the  court  has  established  a
      schedule  for  additional  briefing  on the matter to be  followed by oral
      argument in late September  2002.  Concurrently,  on April 12, 2002,  GECC
      filed a second  complaint in the Circuit  Court of Cook  County,  Illinois
      against  MegsINet,  CoreComm Limited and the Company seeking a court order
      allowing it to take repossession of its alleged equipment. After a hearing
      on  the  matter  following  defendants'  opposition,   GECC  withdrew  its
      complaint and filed a new action on May 3, 2002.  Defendant's  response to
      dismiss  the May 3, 2002  complaint  was filed on May 29,  2002 asking the
      court to dismiss  plaintiff's  complaint and that matter remains  pending.
      Concurrently,  the parties have been directed to submit proposed  findings
      of fact and  conclusions of law on the claims  against  MegsINet by August
      23, 2002 with a decision to be rendered by the court by September 4, 2002.
      Defendants intend to defend themselves  vigorously against both complaints
      and to pursue all available claims and defenses. However, it is impossible
      at this time to predict the outcome of the litigation.

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

                                       20

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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


      Note 13. Commitments and Contingent Liabilities (continued)

   o  On March 1, 2002,  Easton Telecom  Services,  LLC.,  referred to as Easton
      LLC,  initiated  litigation  in the  Northern  District  of  Ohio  against
      CoreComm Internet Group, Inc. asserting that Easton LLC is the assignee of
      several rights of Easton  Telecom  Services,  Inc.,  referred to as Easton
      Inc., under an asset purchase agreement approved as part of the bankruptcy
      disposition of Teligent, Inc., and demanding payment of approximately $4.9
      million,  primarily in respect of alleged early termination penalties, for
      telecommunications  services  purportedly provided under alleged contracts
      between Easton and MegsINet, Inc. Subsequently,  on April 18, 2002, Easton
      filed an amended complaint in the  above-referenced  matter naming Voyager
      Information  Networks,  Inc. as an additional defendant and increasing the
      amount  in  dispute  to  approximately  $5.1  million.  On  May  7,  2002,
      defendants'  filed their  answer  denying  Easton  LLC's  allegations  and
      asserting multiple defenses,  including defenses  challenging the validity
      of the alleged contracts and plaintiffs claim to alleged damages.  On July
      8,  2002,  plaintiff  filed a  motion  for  partial  summary  judgment  on
      defendants'  claim  that  approximately  $4 million of the amount at issue
      constitutes an  unenforceable  penalty that must be dismissed by the court
      as a matter of law, and  defendants  filed an opposition to that motion on
      July 29,  2002.  Defendants  intend  to file a  cross-motion  for  summary
      judgment declaring that the $4 million penalty is void as a matter of law,
      and will defend themselves  vigorously and pursue all available claims and
      defenses. However, it is impossible at this time to predict the outcome of
      this litigation.

   o  On June 7, 2002, the Board of Revenue and Finance of the  Commonwealth  of
      Pennsylvania  issued an order  granting  in part and  denying  in part the
      Company's  petition  for  review of a decision  by a lower  administrative
      authority  relating to the Company's  alleged  liability for sales and use
      tax for the period  September 1, 1997  through July 31, 2000.  Pursuant to
      the June 7 order,  the Company has been assessed sales and use tax for the
      period at issue in the amount of  $631,429.  On July 8, 2002,  the Company
      filed a petition for review of the board's order in the Commonwealth Court
      of Pennsylvania seeking a further reduction of the assessment. The Company
      believes that it has meritorious  defenses and that the assessment  should
      be reduced,  however it is not possible to predict how this matter will be
      resolved.


                                       21

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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

Results of Operations

Until  December  2001,  we were a direct,  wholly-owned  subsidiary  of CoreComm
Limited. As a result of the recapitalization  transactions  completed as part of
the first phase of the ATX  Communications  recapitalization  in December  2001,
CoreComm Limited owned  approximately 13% of our outstanding  common stock until
June  30,  2002.  As  of  the   completion  of  the  second  phase  of  the  ATX
Communications  recapitalization  on July 1,  2002,  CoreComm  Limited  has been
merged  into  a  wholly-owned  subsidiary  of the  Company.  Prior  to  the  ATX
Communications  recapitalization,  CoreComm Limited operated the same businesses
that we currently operate.

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

In 2001,  we  streamlined  our strategy and  operations to focus on our two most
successful   and   promising   lines  of  business.   The  first  is  integrated
communications products and other high bandwidth/data/web-oriented  services for
the business market. The second is bundled local telephony and Internet products
for the residential market, with a focus on using Internet  interfaces,  as well
as our call centers,  to  efficiently  sell, to install our products and service
our customers. As a result of these changes, we are now focused primarily in the
Mid-Atlantic and Mid-West regions of the U.S.

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


                                       22

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

These  efficiencies are reflected in the decrease in our expenses of nearly $150
million on an annualized basis, as shown in the table below:



                                                                Three Months Ended
                                                                  (in thousands)
                                                            ---------------------------
                                            % Reduction     June 30,       December 31,
                                            Q4'00-Q2'02       2002             2000
                                            -----------       ----             ----

                                                                   
Operating Expenses                               25%        $ 48,758        $ 65,002
Selling, General and Administrative              47%          20,224          38,414
Corporate Expenses                               57%           1,616           3,759
                                                            ------------------------
    Total                                        34%        $ 70,598        $107,175
                                                            ========================



While reducing  expenses in all areas of our business,  we  implemented  new low
cost revenue  initiatives such as launching business  communications  service to
several  markets in the Great Lakes region and  residential  service in the East
using existing facilities.

In addition,  the recapitalization  transactions  completed in 2001 have reduced
interest expense and preferred stock dividends from an aggregate annual total of
approximately  $53.2 million to  approximately  $13.7 million,  $10.5 million of
which is in cash, based on interest rates as of June 30, 2002.

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

Although we continue to engage in efforts to increase our profitability,  we are
also investigating other ways to generate cash for our business.  In April 2001,
the  Company  and  CoreComm  Limited  commenced  a process to  potentially  sell
selected  assets and businesses (now owned by the Company) that are not directly
related  to their  competitive  local  exchange  carrier,  referred  to as CLEC,
business,  and retained  advisors for the purpose of conducting  this sale.  The
Company's  CLEC  assets  and  businesses  include  its  local  and  toll-related
telephone  services  that compete with the  incumbent  local  exchange  carrier,
referred to as ILEC, and other carriers.


Three Months Ended June 30, 2002 and 2001

The increase in revenues to  $75,209,000  from  $73,126,000  is due primarily to
customer acquisition,  increased pricing,  carrier access billing and reciprocal
compensation.  In the three months ended June 30, 2002,  the Company  billed and
recorded  approximately  $1,484,000  of revenue  that was  related  to  services
provided in prior periods.

Operating  costs  include  direct cost of sales,  network costs and salaries and
related expenses of network personnel.  Operating costs decreased to $48,758,000
from  $57,662,000  due to a decrease in costs as a result of optimization of our
network, reduced headcount and reduction of our facilities.

                                       23

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

Selling,  general and  administrative  expenses  decreased to  $20,224,000  from
$23,319,000  due to a  decrease  in  costs  as a result  of  reduced  headcount,
reduction of our facilities and a revision in our marketing  strategies.  During
the three months ended June 30, 2002 we revised our estimate of potential  sales
and  use  tax  based  on a  reassessment  in an  order  by the  Commonwealth  of
Pennsylvania,   which  had  the  effect  of   reducing   selling,   general  and
administrative expenses by approximately $800,000.

Corporate expenses include the costs of our officers and headquarters staff, the
costs of operating the  headquarters  and costs incurred for strategic  planning
and  evaluation  of business  opportunities.  Corporate  expenses  increased  to
$1,616,000 from $812,000 due to the costs of additional corporate activities and
increased compensation expense.

In  accordance  with APB  Opinion  No.  25,  "Accounting  for  Stock  Issued  to
Employees,"  in April  2000,  we  recorded  a non-cash  compensation  expense of
approximately  $29.0 million and a non-cash  deferred  expense of  approximately
$31.3 million. From April 1, 2001 to June 30, 2001, $3.2 million of the deferred
non-cash  compensation was charged to expense. The remaining portion of deferred
non-cash  compensation  was charged to expense between July 1, 2001 and December
31, 2001.

We incurred  additional costs,  which consist primarily of employee  incentives,
legal  fees,   accounting  fees  and  printing  fees,  in  connection  with  our
recapitalization of $4,270,000 during the three months ended June 30, 2002.

Other charges of $33,366,000 during the three months ended June 30, 2001, relate
to our announcements in May and July 2001 that we were taking additional actions
to reorganize,  re-size and reduce operating costs and create greater efficiency
in various areas of the Company.  These charges included employee  severance and
related costs for  approximately  630 employees as well as lease exit costs.  An
aggregate of $21,748,000 of these costs were for equipment and other assets that
did not require any future cash outlays.

Depreciation  expense  decreased to $9,140,000 from  $11,567,000  primarily as a
result of the reduction in the carrying value of our fixed assets as of December
31, 2001 as determined  by a fair value  analysis  performed in accordance  with
SFAS No.  121,  "Accounting  for the  Impairment  of  Long-Lived  Assets and for
Long-Lived Assets to be Disposed Of."

Amortization  expense decreased to $83,000 from $23,097,000 due to the reduction
in the  carrying  value of our  intangible  assets as of  December  31,  2001 as
determined by a fair value analysis performed in accordance with SFAS No. 121 as
well as our adoption of SFAS No. 142,  "Goodwill and Other Intangible Assets" on
January 1, 2002,  which required us to cease amortizing  goodwill.  Amortization
expense on our  goodwill  and  workforce  during the three months ended June 30,
2001 was $23,010,000. Our net loss and our basic and diluted net loss per common
share would have been $63,615,000 and $2.23, respectively, had SFAS No. 142 been
in effect for the first quarter of 2001.

Interest income and other,  net,  decreased to $100,000 from $656,000  primarily
due to the reduction of interest  income  resulting  from lower cash balances in
2002.

                                       24

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

Interest  expense  decreased to $3,737,000  from  $7,383,000  due primarily to a
reduction in the effective  interest rate on our senior secured credit facility.
The effective  interest rate on our senior secured  credit  facility at June 30,
2002 and June 30, 2001 was 6.75% and 9.29%, respectively.

The income tax benefit of $33,000 during 2001 is from state and local income tax
refunds.


Six Months Ended June 30, 2002 and 2001

The increase in revenues to $149,520,000  from  $145,937,000 is due primarily to
customer acquisition,  increased pricing,  carrier access billing and reciprocal
compensation.  In the six months  ended June 30,  2002,  the Company  billed and
recorded  approximately  $1,958,000  of revenue  that was  related  to  services
provided in prior periods.

Operating  costs  include  direct cost of sales,  network costs and salaries and
related expenses of network personnel.  Operating costs decreased to $96,796,000
from  $121,182,000 due to a decrease in costs as a result of optimization of our
network, reduced headcount and reduction of our facilities.

Selling,  general and  administrative  expenses  decreased to  $42,537,000  from
$54,114,000  due to a  decrease  in  costs  as a result  of  reduced  headcount,
reduction of our facilities and a revision in our marketing  strategies.  During
the six months ended June 30, 2002 we reduced our  estimate of  potential  sales
and  use  tax  based  on a  reassessment  in an  order  by the  Commonwealth  of
Pennsylvania,  which had the effect reducing selling, general and administrative
expenses by approximately $800,000.

Corporate expenses include the costs of our officers and headquarters staff, the
costs of operating the  headquarters  and costs incurred for strategic  planning
and  evaluation  of business  opportunities.  Corporate  expenses  increased  to
$3,314,000 from $2,910,000 due the costs of additional  corporate activities and
increased compensation expense.

In  accordance  with APB  Opinion  No.  25,  "Accounting  for  Stock  Issued  to
Employees,"  in April  2000,  we  recorded  a non-cash  compensation  expense of
approximately  $29.0 million and a non-cash  deferred  expense of  approximately
$31.3  million.  From  January  1, 2001 to June 30,  2001,  $6.5  million of the
deferred non-cash  compensation was charged to expense. The remaining portion of
deferred  non-cash  compensation  was  charged  to  expense  between  July 1 and
December 31, 2001.

We incurred  additional costs,  which consist primarily of employee  incentives,
legal  fees,   accounting  fees  and  printing  fees,  in  connection  with  our
recapitalization of $5,452,000 during 2002.

Other charges of $33,485,000  during the six months ended June 30, 2001,  relate
to our announcements in May and July 2001 that we were taking additional actions
to reorganize,  re-size and reduce operating costs and create greater efficiency
in various areas of the Company.  These charges included employee  severance and
related costs for  approximately  630 employees as well as


                                       25

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

lease exit costs.  An aggregate of $21,748,000 of these costs were for equipment
and other assets that did not require any future cash outlays.

Depreciation  expense  decreased to $18,021,000 from $23,579,000  primarily as a
result of the reduction in the carrying value of our fixed assets as of December
31, 2001 as determined  by a fair value  analysis  performed in accordance  with
SFAS No.  121,  "Accounting  for the  Impairment  of  Long-Lived  Assets and for
Long-Lived Assets to be Disposed Of."

Amortization expense decreased to $167,000 from $54,606,000 due to the reduction
in the  carrying  value of our  intangible  assets as of  December  31,  2001 as
determined by a fair value analysis performed in accordance with SFAS No. 121 as
well as our adoption of SFAS No. 142,  "Goodwill and Other Intangible Assets" on
January 1, 2002,  which required us to cease amortizing  goodwill.  Amortization
expense on our goodwill and workforce  during the six months ended June 30, 2001
was  $54,411,000.  Our net loss and our basic and  diluted  net loss per  common
share would have been  $273,766,000  and $9.59,  respectively,  had SFAS No. 142
been in effect for the first quarter of 2001.

Interest income and other, net, decreased to $234,000 from $1,320,000  primarily
due to the reduction of interest  income  resulting  from lower cash balances in
2002.

Interest  expense  decreased to $7,640,000  from  $11,524,000 due primarily to a
reduction in the effective  interest rate on our senior secured credit facility.
The effective  interest rate on our senior secured  credit  facility at June 30,
2002 and 2001 was 6.75% and 9.29%, respectively.

The income tax benefit of $33,000 during 2001 is from state and local income tax
refunds.


Recent Accounting Pronouncements

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

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

In June 2001,  the FASB issued SFAS No. 141,  "Business  Combinations,"  and No.
142,  "Goodwill  and Other  Intangible  Assets."  SFAS No. 141 requires that the
purchase  method of accounting be used for all business  combinations  initiated
after  June  30,  2001.  Use of the  pooling-of-interests  method  is no  longer
permitted.  SFAS No. 141 also includes  guidance on the initial  recognition and
measurement  of  goodwill  and other  intangible  assets  acquired in a business
combination  that is  completed  after  June 30,  2001.  SFAS  No.  142 ends the

                                       26

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

amortization of goodwill and indefinite-lived  intangible assets. Instead, these
assets must be reviewed annually, or more frequently under some conditions,  for
impairment in accordance with this  statement.  This impairment test uses a fair
value  approach  rather  than the  undiscounted  cash flow  approach  previously
required by SFAS No. 121,  "Accounting  for the Impairment of Long-Lived  Assets
and for Long-Lived Assets to Be Disposed Of." We adopted SFAS No. 142 on January
1, 2002.  The  adoption of this new standard  had no  significant  effect on our
results of operations, financial conditions or cash flows.


                                       27

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

Liquidity and Capital Resources

Based on our current  business plan, we anticipate  that we will have sufficient
cash and cash equivalents on hand to fund our operations,  capital  expenditures
and debt service in 2002. By the end of the 2002, we anticipate  that we will be
generating  enough  cash  from our  operations,  which  is net of cash  interest
expense,  to fund our anticipated capital  expenditures.  However, we anticipate
that we and our subsidiaries  will not generate  sufficient cash from operations
to  repay  at  maturity  the  entire   principal   amount  of  our   outstanding
indebtedness.  We intend to repay these  amounts  through  refinancings  of this
debt,  or through  other  sources of  financing.  However,  our ability to raise
additional capital in the future will be dependent on a number of factors,  such
as our results of operations,  the amount of our indebtedness,  and also general
economic and market conditions,  which are beyond our control.  If we are unable
to obtain  additional  financing or to obtain it on favorable  terms,  we may be
required  to  further  reduce  our  operations,   forego   attractive   business
opportunities,  or take other actions which could adversely affect our business,
results of operations  and  financial  condition.  In addition,  as described in
detail in Note 13 above,  the  Company  and its  various  subsidiaries  are also
involved in  litigation  which,  if  resolved  unfavorably  to us,  could have a
material  adverse  effect on the  Company's  business,  financial  condition and
results of operations, including our ability to fund our operations.

As of June 30, 2002, we had long-term  debt,  which consists of a $156.1 million
senior secured credit facility, approximately $17 million in principal amount of
10.75% Unsecured  Convertible PIK Notes due 2011, and approximately $9.6 million
of capital leases.  Debt service on the senior secured credit facility  includes
approximately  $10.5  million in  interest  expense in each of 2002 and 2003 and
$10.2 million in 2004, on an annualized basis, based on the interest rates as of
June 30, 2002, as well as quarterly  amortization and principal reductions which
total $0 in 2002,  $1,950,000  in 2003,  and  $9,750,000  in 2004.  We have made
interest  payments of  approximately  $5.4 million for our senior secured credit
facility  during  the six  months  ended June 30,  2002.  The  10.75%  Unsecured
Convertible PIK Notes due 2011 have no cash interest  payments,  and are not due
until 2011.  Our capital  leases have $9.4  million due during the  remainder of
2002,  and  $0.2  million  due  for  the  remainder  of  their  terms.  However,
approximately  $8.1  million  of these  capital  leases are  obligations  of our
subsidiary,  MegsINet,  Inc. and are not  obligations of the Company.  MegsINet,
Inc. is currently in  settlement  discussions  with some of the holders of these
leases. In addition,  as of June 30, 2002, CoreComm Limited had $4.75 million of
6% Convertible Subordinated Notes outstanding.  As of June 30, 2002, our current
liabilities exceed our current assets by approximately $93 million.

We  still  have  significant   expected  capital  expenditures  even  after  the
implementation  of our modified  business plan. Under our revised business plan,
capital  expenditures have been significantly  reduced from prior levels.  Total
actual capital expenditures for the six months ended June 30, 2002, described as
cash  used  to  purchase  fixed  assets  in  our  cash  flow   statement,   were
approximately $5.4 million. According to our current plans, capital expenditures
are expected to be approximately $4.4 million for the remainder of 2002 and $9.5
million and $14.2 million in 2003 and 2004,  respectively.  These future capital
expenditures  will depend on a number of factors  relating to our  business,  in
particular the growth level,  geographic  location and services  provided to new
customers  added during these years.  Capital  expenditures in future


                                       28

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

years will also depend on the availability of capital and the amount of cash, if
any, generated by operations, which may impact our capital decisions relating to
initiatives such as, for example,  network  expansion and the  implementation of
upgrades to our information services platforms.

For the  first  six  months  of  2002,  net  cash  provided  by  operations  was
approximately $1.1 million.  Continued execution of our business plan, including
revenue growth in more profitable  areas and continued  expense  reduction,  are
expected to continue to improve our financial results.  An inability to generate
cash from operations and/or raise additional financing may effect our ability to
meet  our cash  requirements,  which  may  have an  adverse  affect  on us,  and
potentially our viability as an ongoing business.

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

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


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

      (b) we will  prevail in our  material  litigation  matters as described in
      Note 13 to the financial statements

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

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

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

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

      (g) we will be able to access the cash flow of our subsidiaries;

We anticipate  that we and our  subsidiaries  will not generate  sufficient cash
flow from  operations  to repay at maturity the entire  principal  amount of our
outstanding indebtedness.  Accordingly,  we may be required to consider a number
of measures,  including:  (1) refinancing all or a portion of this indebtedness,
(2)  seeking  modifications  to the  terms  of this  indebtedness,  (3)  seeking
additional debt financing,  which may be subject to obtaining  necessary  lender
consents,  (4) seeking additional equity financing,  or (5) a combination of the
foregoing. We are currently in


                                       29

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

compliance  with all  required  ratios and  covenants  contained  in  agreements
governing our outstanding indebtedness.

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



                                         Six Months
                                            Ended
                                         December 31,
                                             2002         2003      2004            Source of Funds
                                          ------------------------------------------------------------------
                                                   (in millions)
                                                         
   Cash Interest Expense on
     existing Long-term debt(1)             $   5.4     $   10.5  $   10.2   Cash and cash equivalents on
                                                                             hand and cash from operations
   Estimated Capital
     Expenditures(2)                            4.4          9.5      14.2   Cash and cash equivalents on
                                                                             hand and cash from operations
   Principal Payments on existing
     Long-term debt(3)                         4.4          1.95      9.75   For 2002 and 2003, cash and
                                                                             cash equivalents on hand and
                                                                             cash from operations;
                                                                             for 2004, cash and cash
                                                                             equivalents on hand, cash from
                                                                             operations, and, if required,
                                                                             refinancing sources or other
                                                                             sources of financing(4).
   Payments on Capital Leases                   9.4          0.25       --   Approximately $8.1 million of
                                                                             these capital leases are
                                                                             obligations of our subsidiary,
                                                                             MegsINet, Inc. and are not
                                                                             obligations of the Company.
                                                                             MegsINet, Inc. is currently in
                                                                             settlement discussions with the
                                                                             holders of these leases(5);
                                                                             for the remaining amounts, cash
                                                                             and cash equivalents on hand
                                                                             and cash from operations
                                            -------     --------  --------
                                            $  23.6     $  22.20  $  34.15
                                            =======     ========  ========

(1) The only long term debt of ours that requires  cash interest  expense is our
    $156.1  million   senior  secured  credit   facility  and  $4.4  million  6%
    Convertible  Subordinated Notes of CoreComm Limited. The interest expense on
    our senior secured credit facility is based on our current  interest rate of
    6.75%,  which is in effect through  October 12, 2002, and assumes  principal
    reductions as required in the facility.

(2) Future capital  expenditures  will depend on a number of factors relating to
    our  business,  in  particular  the growth  level,  geographic  location and
    services provided to new customers added during these years.

(3) Principal payments indicated are amortization and principal reductions under
    our senior  secured  credit  facility.  Also includes the  outstanding  $4.4
    million 6%  Convertible  Subordinated  Notes due 2006 of  CoreComm  Limited;
    CoreComm Limited is in default on such notes.

                                       30

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

(4) Refinancing  sources may include,  for example,  a new bank facility used to
    repay these amounts;  other sources of financing may include  capital raised
    through  new debt or  equity  financing  or  asset  sales.  There  can be no
    assurance  that we will be able to refinance our  indebtedness  or raise the
    required funds.

(5) Approximately  $8 million of the capital lease and other debt obligations of
    MegsINet,  Inc. are the subject of current  litigation,  as described in the
    section of Part II, Item I of this Quarterly  Report on Form 10-Q entitled "
    Legal Proceedings."



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

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

In April  2001,  CoreComm  Limited  entered  into a $156.1  million  Amended and
Restated Credit Agreement with The Chase Manhattan Bank that amends and restates
the term loan  facility and revolving  credit  facility that closed in September
2000. As of June 30, 2002,  there is $106.1 million  outstanding  under the term
loan facility and $50.0 million outstanding under the revolving credit facility.
The term loan  facility  will  amortize in quarterly  installments  of principal
commencing on December 31, 2003 with a final maturity on September 22, 2008. The
revolving  credit facility shall be  automatically  and  permanently  reduced in
increasing  quarterly  installments of principal commencing on December 31, 2003
with a termination date on September 22, 2008.  Total annual principal  payments
are as  follows:  $1,950,000  (2003);  $9,750,000  (2004);  $25,350,000  (2005);
$50,700,000 (2006); $39,000,000 (2007) and $29,350,000 (2008). In the event that
any of the  remaining  approximately  $4.358  million in principal  amount of 6%
Convertible  Subordinated  Notes  not  owned by us have not  been  converted  or
refinanced on or prior to April 1, 2006,  then the facilities  become payable in
full on April 1, 2006.  The interest rate on both the term loan facility and the
revolving credit facility is, at our option, either 3.5% per annum plus the base
rate,  which is the higher of the prime rate or the federal funds effective rate
plus 0.5% per annum, or the reserve-adjusted  London Interbank Offered Rate plus
4.5% per annum.  Beginning  October  12,  2001 and ending  April 12,  2002,  the
interest rate was 6.86%.  Beginning  April 13, 2002 and ending October 12, 2002,
the interest rate is 6.75%.  Interest is payable  monthly on the  facility.  The
commitment  fee on the  unused  portion  of the  commitments  is 1.25% per annum
payable  quarterly,  subject to  reduction to 1% per annum based upon the amount
borrowed under the facilities.


                                       31

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

In April 2001, we and CoreComm Limited issued, as joint and several obligors, to
NTL  Incorporated a convertible  note in the aggregate  principal  amount of $15
million.  This note will  mature in April  2011.  Interest  on the note is at an
annual rate of 10.75%  payable  semiannually  on October 15 and April 15 of each
year,  commencing  October  15,  2001.  The  interest  is payable in kind by the
issuance of additional unsecured  convertible notes in principal amount equal to
the interest  payment that is then due.  Additional  unsecured  convertible  PIK
notes,  dated October 15, 2001,  and April 15, 2002 were issued in the principal
amount  of  approximately   $0.8  million,   and  approximately   $0.9  million,
respectively,  as interest  payments.  The additional  notes issued for interest
will have an initial  conversion price equal to the greater of $1.00 and 120% of
the  weighted  average  closing  price of CoreComm  Limited  common  stock for a
specified period.  The April 2001 note, the October 2001 note and the April 2002
note are each  convertible  into CoreComm Limited common stock prior to maturity
at a conversion  price of $1.00 per share,  subject to  adjustment.  Pursuant to
letter agreements between us, NTL and CoreComm Limited, at the completion of the
exchange offers on July 1, 2002, the  convertibility  feature of these notes was
altered so that rather than the notes being  convertible into shares of CoreComm
Limited common stock,  they are convertible  into shares of our common stock. At
that time,  the  conversion  prices of these  notes was  equitably  adjusted  by
applying the exchange  ratio in the exchange  offer for CoreComm  Limited common
stock, which results in a new conversion price of $38.90 per share of our common
stock for each of these notes. These notes are redeemable,  in whole or in part,
at our  option,  at any time after  April 12,  2003,  at a  redemption  price of
103.429%  that  declines  annually to 100% in April 2007,  in each case together
with accrued and unpaid interest to the redemption date.

In October 1999,  CoreComm  Limited issued $175 million  principal  amount of 6%
Convertible  Subordinated Notes, and received net proceeds of $168.5 million. In
April 2001,  $10,250,000 aggregate principal amount of these notes was converted
into approximately 374,000 shares of CoreComm Limited's common stock. As part of
the ATX  Communications  recapitalization,  on December 17,  2001,  $160 million
principal  amount of the 6%  Convertible  Subordinated  Notes were exchanged for
1,456,806  common shares of our common stock and the payment of the October 2001
interest  payment of  approximately  $4.8 million.  The exchange  offer that was
launched February 2002 for the 6% Convertible Subordinated Notes was an offer to
exchange the remaining  $4.75  million  principal  amount of the 6%  Convertible
Subordinated  Notes not  owned by us for an  aggregate  amount of  approximately
43,248  shares  of our  common  stock and  $142,500  in cash.  On July 1,  2002,
$392,000  principal  amount  of  the  6%  Convertible  Subordinated  Notes  were
exchanged  for  3,569  shares  of  our  common  stock  and  a  cash  payment  of
approximately $12,000 representing the past-due interest payment that was due on
the  notes  on  April  1,  2002.  The  April 1,  2002  interest  payment  on the
outstanding  6%  Convertible  Subordinated  Notes has not been paid and CoreComm
Limited is in default under the thesenotes.

On August 13, 2002, the Company issued a demand to Worldcom, Inc. for payment of
approximately $8.1 million,  representing approximately $5.4 million in deposits
for services and  approximately  $2.7 million in carrier access billing  charges
owed. On July 11, 2002,  Worldcom filed a voluntary  petition for reorganization
under  Chapter 11 of the U.S.  Bankruptcy  Code.  We do not  believe  Worldcom's
bankruptcy  filing will  materially  impact our ability to conduct our  business
operations.


                                       32

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

ATX Communications Recapitalization

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

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

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

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

On February 8, 2002, we launched  registered  public  exchange offers whereby we
offered to  exchange  our  shares of common  stock to all  holders  of  CoreComm
Limited common stock and all remaining  holders of 6%  Convertible  Subordinated
Notes due 2006 of CoreComm  Limited for their CoreComm  Limited common stock and
their  notes,  respectively.  An  additional  $392,000  principal  amount  of 6%
Convertible  Subordinated Notes were exchanged.  We completed the exchange offer
on July 1,  2002,  and  issued  3,610,624  shares of common  stock to the former
holders  of  CoreComm  Limited  common  stock  and  holders  of  6%  Convertible
Subordinated  Notes due 2006 of CoreComm Limited.  Following the exchange offer,
the Company  transferred  the shares of CoreComm  Limited  common  stock that we
received in the exchange offer to a wholly-owned subsidiary. We then merged this
subsidiary into CoreComm Limited,  with CoreComm Limited surviving the merger as
a wholly-owned subsidiary of us.

Contractual Obligations and Commercial Commitments

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


                                       33

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

The  following  table  includes  aggregate  information  about  our  contractual
obligations as of June 30, 2002 and the periods in which payments are due:



                                                                     Payments Due by Period
                                          ------------------------------------------------------------------------
Contractual                                               Less than 1        1-3            4-5           After 5
Obligations                                Total             Year           Years          Years           Years
-----------                               ------------------------------------------------------------------------
                                                                       (in thousands)
                                                                                           
Long-Term Debt (1)                        $177,501        $  4,358        $ 19,500        $ 87,750        $ 65,893
Capital Lease Obligations                    9,642           9,398             244              --              --
Operating Leases                            29,013           7,343          10,232           8,017           3,421
Unconditional Purchase Obligations            None              --              --              --              --
Other Long-Term Obligations                   None              --              --              --              --
                                          ------------------------------------------------------------------------
Total Contractual Cash Obligations        $216,156        $ 21,099        $ 29,976        $ 95,767        $ 69,314
                                          ========================================================================


__________

(1) Long-term debt includes the senior secured credit facility of  $156,100,000,
    10.75% Unsecured Convertible PIK Notes due April 2011 of $17,043,000, which,
    including  accrued  PIK  interest  and  CoreComm  Limited's  6%  Convertible
    Subordinated Notes due 2006 of $4,358,000.



The  following  table  includes  aggregate   information  about  our  commercial
commitments  as of June 30,  2002 and the  periods  in which  payments  are due.
Commercial  commitments  are  items  that we  could be  obligated  to pay in the
future. They are not required to be included in the consolidated balance sheet.



                                                               Amount of Commitment
                                                              Expiration Per Period
                                        ----------------------------------------------------------------
                                          Total
Other Commercial                         Amounts    Less  than 1      1 - 3         4 - 5        Over 5
Commitments                             Committed       Year          Years         Years         Years
                                        ----------------------------------------------------------------
                                                                 (in thousands)
                                                                                    
Guarantees                              $ None          $   --          $ --          $ --          $  --
Lines of Credit                           None              --            --            --             --
Standby Letters of Credit                 None              --            --            --             --
Standby Repurchase Obligations            None              --            --            --             --
Other Commercial Commitments             6,844           6,844            --            --             --
                                        ------------------------------------------------------------------
Total Commercial Commitments            $6,844          $6,844          $ --          $ --          $  --
                                        ==================================================================


Consolidated Statement of Cash Flows

For the six months ended June 30, 2002,  cash  provided by operating  activities
was $1,126,000 in comparison to cash used in operating activities of $25,382,000
for the six months ended June 30, 2001. The change in cash flow is primarily due
to the implementation of our revised business plan.

For the six months  ended June 30,  2002,  cash used to  purchase  fixed  assets
decreased to $5,448,000  from  $6,192,000 in the six months ended June 30, 2001,
which reflects decreased purchases of operating equipment.

Proceeds from  borrowings,  net of financing  costs, of $63,679,000 was from the
borrowings  under the senior secured  credit  facility in January 2001 and April
2001.

                                       34

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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

Certain statements  contained herein,  specifically  excluding references to the
exchange offers, constitute "forward-looking statements" as that term is defined
under the Private  Securities  Litigation  Reform Act of 1995. When used herein,
the words,  "believe,"  "anticipate,"  "plan," "will,"  "expects,"  "estimates,"
"projects,"  "positioned,"  "strategy,"  and similar  expressions  identify such
forward-looking  statements.  All  references  in this Safe Harbor legend to the
Company shall be deemed to include ATX  Communications  and its subsidiaries and
affiliates.  Such  forward-looking  statements  involve known and unknown risks,
uncertainties  and other factors that may cause the actual results,  performance
or achievements of the Company, or industry results, to be materially  different
from those contemplated,  projected,  forecasted, estimated or budgeted, whether
expressed or implied, by such forward-looking  statements.  Such factors include
the following:  the Company's ability to obtain trade credit shipments and terms
with vendors and service providers for current orders;  the Company's ability to
maintain  contracts  that are  critical  to its  operations;  potential  adverse
developments  with respect to the Company's  liquidity or results of operations;
adverse developments in commercial disputes or legal proceedings,  including the
pending any future  litigation with Verizon;  the Company's  ability to fund and
execute  its  business  plan;  the  Company's  ability  to  attract,  retain and
compensate key executives  and employees;  the Company's  ability to attract and
retain customers; the potential delisting of the Company's common stock from the
Nasdaq  National  Market;  general  economic and business  conditions;  industry
trends; technological developments;  the Company's ability to continue to design
and build its  network,  install  facilities,  obtain and  maintain any required
governmental licenses or approvals and finance construction and development, all
in  a  timely  manner,  at  reasonable  costs  and  on  satisfactory  terms  and
conditions;  assumptions about customer acceptance,  churn rates, overall market
penetration and competition from providers of alternative  services;  the impact
of  restructuring   and  integration   actions;   the  impact  of  new  business
opportunities   requiring   significant  up-front   investment;   interest  rate
fluctuations;  and  availability,  terms and deployment of capital.  The Company
assumes no obligation to update the forward-looking  statements contained herein
to  reflect  actual  results,  changes  in  assumptions  or  changes  in factors
affecting such statements.


                                       35

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

ITEM 3.   Quantitative and Qualitative Disclosure About Market Risk

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

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

                            Interest Rate Sensitivity
                               As of June 30, 2002

                      Principal Amount by Expected Maturity
                              Average Interest Rate



                             July 1,
                             2002 to      For the Years Ending December 31,
                           December 31, ------------------------------------                          Fair Value
                              2002      2003      2004       2005       2006    Thereafter    Total     6/30/02
                           ---------------------------------------------------------------------------------------
                                                             (in thousands)
                                                                                 
Long-term debt,
  including current
  portion:
Fixed rate                    $4,358       $--       $--       $--        $--    $47,525(a)  $51,883     $21,401

Average interest rate          6.00%                                              10.75%
Variable rate                  $ --     $1,950    $9,750   $25,350    $50,700    $68,350    $156,100    $156,100

Average interest rate                 Libor +    Libor +     Libor +    Libor  +   Libor +
                                      4.5% or    4.5% or     4.5% or    4.5% or    4.5% or
                                      base rate  base rate   base rate  base rate  base rate
                                      + 3.5%     + 3.5%      + 3.5%     + 3.5%     + 3.5%


(a) Represents the value at maturity of 10.75% Unsecured Convertible PIK Notes due April 2011.




                                       36

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Company  and/or its various  subsidiaries  is involved in various  disputes,
arising in the ordinary  course of its business,  which may result in pending or
threatened  litigation.  The Company  and/or its various  subsidiaries  are also
involved in the following litigation which, if resolved unfavorably to us, could
have a material adverse effect on the Company's  business,  financial  condition
and/or results of operations:

   o  The  Company  has  received  correspondence  dated  July  23,  2002,  from
      Verizon's  operating  subsidiary in Pennsylvania  alleging that Verizon is
      owed a total of  approximately  $12.6  million for  products  and services
      allegedly  purchased in that state and  threatening  to implement  account
      embargo and service suspension procedures if payment of the alleged amount
      is not received by August 23,  2002.  The July 23 letter also alleges that
      Verizon  has the right to  request a  security  deposit  under  applicable
      contracts and tariffs and demands  payment of such a deposit in the amount
      of   $5,650,000   by  July  30,  2002.   The  Company  has  also  received
      correspondence  dated July 23, 2002 from Verizon's operating subsidiary in
      New Jersey  alleging  the right to demand a security  deposit for products
      and services purchased in that state and demanding payment of a deposit of
      $2,700,000 by July 30, 2002.  On August 1, 2002,  the Company sent Verizon
      formal   written  notice  of  its  intent  to  pursue  the  collection  of
      approximately $5 million in credits  associated with disputed charges that
      the Company has withheld  from payment as improperly  billed.  On or about
      August 1, 2002, while the Company was  investigating  the claims set forth
      in Verizon's letters of July 23, the Company received  correspondence from
      Verizon's operating  subsidiaries in New Jersey and Pennsylvania  alleging
      that the Company had failed to pay  undisputed  amounts on a timely  basis
      and the security  deposits as requested,  and stating that Verizon intends
      to terminate its agreements with the Company and discontinue the provision
      of services  and  products in those  states  after  August 31,  2002.  The
      Company is reviewing  Verizon's  claims  concerning the amounts  allegedly
      owed in  Pennsylvania  and  intends  to pay all  undisputed  charges on or
      before the  August 23  embargo  deadline.  The  Company is also  reviewing
      Verizon's demands for a security deposit and termination threats, but upon
      preliminary  investigation the Company believes that Verizon does not have
      the right to make the deposit demands and termination threats set forth in
      its letters.  The Company  intends to pursue all remedies  available to it
      and defend itself  vigorously.  However,  it is not presently  possible to
      predict how these matters will be resolved.

      On August 13, 2002,  Verizon and several of its other subsidiaries filed a
      complaint in the United States District Court for the District of Delaware
      against the Company and several of its indirect wholly owned  subsidiaries
      seeking  payment of  approximately  $37 million  allegedly owed to Verizon
      under  various   contracts   between  Verizon  and  the  Company  and  its
      subsidiaries  and under state and federal  law.  While the Company has not
      yet fully assessed Verizon's  complaint,  the Company believes that it has
      meritorious defenses to the complaint,  and further, that the amounts owed
      are substantially less than the amount claimed by Verizon. For example, we
      believe the figure specified in the complaint


                                       37

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

      includes significant amounts of disputes for which Verizon owes credits to
      the  Company,  as well as  payments  that were made by the  Company in the
      ordinary  course of business.  The Company  intends to pursue all remedies
      available to it and defend itself vigorously.  However, the Company cannot
      be certain  how or when the matter  will be resolved or the outcome of the
      litigation.

      On March 7, 2002, CoreComm  Massachusetts,  Inc., an indirect wholly-owned
      subsidiary of the Company initiated litigation against Verizon New England
      d/b/a Verizon Massachusetts in the Suffolk Superior Court,  Massachusetts,
      alleging breach of contract and seeking a temporary  restraining  order to
      prevent  Verizon  Massachusetts  from suspending  CoreComm  Massachusetts'
      ability to order new  products  and  services  for  failure to pay various
      amounts  allegedly owed under the parties'  interconnection  agreement and
      Verizon's  tariffs in that  state.  On March 13,  2002,  the court  denied
      CoreComm's request for a temporary restraining order and Verizon proceeded
      to implement the threatened  service  embargo.  On April 1, 2002,  Verizon
      filed its answer to CoreComm's  complaint and filed counterclaims  seeking
      payment  of  approximately   $1.2  million   allegedly  owed  by  CoreComm
      Massachusetts under the agreement and tariffs. On April 10, 2002, CoreComm
      Massachusetts  filed an answer denying  Verizon's  claims. On or about May
      20, 2002,  Verizon served CoreComm  Massachusetts  with motion for summary
      judgment in an effort to secure payment without further litigation.  On or
      about June 10, 2002,  CoreComm  Massachusetts  submitted its opposition to
      Verizon's motion for summary judgment asserting various defenses including
      that the amount being sought by Verizon includes  hundreds of thousands of
      dollars of charges that are not  attributable to the Company.  The parties
      are  currently  waiting  for the  court  to rule  on the  pending  summary
      judgment motion.  CoreComm  Massachusetts believes that it will prevail on
      its opposition to Verizon's motion for summary  judgment,  and the company
      intends to pursue all available  claims and defenses.  However,  it is not
      presently  possible to predict how these  matters  will be  resolved.  The
      Company does not believe that the service embargo affecting its subsidiary
      in  Massachusetts  will have a material  adverse  affect on the  Company's
      business, financial condition and/or results of operations.


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

                                       38

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

      On July 5, 2001,  Ameritech  filed a claim with the PUCO  seeking  payment
      from CoreComm Newco of approximately  $8,600,000  allegedly owed under the
      contract.  On August  8,  2001,  Ameritech  filed a second  claim  against
      CoreComm  Newco in Ohio state court,  seeking an additional  approximately
      $4,300,000 in allegedly  improperly  withheld amounts. On August 28, 2001,
      CoreComm Newco  exercised its right to remove the state court claim to the
      United States District

      Court for the Northern  District of Ohio, and the parties then  stipulated
      to a  consolidation  of both of  Ameritech's  claims in the United  States
      District  Court.  To  consolidate  the two  claims,  on  October  9, 2001,
      Ameritech filed an amended  complaint in the United States District Court,
      seeking a total of approximately $14,400,000.

      On December  26,  2001,  CoreComm  Newco  filed its answer to  Ameritech's
      amended complaint and  simultaneously  filed three  counterclaims  against
      Ameritech  and  some  of its  affiliates,  alleging  breach  of  contract,
      antitrust violations,  and fraudulent or negligent  misrepresentation.  In
      lieu of  filing an answer to  CoreComm  Newco's  counterclaims,  Ameritech
      filed a series of motions on March 25,  2002,  asking the Court to dismiss
      several of CoreComm  Newco's  counterclaims.  On April 17, 2002,  CoreComm
      Newco filed its opposition to  Ameritech's  requests for dismissal On July
      25, 2002, the district court issued a decision denying  Ameritech's motion
      to dismiss  and  upholding  CoreComm  Newco's  right to  proceed  with its
      antitrust and misrepresentation claims against all counter-defendants.

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

   o  On December 3, 2001, General Electric Capital Corp. filed a lawsuit in the
      Circuit  Court of Cook  County,  Illinois  against  CoreComm  Limited  and
      MegsINet,   Inc.,  an  indirect   subsidiary   of  the  Company,   seeking
      approximately  $8 million in allegedly  past due amounts and the return of
      equipment under a capital  equipment  lease  agreement  between Ascend and
      MegsINet.  GECC is seeking all amounts  allegedly  owed under the lease as
      well  as  repossession  of  the  equipment.  On  February  19,  2002,  the
      defendants  filed a  motion  to  dismiss  several  of  GECC's  claims.  In
      response, GECC withdrew its original complaint and on May 1, 2002 filed an
      amended complaint naming the Company as an additional  defendant.  On June
      5, 2002,  defendants  filed a motion to dismiss  and/or  stay  plaintiff's
      complaint,  plaintiffs  filed a reply  and the  court  has  established  a
      schedule  for



                                       39

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

      additional  briefing on the matter to be followed by oral argument in late
      September  2002.  Concurrently,  on April 12,  2002,  GECC  filed a second
      complaint in the Circuit Court of Cook County,  Illinois against MegsINet,
      CoreComm Limited and the Company seeking a court order allowing it to take
      repossession  of its  alleged  equipment.  After a hearing  on the  matter
      following defendants' opposition,  GECC withdrew its complaint and filed a
      new action on May 3, 2002. Defendant's response to dismiss the May 3, 2002
      complaint  was  filed  on  May  29,  2002  asking  the  court  to  dismiss
      plaintiff's complaint and that matter remains pending.  Concurrently,  the
      parties  have  been  directed  to  submit  proposed  findings  of fact and
      conclusions of law on the claims against  MegsINet by August 23, 2002 with
      a decision to be rendered by the court by  September  4, 2002.  Defendants
      intend to defend  themselves  vigorously  against both  complaints  and to
      pursue all  available  claims and defenses.  However,  it is impossible at
      this time to predict the outcome of the litigation.

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

   o  On March 1, 2002,  Easton Telecom  Services,  LLC.,  referred to as Easton
      LLC,  initiated  litigation  in the  Northern  District  of  Ohio  against
      CoreComm Internet Group, Inc. asserting that Easton LLC is the assignee of
      several rights of Easton  Telecom  Services,  Inc.,  referred to as Easton
      Inc., under an asset purchase agreement approved as part of the bankruptcy
      disposition of Teligent, Inc., and demanding payment of approximately $5.1
      million,  primarily in respect of alleged early termination penalties, for
      telecommunications  services  purportedly provided under alleged contracts
      between Easton and MegsINet, Inc. Subsequently,  on April 18, 2002, Easton
      filed an amended complaint in the  above-referenced  matter naming Voyager
      Information  Networks,  Inc. as an additional defendant and increasing the
      amount  in  dispute  to  approximately  $5.1  million.  On  May  7,  2002,
      defendants'  filed their  answer  denying  Easton  LLC's  allegations  and
      asserting multiple defenses,  including defenses  challenging the validity
      of the alleged contracts and plaintiffs claim to alleged damages,  On July
      8,  2002,  plaintiff  filed a  motion  for  partial  summary  judgment  on
      defendants'  claim  that  approximately  $4 million of the amount at issue
      constitutes an  unenforceable  penalty that must be dismissed by the court
      as a matter of law, and  Defendants  filed an opposition to that motion on
      July 29,  2002.  Defendants  intend  to file a  cross-motion  for  summary
      judgment declaring that the


                                       40

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

      $4 million penalty is void as a matter of law, and will defend  themselves
      vigorously and pursue all available  claims and defenses.  However,  it is
      impossible at this time to predict the outcome of this litigation.

   o  On June 7, 2002, the Board of Revenue and Finance of the  Commonwealth  of
      Pennsylvania  issued an order  granting  in part and  denying  in part the
      Company's  petition  for  review of a decision  by a lower  administrative
      authority  relating to the Company's  alleged  liability for sales and use
      tax for the period  September 1, 1997  through July 31, 2000.  Pursuant to
      the June 7 order,  the Company has been assessed sales and use tax for the
      period at issue in the amount of  $631,429.  On July 8, 2002,  the Company
      filed a petition for review of the board's order in the Commonwealth Court
      of Pennsylvania seeking a further reduction of the assessment. The Company
      believes that it has meritorious  defenses and that the assessment  should
      be reduced or  eliminated,  however it is not possible to predict how this
      matter will be resolved.

   o  On August 13,  2002,  the Company  issued a demand to  Worldcom,  Inc. for
      payment of approximately  $8.1 million,  representing  approximately  $5.4
      million in deposits for services and approximately $2.7 million in carrier
      access billing charges owed. On July 11, 2002,  Worldcom filed a voluntary
      petition for reorganization  under Chapter 11 of the U.S. Bankruptcy Code.
      We do not believe Worldcom's  bankruptcy filing will materially impact our
      ability to conduct our business operations.

                                       41

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

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

      At a special  stockholder  meeting held on July 11, 2002, the stockholders
      of the Company unanimously approved a change of the name of the Registrant
      from "CoreComm Holdco, Inc." to "ATX Communications, Inc." The name change
      was made effective on July 15, 2002.


ITEM 5.   OTHER INFORMATION

   (a)In connection  with the ATX  Communications  recapitalization,  on July 2,
      2002, Nasdaq transferred CoreComm Limited's listing on The Nasdaq National
      Market to the Company.  On May 16, 2002,  Nasdaq provided CoreComm Limited
      with  notice of a Nasdaq  Staff  Determination  indicating  that  CoreComm
      Limited  common  stock was subject to delisting  from the Nasdaq  National
      Market because  CoreComm Limited did not comply with the minimum bid price
      and the minimum  market  value of publicly  held shares  requirements  for
      continued  listing.  On June 28,  2002, a hearing was held before a Nasdaq
      Listing Qualifications Panel to review the Nasdaq Staff Determination. The
      Panel has not yet  issued  its  opinion.  Under  Nasdaq  rules,  pending a
      decision by the Panel,  the Company's  common stock will continue to trade
      on the Nasdaq National  Market.  We cannot assure you that we will be able
      to maintain the Nasdaq  National  Market  listing for shares of our common
      stock. If our common stock is delisted from the Nasdaq National Market, it
      could, among other things,  have a negative impact on the trading activity
      and price of the common stock and could make it more  difficult  for us to
      raise equity  capital in the future.  If our common stock is delisted from
      the Nasdaq  National  Market,  the shares will likely begin trading on the
      Over-the-Counter Bulletin Board

   (b)On July 31, 2002, we entered into  definitive  employment  agreements with
      Thomas J. Gravina,  our President and Chief Executive  Officer and Michael
      A. Peterson,  our Executive  Vice-President,  Chief Financial  Officer and
      Chief Operating Officer reflecting the terms previously disclosed.


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

      (a)   Exhibits.

            3.1 Restated  Certificate of Incorporation of CoreComm Holdco,  Inc.
            (incorporated by reference to Exhibit 3.1 to CoreComm Holdco, Inc.'s
            registration statement on Form S-1, file no, 333-82402)

            3.2 Certificate of Amendment to the Certificate of  Incorporation of
            CoreComm  Holdco,  Inc.*  (incorporated  by reference to Exhibit 3.2
            CoreComm Holdco, Inc.'s registration statement on Form S-1, file no,
            333-82402)

            3.3 Certificate of Correction to the Certificate of Amendment to the
            Certificate of Incorporation of CoreComm Holdco, Inc.  (incorporated
            by  reference to Exhibit 3.3 CoreComm  Holdco,  Inc.'s  registration
            statement on Form S-1, file no, 333-82402)

            3.4 Certificate of Amendment to the Certificate of  Incorporation of
            CoreComm  Holdco,  Inc.  as filed with the State of Delaware on July
            17, 2002

            3.5 Amended By-laws of ATX  Communications,  Inc.  (incorporated  by
            reference  to  Exhibit  3.4  CoreComm  Holdco,  Inc.'s  registration
            statement on Form S-1, file no, 333-82402)

            4.1  Prospectus on Form S-1 as filed on June 27, 2002  (incorporated
            by reference to CoreComm Holdco,  Inc.'s  registration  statement on
            Form S-1, file no, 333-82402)

            10.1  Employment  Agreement  between ATX  Communications,  Inc.  and
            Thomas J. Gravina dated July 31, 2002 and effective as of January 1,
            2002.

            10.2  Employment  Agreement  between ATX  Communications,  Inc.  and
            Michael A. Peterson  dated July 31, 2002 and effective as of January
            1, 2002.

            99.1  Certification  of CEO and CFO  Pursuant  to 18 U.S.C.  Section
            1350, as adopted  pursuant to the Section 906 of the  Sarbanes-Oxley
            Act of 2002

__________

                                       42

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

      (b)   Reports on Form 8-K.

            During the quarter ended June 30, 2002,  the CoreComm  Limited filed
            the following reports on Form 8-K:

            (i)   Report  dated  April 1,  2002,  reporting  under Item 5, Other
                  Events,   that  CoreComm   Limited   issued  a  press  release
                  announcing  its  earnings  for  the  quarter  and  year  ended
                  December 31, 2001.
            (ii)  Report  dated  April  15,  2002,   reporting   under  Item  9,
                  Regulation FD Disclosure, that CoreComm issued a press release
                  announcing that it has extended its  relationship  with Public
                  Financial Management ("PFM") for the third consecutive term as
                  the company's telecommunications provider of choice.
            (iii) Report  dated  April  17,  2002,   reporting   under  Item  9,
                  Regulation FD Disclosure, that CoreComm issued a press release
                  announcing that ATX  Communications  had filed an amendment to
                  its Form S-4 Registration Statement, which includes an amended
                  exchange offer prospectus, with the SEC.
            (iv)  Report  dated  April  18,  2002,   reporting   under  Item  9,
                  Regulation FD Disclosure, that CoreComm issued a press release
                  announcing that it has recently established relationships with
                  several notable  businesses  throughout the  Mid-Atlantic  and
                  Midwest regions.
            (v)   Report dated May 1, 2002,  reporting  under Item 9, Regulation
                  FD Disclosure, that CoreComm issued a press release announcing
                  that  CoreComm  has signed a  five-year  agreement  to provide
                  dedicated   Internet  access  to  Vault9,  a  Managed  Service
                  Provider in the Greater Toledo, Ohio market.
            (vi)  Report dated May 10, 2002,  reporting under Item 9, Regulation
                  FD Disclosure, that CoreComm issued a press release announcing
                  the extension of the expiration date of the registered  public
                  exchange offers by ATX Communications until 12:00 Midnight New
                  York City time,  on May 21,  2002,  unless ATX  Communications
                  terminates the exchange offer or extends the expiration date.
            (vii) Report dated May 15, 2002,  reporting under Item 9, Regulation
                  FD Disclosure, that CoreComm issued a press release announcing
                  their operating results for the quarter ended March 31, 2002.
            (viii)Report dated May 21, 2002,  reporting under Item 9, Regulation
                  FD Disclosure, that CoreComm issued a press release announcing
                  the extension of the expiration date of the registered  public
                  exchange offers by ATX Communications until 5:00 P.M. New York
                  City  time,  on  May  28,  2002,  unless  ATX   Communications
                  terminates the exchange offer or extends the expiration date.

                                       43

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

            (ix)  Report dated May 22, 2002,  reporting under Item 9, Regulation
                  FD Disclosure, that CoreComm issued a press release announcing
                  that it had received notice of a Nasdaq Staff Determination on
                  May 16, 2002,  indicating that the common stock of the Company
                  is  subject  to  delisting  from the  Nasdaq  National  Market
                  because the  Company  did not comply  with the minimum  market
                  value of  publicly  held  shares  requirements  for  continued
                  listing.  The Company is filing a request for a hearing before
                  a Nasdaq  Listing  Qualifications  Panel to review  the Nasdaq
                  Staff Determination.  Under Nasdaq rules pending a decision by
                  the Panel,  the common stock of the Company  will  continue to
                  trade on the Nasdaq National Market.
            (x)   Report dated May 28, 2002,  reporting under Item 9, Regulation
                  FD Disclosure, that CoreComm issued a press release announcing
                  the extension of the expiration date of the registered  public
                  exchange offers by ATX Communications until 5:00 P.M. New York
                  City  time,  on  June  3,  2002,  unless  ATX   Communications
                  terminates the exchange offer or extends the expiration date.
            (xi)  Report dated June 3, 2002,  reporting under Item 9, Regulation
                  FD Disclosure, that CoreComm issued a press release announcing
                  the extension of the expiration date of the registered  public
                  exchange offers by ATX Communications until midnight, New York
                  City  time,  on  June  12,  2002,  unless  ATX  Communications
                  terminates the exchange offer or extends the expiration date.
            (xii) Report dated June 12, 2002, reporting under Item 9, Regulation
                  FD Disclosure, that CoreComm issued a press release announcing
                  the extension of the expiration date of the registered  public
                  exchange  offers by ATX  Communications  until 5 pm,  New York
                  City  time,  on  June  21,  2002,  unless  ATX  Communications
                  terminates the exchange offer or extends the expiration date.
            (xiii)Report   dated  June  24,  2002,   reporting   under  Item  9,
                  Regulation FD Disclosure, that CoreComm issued a press release
                  announcing  the  extension  of  the  expiration  date  of  the
                  registered public exchange offers by ATX Communications  until
                  5 pm,  New  York  City  time  on June  26,  2002,  unless  ATX
                  Communications  terminates  the exchange  offer or extends the
                  expiration date.
            (xiv) Report dated June 26, 2002, reporting under Item 9, Regulation
                  FD Disclosure, that CoreComm issued a press release announcing
                  the extension of the expiration date of the registered  public
                  exchange  offers by ATX  Communications  until Noon,  New York
                  City  time,  on  July  1,  2002,  unless  ATX   Communications
                  terminates the exchange offer or extends the expiration date.

  No financial statements were filed with these reports.


                                       44

   ATX Communications, Inc. (formerly CoreComm Holdco, Inc. and Subsidiaries)

                                   SIGNATURES



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



                                           ATX COMMUNICATIONS, INC.



Date:    August 14, 2002                   By: /s/ Michael A. Peterson
                                               -------------------------
                                               Michael A. Peterson
                                               Executive Vice President,
                                               Chief Operating Officer and
                                               Chief Financial Officer



Date:    August 14, 2002                   By: /s/ Gregg N. Gorelick
                                               --------------------------
                                               Gregg N. Gorelick
                                               Senior Vice President-Controller
                                               and Treasurer
                                               (Principal Accounting Officer)


                                       45