Summary of ELANDIA INTERNATIONAL INC.

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

Special Note About Forward Looking Statements

This report contains certain "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), which are based on management's exercise of business judgment, as well as assumptions made by and information currently available to management. When used in this document, the words "may", "will", "anticipate", "believe", "estimate", "expect", "intend" and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect our current view of future events and are subject to certain risks and uncertainties as described in eLandia International Inc.'s ("eLandia"), Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC"). Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results could differ materially from those anticipated in these forward-looking statements. We undertake no obligation, and do not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize.

Overview

eLandia is a provider of information technology (IT) products and services to small, medium-sized and large businesses as well as government entities, primarily in Latin America. Through our subsidiaries, we offer products and services in over 17 countries, including Argentina, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru, Trinidad & Tobago, Venezuela and the United States. eLandia also operates in the South Pacific region, providing IT products and services in Fiji and other Pacific Island nations and, through April 17, 2009, in Papua New Guinea through our 50% interest in Datec PNG Pty Limited which, as discussed below, has been sold effective April 17, 2009. In American Samoa we offer a broad range of communications services including mobile communications and Internet access. In addition, we have invested in an underwater fiber optic cable service terminating in American Samoa which began generating revenue during May 2009 and we recently acquired the assets of Pacific Island Cable, a cable TV provider on American Samoa.

We provide innovative technology solutions that help customers increase efficiency, improve business agility, decrease costs, and maximize their existing IT investments in order to achieve competitive advantages. Our service portfolio currently consists of three core business lines: Technology Integration Services, Education Services, and Managed Services, all of which help our customers compete effectively in the global economy. We also hold more than 40 certifications and specializations from leading technology companies, including Cisco Systems, Inc. ("Cisco") and Microsoft Corporation ("Microsoft").

eLandia corporate headquarters are located at 8200 NE 52nd Terrace, Suite 102, Miami, Florida 33166. The telephone number is (305) 415-8830.

Recent Developments

Modification to Mr. Pizarro's Employment Agreement

We entered into an amendment with Mr. Pizarro to his employment agreement on February 6, 2009 (the "Amendment"). Under the Amendment, Mr. Pizarro waived any breach by us by reason of our entry into the Modification Agreement and released us of any liabilities resulting from such breach. In consideration of Mr. Pizarro agreeing to enter into the Amendment, we agreed to provide certain additional compensatory benefits to Mr. Pizarro as follows:

• The exercise price with respect to options to purchase 3,122,000 shares of our common stock previously granted pursuant to the Mr. Pizarro's Employment Agreement was reduced to $0.45 per share;

• Mr. Pizarro was granted options to purchase an additional 1,000,000 shares of our common stock at an exercise price of $0.45 per share, which options vest equally on a monthly basis over a three-year period beginning February 2009, if and only if Mr. Pizarro remains continuously employed by us until each vesting date, subject to other terms and conditions;

• All "unvested" shares of our common stock granted pursuant to Mr. Pizarro as part of a 750,000 share restricted stock award pursuant to Mr. Pizarro's Executive Employment Agreement immediately vested, and all contractual restrictions with respect to such shares were terminated; and

• Mr. Pizarro's full bonus for 2008 in the amount of $375,000, as provided in his Employment Agreement, was paid promptly following the execution of the Amendment.

Table of Contents

In addition, Mr. Pizarro's Employment Agreement was further amended to provide as follows:

• during 2009, Mr. Pizarro will be paid a guaranteed bonus of $375,000, payable in equal bi-monthly installments commencing in February 2009;

• we amended our Policy Governing Insider Trading (the "Policy"), to permit, with our approval, (a) the adoption of written plans for trading our securities in accordance with SEC Rule 10b5-1(c) (a "Trading Plan"), and
(b) exempt transactions made pursuant to approved Trading Plans from the Policy;

• following the amendment to the Policy described above, we agreed to approve a Trading Plan for Mr. Pizarro for certain shares of our common stock owned by Mr. Pizarro; and

• by no later than December 2009, we agreed to adopt a written Senior Management Incentive Compensation Plan applicable to years 2010 and beyond.

Modification of Financing Arrangements with Stanford International Bank Ltd. and Restructuring of Capital.

At the end of 2008 and the beginning of 2009, without any advance warning, we were advised by Stanford International Bank Ltd. ("SIBL"), our then principal stockholder, that due to the deteriorating global economic conditions it would not be able to extend the full amount of its $40 million loan commitment to us under a Credit Agreement, dated June 21, 2008 (the "Credit Agreement") (referred to herein as the "Stanford Funding"). As a result of these developments, on February 6, 2009, as part of a modification to our capital structure, we entered into a Modification Agreement (the "Modification Agreement") with SIBL. Pursuant to the Modification Agreement, our financing arrangement with SIBL was substantially revised. Specifically, under the terms of the Modification Agreement:

• we agreed to further amend the Credit Agreement ("Fourth Amendment") to terminate SIBL's obligation to fund the balance of $28 million committed by SIBL under the Credit Agreement;

• in partial consideration of our agreement to terminate the Credit Agreement, SIBL agreed to convert the $12 million outstanding principal amount under the Credit Agreement into 1,777,778 shares of our Series B Convertible Preferred Stock ("Series B Preferred Stock") and the accrued interest was cancelled;

• as a result of the Fourth Amendment and the termination of the Credit Agreement, all related loan, security and collateral documents were also released and terminated. This included the release of guarantees granted by our subsidiaries, eLandia South Pacific Holdings, Inc. and eLandia Technologies, Inc. (the "Guarantors"), for the benefit of SIBL. In addition, pursuant to the Fourth Amendment, all security interests and other liens granted to SIBL under securities pledge agreements executed by us and each of the Guarantors were satisfied and discharged and all collateral pledged was released;

• SIBL agreed to surrender for cancellation 16,148,612 shares of our common stock thereby reducing to 49.9% SIBL's ownership of our outstanding common stock;

• we granted SIBL an option, exercisable through March 31, 2009, to purchase an additional 592,593 shares of our Series B Preferred Stock for an aggregate purchase price of $4 million (the "Option"). This Option has expired unexercised;

• SIBL agreed to modify the Series B Preferred Stock as follows:

• setting the initial conversion rate (the "Conversion Rate") for the shares of the Series B Preferred Stock at a rate of seven shares of our common stock for each eight shares of Series B Preferred Stock;

• providing for an adjusted Conversion Rate of 3.5 shares of common stock for every eight shares of series B preferred stock in the event that SIBL did not exercise the Option;

• providing that the shares of Series B Preferred Stock would be automatically converted into shares of our common stock at the then effective Conversion Rate to the extent necessary for SIBL to maintain ownership of 49.9% of the then total amount of issued and outstanding shares of our common stock;

• removing all voting rights of the Series B Preferred Stock;

• providing that the shares of Series B Preferred Stock would have no more rights than our common stock, other than a liquidation preference; and

• adding certain protective provisions providing that the following actions cannot be taken without prior approval of the holders of the majority of the Series B Preferred Stock outstanding: (a) any change to the rights, preferences or privileges of the Series B Preferred Stock; or (b) the creation of a new class or series of stock superior to the Series B Preferred Stock.

• SIBL agreed to place all of its shares of our common stock and Series B Preferred Stock in a voting trust pursuant to a voting trust agreement;

Table of Contents
• all registration rights agreements between us and SIBL were terminated with no further obligation on our part to file any registration statement for the benefit of SIBL;

• we agreed to amend the employment agreement of Pete R. Pizarro, our Chief Executive Officer ("Pizarro"), who would have otherwise been entitled to terminate his employment for "Good Reason;" and

• SIBL agreed to the transfer by February 28, 2009 to us of $2.35 million of indebtedness of our subsidiary, Desca Holding LLC ("Desca"), due to an affiliate of SIBL in exchange for 344,444 shares of Series B Preferred Stock, or, if such transfer does not occur, a further cancellation of 1,801,740 shares of our common stock held under the voting trust agreement. Such transfer and exchange was not made by SIBL but the Voting Trustee has not surrendered the 1,801,740 shares of common stock for cancellation pending relief from the February 16, 2009 court order described below.

In connection with the termination of the Credit Agreement, pursuant to a certain Voting Trust Agreement, dated February 6, 2009, by and between the Company, Pizarro, and SIBL (the "Voting Trust Agreement"), SIBL agreed to deposit 12,364,377 shares of our common stock and 4,118,263 shares of Series B Preferred Stock, representing all shares of our capital stock then owned by SIBL, into a voting trust (the "Voting Trust"). Pursuant to the Voting Trust Agreement, SIBL appointed Pizarro, to act as the trustee. With certain limited exceptions, Pizarro was granted discretionary voting power with respect to all shares of stock placed in the Voting Trust by SIBL, except that Pizarro is required to vote the shares in accordance with and in the same proportion as the holders of the remaining outstanding shares of our common stock voting on any of the following matters (which will be determined by a vote of the shares other than those represented by the voting trust certificates): (i) the sale of the Company whether by merger, consolidation, sale of all or substantially all the assets or other similar transaction; and (ii) if the Company desires to increase the amount of shares of our common stock issuable pursuant to any stock option or other equity plan in an amount exceeding the greater of 9,500,000 shares of our common stock or 15% of the total amount of outstanding common stock. Additionally, SIBL retained its right to vote with respect to certain issues pertaining to the Series B Preferred Stock including any change to the rights, preferences or privileges of the Series B Preferred Stock or the creation of a new class or series of stock superior to the Series B Preferred Stock.

As part of the arrangements with SIBL, effective February 6, 2009, we amended our Certificate of Incorporation with the filing of an Amended and Restated Certificate of Designations, Rights and Preferences of Series B Preferred Stock ("Amended and Restated Certificate of Designation"). Under the Amended and Restated Certificate of Designation, all voting rights of the Series B Preferred Stock were removed. As a result of the Amended and Restated Certificate of Designation, the Series B Preferred Stock has the following protective provisions:

• a liquidation preference; and

• at all times that shares of Series B Preferred Stock remain outstanding, we may not, without prior approval of the holders of the majority of the Series B Preferred Stock outstanding:

• change the rights, preferences or privileges of the Series B Preferred Stock; or

• create a new class or series of stock having a preference over or otherwise being superior to the Series B Preferred Stock.

In addition, the Conversion Ratio for the Series B Preferred Stock, previously one share of our common stock for each share of Series B Preferred Stock, was modified such that the shares of Series B Preferred Stock are now convertible into common stock based on a ratio of 3.5 shares of common stock for every eight shares of Series B Preferred Stock.

Recent Financial Collapse of SIBL and its Affiliates

On or about February 16, 2009, pursuant to an action brought by the SEC against SIBL and certain of its affiliates, including its owner Robert Allen Stanford, alleging, among other things, securities law fraud under both the Securities Act of 1933 and the Securities Exchange Act of 1934, the United States District Court for the Northern District of Texas, Dallas Division, issued an order appointing a Receiver for all the assets and records (the "Receivership Estate") of SIBL, Stanford Group Company, Stanford Capital Management, LLC, R. Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The order directs the Receiver to take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. Subsequent to the issuance of the court order, and in accordance with such order, the Voting Trustee has not (i) surrendered for cancellation any shares of our common stock, or (ii) converted any shares of our Series B Preferred Stock into common stock. On or about February 17, 2009, the SEC formally charged Mr. Stanford and three of his companies, including SIBL, alleging a fraudulent, multi-billion dollar investment scheme. The SEC also charged SIBL chief financial officer James Davis and Stanford Financial Group chief investment officer Laura Pendergest-Holt in the enforcement action.

In addition, on February 19, 2009, the Antiguan Financial Services Regulatory Commission appointed two joint-receivers for all of the undertaking, property and assets of SIBL and Stanford Trust Corporation, Ltd. ("STCL") and said appointment was subsequently ratified by the Eastern Caribbean Supreme Court in the High Court of Justice of Antigua and Barbuda on February 26, 2009. The order directs (i) the joint-receivers to take into their custody and control all the property, undertakings and other assets of SIBL and STCL, and (ii) SIBL and STCL to restrain from disposing of or otherwise dealing with any of their assets, entering into any agreements or arrangement to sell, transfer or otherwise dispose of any of their assets, or carrying on of transacting business of any kind whatsoever under the license granted by the Financial Services Regulatory Commission without the consent, management and supervision of the Financial Services Regulatory Commission.

Table of Contents

On May 15, 2009, the district court in Dallas ruled that the Antiguan liquidators for SIBL may seek Chapter 15 bankruptcy protection for SIBL under U.S. law. A Chapter 15 filing assists in resolving cases involving debtors, assets and claimants in multiple countries. The Antiguan liquidators for SIBL are seeking the authority to file for bankruptcy as a means of safeguarding SIBL's assets. The potential impact on us from such a bankruptcy filing is uncertain.

On June 2, 2009, we received a letter from the U.S. receiver clarifying that the assets and business operations of eLandia and our subsidiaries are not part of the Stanford Financial Group Receivership Estate. The receiver's letter did state that the voting trust certificates issued to SIBL, representing SIBL's interest in the shares of our capital stock deposited in the voting trust, did constitute part of the Stanford Financial Group Receivership Estate.

On June 19, 2009, a federal criminal indictment was issued against Mr. Stanford and several other executives and officers of SIBL, including the former chief investment officer, former chief accounting officer and former global controller. The indictment charges these individuals with fraud, obstruction and other crimes related to SIBL and other Stanford Financial companies.

On July 16, 2009, the receiver requested approval from the court to engage a private equity advisor to assist the receiver to properly manage the investments in the Receivership Estate, assess their value and identify potential buyers, thereby maximizing the value to the Receivership Estate. These investments include the voting trust certificates issued to SIBL representing SIBL's interest in the shares of our capital stock deposited in the voting trust.

Sale of South Pacific Subsidiary

Through April 17, 2009, we held a 50% interest in Datec PNG. Due to our management influence, we consolidated Datec PNG within our consolidated financial statements under the FIN 46(R) consolidation model. Datec PNG provides technology products, Internet access services and IT services to large corporate organizations. Datec PNG had an overdraft facility account with a maximum borrowing limit of approximately $1.9 million. This overdraft facility account was secured by the assets of Datec PNG. On April 17, 2009 we sold our 50% ownership interest in Datec PNG to Steamships Ltd. As a result of the sale of Datec PNG, we re-measured the value of the net assets to be sold at the lower of the carrying amount or fair value less selling costs. We determined that the sale price of $5,610,000 in cash, less selling costs of $22,427, was the best indicator of the fair value of the assets to be sold. Accordingly, we recorded an impairment charge related to the goodwill and intangible assets of $10,827,252 during the three months ended March 31, 2009 and a gain upon the closing of the sale, including the results of operations for the 17 day period ending April 17, 2009, of $734,909. The write off of the goodwill and the gain resulted in an aggregate loss on the sale of Datec PNG of $10,092,343, which is included in discontinued operations.

Table of Contents

Term Loan Agreement

On June 8, 2009, we entered into a Loan Agreement ("Term Loan Agreement") with ANZ whereby ANZ provided $16,672,000 in the form of a term loan to our subsidiaries, ASHC and Samoa American Samoa Cable, LLC ("SAS"). ASHC and SAS are the borrowers under the facility and eLandia and our subsidiary, American Samoa Hawaii Undeployed Cable, LLC ("ASHUC") are the guarantors. The loan is principally secured by substantially all of the assets and operations of ASHC, SAS and ASHUC. The loan bears interest at the prime rate plus 2% and is due on June 3, 2016. The Term Loan Agreement requires seven monthly installments of interest only, followed by 77 monthly installments of $187,319, including principal and interest, through the maturity date. The remaining unpaid principal balance is due on the maturity date. In the event that a United States Department of Agriculture ("USDA") Rural Development 'Conditional Commitment for Guarantee' ("USDA Guaranty") is obtained in favor of ANZ covering the outstanding amount of the loan then, as of the effective date of the USDA Guaranty in favor of ANZ, the interest rate will be decreased to the prime rate plus 1.10%. The proceeds of the loan were used to fund the construction, installation and delivery to customers of a fully operational underwater fiber optic cable linking America Samoa and Samoa to Hawaii and providing improved long distance telecommunication and data services. In connection with the Term Loan Agreement, we executed a guaranty in favor of ANZ (the "Guaranty"). Pursuant to the Guaranty, we have unconditionally guaranteed the repayment and other obligations of ASHC and SAS under the Term Loan Agreement.

We own, indirectly, 66.6% of ASHC and the remaining 33.3% is owned by the American Samoa Government. SAS and ASHUC are wholly-owned subsidiaries of ASHC.

Purchase of Remaining Portion of Desca

On July 17, 2009, but effective as of July 1, 2009, we consummated a purchase and sale transaction under a Securities Purchase Agreement (the "30% Purchase Agreement") with Jorge Enrique Alvarado Amado ("Alvarado"). Pursuant to the 30% Purchase Agreement, which is effective as of July 1, 2009, we purchased 3,000,000 Common Units ("30% Units") of Desca for a mutually agreed upon aggregate purchase price of $1.9 million, as described below. As a result of our purchase of the 30% Units under the 30% Purchase Agreement, effective July 1, 2009, Desca became a wholly-owned subsidiary. The adoption of SFAS 160 requires that we adjust the change in fair value of the noncontrolling interest purchase price obligation commencing January 1, 2009. Prior to the adoption of SFAS 160, the change in the fair value of the noncontrolling interest purchase price obligation was recorded in the statement of operations. For the six months ended June 30, 2009, the change in fair value of the noncontrolling interest purchase price obligation of $3,946,810 was recorded through the stockholders' equity. The noncontrolling interest attributable to Desca for the six months ended June 30, 2009 was $4,760,937 and is included in the statement of operations.

Under the terms of the 30% Purchase Agreement we have: (i) made a payment to Alvarado of $500,000 in cash, (ii) executed and delivered to Alvarado a $500,000 promissory note payable on July 1, 2010, and (iii) issued to Alvarado 2,500,000 shares of our common stock, valued at $0.9 million based on the closing stock price of $0.34 on July 17, 2009, of which (A) one-half of such shares were deposited with an escrow agent to be held and released in accordance with the terms of an escrow agreement, as described below, and (B) one-half of such shares were delivered to Alvarado. The promissory note provides for interest to accrue at 6% per annum and all payments of principal and accrued interest to be paid on the maturity date of July 1, 2010. The 30% Purchase Agreement provides that the purchase price will be reduced to the extent that the value of Desca's net assets at closing is determined to be less as of June 30, 2010. Alvarado will be responsible to pay us an amount equal to 30% of any deficiency and such amount will be deemed a claim for indemnification under the 30% Purchase Agreement.

In addition to the purchase price described above, we will be required to pay to Alvarado contingent consideration (the "Contingent Consideration") in the event Desca achieves certain financial performance targets for 2009 identified in the 30% Purchase Agreement. The aggregate amount of the Contingent Consideration will be, at Alvarado's option (i) up to an additional maximum amount of 5,000,000 restricted shares of our common stock, (ii) payment of up to a maximum amount of $8,000,000 in cash to be evidenced by an additional non-interest bearing promissory note payable on December 31, 2013, or (iii) up to an additional maximum amount of 2,500,000 restricted shares of our common stock and payment of up to an additional maximum amount of $4,000,000 in cash to be evidenced by an additional non-interest bearing promissory note payable on December 31, 2013.

All but 1,250,000 shares of our common stock constituting part of the purchase price, as well as any additional shares of our common stock constituting amounts of Contingent Consideration, will be deposited with an escrow agent to be held and released over a 4-year period in accordance with the terms of an escrow agreement, as described below. All shares of our common stock held in escrow shall be available to satisfy any claim by us for indemnification under the 30% Purchase Agreement. All shares of our common stock constituting part of the purchase price will be held in escrow for a period of two years following the closing; however, if such shares become eligible for resale by Alvarado pursuant to Rule 144 under the Securities Act of 1933, such shares may be sold by Alvarado, but only so long as Alvarado makes arrangements acceptable to us for the immediate deposit of the net cash proceeds into escrow to be held in accordance with the terms thereof. All shares of our common stock constituting part of the Contingent Consideration, if any, will be held in escrow for a period of four years following the closing; however, eight equal semi-annual distributions of Contingent Consideration, commencing on July 1, 2010, will be made to Alvarado until the entire amount of Contingent Consideration has been paid. In addition, all promissory notes issued by us in connection with the 30% Purchase Agreement, are subject to setoff to satisfy any indemnification claims we may have against Alvarado.

Table of Contents

At the closing of the 30% Purchase Agreement, Alvarado also entered into a two-year amended and restated employment agreement pursuant to which he will serve as chief executive officer of our Networking Group. Alvarado also executed a non-compete agreement containing customary non-compete, non-solicitation, non-disclosure and non-disparagement covenants. Finally, eLandia and Alvarado executed a termination and release agreement pursuant to which each of the parties agreed to terminate certain prior agreements and to release any claims the parties may have against one another arising prior to the date of the 30% Purchase Agreement.

Critical Accounting Policies and Estimates

The preparation of our unaudited interim condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to exercise its judgment. We exercise considerable judgment with respect to establishing sound accounting policies and in making estimates and assumptions that affect the reported amounts of our assets and liabilities, our recognition of revenues and expenses, and disclosure of commitments and contingencies at the date of the financial statements.

On an ongoing basis, we evaluate our estimates and judgments. Areas in which we exercise significant judgment include, but are not necessarily limited to, the amount of uncollectible accounts receivable, the valuation of value added taxes . . .