UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM
10-Q xQUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2006 OR oTRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the transition
period from _____________________ to _______________________ Commission file
number: 000-27582 SPEEDUS
CORP.(Exact name of registrant as specified in its charter) Delaware

13-3853788(State or other
  jurisdiction of
  incorporation or organization)

(I.R.S. Employer
  Identification No.)9 Desbrosses Street,
  Suite 402
  Brooklyn, New York

10013(Address of principal
  executive offices)

(Zip Code) 888-773-3669  (Registrants
telephone number, including area code)
 Not Applicable  (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 o Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2 of
the Exchange Act. Large accelerated
filer  oAccelerated
filer oNon-accelerated
filer x
 Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No x The number of outstanding shares of the registrants
common stock, par value $.01 per share, as of November 8, 2006 was 16,019,290.    SPEEDUS
CORP.
INDEX TO FORM 10-Q

PART
I  FINANCIAL INFORMATION

  PageItem
          1.
      Financial
          StatementsConsolidated
          Balance Sheets (unaudited) as of September 30, 2006
          and December 31, 2005
      3Consolidated
          Statements of Operations (unaudited) for the
          Three and Nine Months Ended September 30, 2006 and 2005
      4Consolidated
          Statements of Cash Flows (unaudited) for the
          Nine Months Ended September 30, 2006 and 2005
      5Condensed
          Notes to Consolidated Financial Statements (unaudited)
      6-12Item
          2.
      Managements
          Discussion and Analysis of Financial
          Condition and Results of Operations
      13-17Item
          3.
      Quantitative
          and Qualitative Disclosures About Market Risk
      17Item
          4.
      Controls
          and Procedures
      17PART
          II  OTHER INFORMATIONItem
          1.
      Legal
          Proceedings
      18Item
          1A.
      Risk
          Factors
      18Item
          2.
      Unregistered
          Sales of Equity Securities and Use of Proceeds
      18Item
          3.
      Defaults
          Upon Senior Securities
      18Item
          4.
      Submission
          of Matters to a Vote of Security Holders
      18Item
          5.
      Other
          Information
      18Item
          6.
      Exhibits
      18Signature
          Page
      19Exhibit
  31.1
Certification of Chief
  Executive Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of
  1934, as Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002
20Exhibit
  31.2
Certification of Chief
  Financial Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of
  1934, as Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002
21Exhibit
  32.1
Certification of Chief
  Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
  Section 906 of The Sarbanes-Oxley Act of 2002
22Exhibit
  32.2
Certification of Chief
  Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
  Section 906 of The Sarbanes-Oxley Act of 2002
232

SPEEDUS CORP.CONSOLIDATED BALANCE SHEETS
(unaudited)

September
  30,

December
  31,2006

2005ASSETSCurrent
assets:Cash and cash
  equivalents

$
11,095,515

$
18,563,088United States
  Treasury bills


4,989,300


Marketable
  securities


242,201


1,174,825Prepaid
expenses
  and other


183,866


182,008Total current
  assets


16,510,882


19,919,921Property and
  equipment, net of accumulated depreciation of $464,694 and $321,256


663,853


426,201Other intangible
  assets, net of accumulated amortization of $3,081,360 and $2,607,133


148,684


622,911Other
  investments


800,000


800,000Other assets


68,716


691,444Total
assets

$
18,192,135

$
22,460,477LIABILITIES
AND STOCKHOLDERS
  EQUITYCurrent
  liabilities:Accounts
payable

$
87,500

$
68,692Accrued
  liabilities


928,325


1,215,859Total current
  liabilities


1,015,825


1,284,551Minority
  interest





Commitments and
  ContingenciesStockholders
  equity:Common stock
  ($.01 par value; 50,000,000 shares authorized; 21,750,174 shares issued)


217,502


217,502Preferred stock
  ($.01 par value; 20,000,000 shares authorized):Series A Junior
  Participating ($.01 par value; 4,000 shares authorized; no shares issued and
  outstanding)





Additional
  paid-in-capital


91,343,756


90,724,450Treasury stock
  (at cost; 5,730,884 and 5,632,275 shares)


(6,016,070
)

(5,884,863
)Accumulated
  deficit


(68,368,878
)

(63,881,163
)Stockholders
  equity


17,176,310


21,175,926Total
  liabilities and stockholders equity

$
18,192,135

$
22,460,477The accompanying
notes are an integral part of these consolidated financial statements.

3

SPEEDUS
CORP.CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

Three months ended September 30,

Nine months ended September 30,2006

2005

2006

2005Revenues

$
210,179

$
293,768

$
638,318

$
803,494Expenses:Selling, general
  and administrative


699,044


981,196


3,161,916


2,921,117Research and
  development


482,199


389,238


1,384,346


1,085,507Depreciation and
  amortization


174,272


229,473


617,665


692,849Cost of sales


70,969


92,819


230,215


263,680Total operating
  expenses


1,426,484


1,692,726


5,394,142


4,963,153Operating loss


(1,216,305
)

(1,398,958
)

(4,755,824
)

(4,159,659
)Investment
  income


232,460


151,467


268,109


432,720Minority
  interest





35,681





159,294Loss before
  benefit from income taxes


(983,845
)

(1,211,810
)

(4,487,715
)

(3,567,645
)Benefit from
  income taxes





321,539





321,539Net loss

$
(983,845
)
$
(890,271
)
$
(4,487,715
)
$
(3,246,106
)Per share:Basic and
  diluted loss per common share

$
(0.06
)
$
(0.06
)
$
(0.28
)
$
(0.20
)Weighted average
  common shares outstanding - basic and diluted


16,024,108


16,164,823


16,063,362


16,203,146The accompanying
notes are an integral part of these consolidated financial statements.

4

SPEEDUS
CORP.CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Nine months ended September 30,2006

2005Cash flows from
  operating activities:Net loss

$
(4,487,715
)

(3,246,106
)Adjustments to
  reconcile net loss to net cash used in operating activities:Depreciation and
  amortization


617,665


692,849Unrealized investment
  (gains)/losses


470,095


32,702Minority
  interest





(159,294
)Stock based
  compensation


552,795


12,282Changes in
  operating assets and liabilities:Marketable securities


462,529


(778,889
)Prepaid expenses and
  other


(1,858
)

94,097Other assets


622,728


(25,659
)Accounts payable


18,808


(163,385
)Accrued liabilities


(221,023
)

(92,477
)Net cash used in
  operating activities


(1,965,976
)

(3,633,880
)Cash flows from
  investing activities:Property and
  equipment additions


(381,090
)

(15,157
)United States
  Treasury bills:Purchases


(14,989,300
)

(13,992,200
)Maturities


10,000,000


16,000,000Other
  investmentsPurchases





(500,000
)Transfer to
  Marketable Securities





600,000Net cash
  provided by/(used in) investing activities


(5,370,390
)

2,092,643Cash flows from
  financing activities:Repurchase of
  stock


(131,207
)

(366,492
)Proceeds from
  exercise of options or warrants





162,500Net cash used in
  financing activities


(131,207
)

(203,992
)Net decrease in
  cash and cash equivalents


(7,467,573
)

(1,745,229
)Cash and cash
  equivalents, beginning of period


18,563,088


17,740,865Cash and cash
  equivalents, end of period

$
11,095,515

$
15,995,636The accompanying
notes are an integral part of these consolidated financial statements.

5

SPEEDUS
CORP.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
(unaudited)

1. Basis
of Presentation

The
unaudited consolidated financial statements of Speedus Corp. have been prepared
in accordance with generally accepted accounting principles for interim
financial information. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for fair
statements have been included. These financial statements do not include all information
and notes required by generally accepted accounting principles for complete
financial statements. These financial statements should be read in conjunction
with the Companys 2005 audited consolidated financial statements and notes
thereto on Form 10-K.

Operating
results for the three and nine months ended September 30, 2006 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2006.

Financial
statements and principles of consolidation

The
consolidated financial statements include the accounts of Speedus and its
wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.

Companies
in which Speedus directly or indirectly owns more than 50% of the outstanding
voting securities or that Speedus has effective control over are accounted for
under the consolidation method of accounting. Under this method, those
companies balance sheets and results of operations, from the date Speedus
acquired control, are included in Speedus consolidated financial statements.
The interest in the net assets and operations of these companies other
stockholders is reflected in the caption Minority interest in Speedus
consolidated balance sheets and statements of operations.

Companies
in which Speedus owns less than 20% of the outstanding voting securities and
does not have the ability to exercise significant influence are accounted for
under the cost method of accounting.

Estimates

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

Marketable
Securities

All
marketable securities are defined as trading securities under the provisions of
Statement of Financial Accounting Standards No. 115, Accounting for Certain
Investments in Debt and Equity Securities. At September 30, 2006 and December
31, 2005, marketable securities consisted of publicly traded equity securities
and were recorded at fair market value. Their original cost was $956,000 and
$1,419,000, unrealized losses since acquisition were $714,000 and $244,000 and
the carrying value was $242,000 and $1,175,000, respectively. At September 30,
2006, based upon the fair market value of these securities, 38% was invested in
technology and telecommunications companies and 62% was invested in a coal
company.

United
States Treasury bills

United
States Treasury bills are classified as held-to-maturity securities and are
carried at amortized cost.

Other
investments

The
Company has invested in equity and debt instruments of non-publicly held
companies and accounts for them under the cost method since the Company does
not have the ability to exercise significant influence over operations. The
Company monitors these investments for other than temporary impairment by
considering current factors including economic environment, market conditions,
operational performance and other specific factors relating to the business
underlying the investment, and records reductions in carrying values when
necessary. The Company does not believe there has been any impairment of other
investments at September 30, 2006.

6

Other
investments consist of:

September 30,
  2006

December 31,
  2005(a) 791,667 shares of preferred stock of a
  non-publicly held cardiovascular technology company, recorded at cost in the amount
  of $300,000. In connection with this investment, the Company also received
  warrants to purchase 375,000 shares of common stock at the lesser of $.40 or
  80% of the per share price sold in the next round of financing. This investment
  was acquired in 2004.

$
300,000

$
300,000(b) an investment in an entity specifically formed
  to invest in convertible preferred stock in a non-publicly held online and directory
  assistance company, recorded at cost in the amount of $250,000. The preferred
  stock is convertible into shares of common stock at a conversion price equal
  to 50% of the price of the common stock in an initial public offering. This
  investment was acquired in 2005.


250,000


250,000(c) an investment in an entity specifically formed
  to invest in a senior third-party note of a non-publicly held online and directory
  assistance company, recorded at cost in the amount of $250,000. The note is
  convertible into shares of common stock at a conversion price equal to the
  price of the common stock in an initial public offering. This investment was
  acquired in 2005.


250,000


250,000$
800,000

$
800,000Securities
Sold But Not Purchased

The
Company may sell publicly traded equity securities it does not own in
anticipation of declines in the fair market values of the securities. When the
Company effects such transactions, it must borrow the securities it sold in
order to deliver them and settle the trades. The amount that would be shown on
the balance sheet as Securities sold and not purchased would represent the
value of these securities at fair market value. At September 30, 2006 and
December 31, 2005, there were no securities sold and not purchased.

Due
From Broker

In
connection with selling publicly traded securities that it does not own, the
Company would be obligated to maintain balances with brokerage firms as
security for these transactions. At September 30, 2006 and December 31, 2005,
there were no restricted cash balances.

Concentrations
of Credit Risk

Financial
instruments that potentially could subject the Company to concentrations of
credit risk consist largely of cash equivalents and marketable securities.
These instruments are potentially subject to concentrations of credit risk but
the Company believes that this risk is limited due to diversification and
investments being made in investment grade securities.

The
Company may sell publicly traded equity securities that it does not own in
anticipation of declines in the fair market values of the securities. When the
Company sells securities that it does not own, it must borrow the securities it
sold in order to deliver them and settle the trades. Thereafter, the Company
must buy the securities and deliver them to the lender of the securities. The
Companys potential for loss on these transactions is unlimited since the value
of the underlying security can keep increasing which could have a material
adverse effect on the Companys consolidated financial statements.

Long-lived
Assets

The
Company periodically evaluates the net realizable value of long-lived assets,
including fixed and intangible assets, in accordance with Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, relying on anticipated future cash flows. The
Companys evaluation of anticipated future cash flows considers operating
results, business plans and economic projections, as well as, non-financial
data such as market trends, product and development cycles, and changes in
managements market emphasis. Impairment in the carrying value of an asset is
recognized when the expected future operating cash flows derived from the asset
are less than its carrying value.

7

Goodwill
and Other Intangible Assets

The
Company accounts for goodwill and other intangible assets in accordance with
Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets which requires the use of a nonamortization approach to
account for purchased goodwill and certain intangibles. Under the
nonamortization approach, goodwill is not amortized into results of operations,
but instead is reviewed for impairment on a reporting unit basis at least
annually and charged against results of operations only in the periods in which
the recorded value of goodwill is more than its implied fair value.

The
Company owns broadband assets, included in intangible assets, with a carrying
value of $103,000 at September 30, 2006 and currently does not generate
significant revenues or cash flows. However, the Company estimated that, based
upon its review of recent transactions and other factors, the fair value of
certain patents that have no carrying value on its books would generate
sufficient cash to fully realize the assets described above.

Other
intangible assets consist of: (i) the cost of a broadband patent and (ii)
medical technology in connection with the acquisition of a controlling interest
in Zargis Medical. The broadband patent, in the aggregate cost of $2,070,000
with accumulated amortization of $1,967,000 at September 30, 2006, is being
amortized over its remaining useful life of four years. Medical technology, in
the aggregate amount of $1,160,000 with accumulated amortization in the amount
of $1,115,000 at September 30, 2006, is being amortized over a period of three
years.

Amortization
expense relating to intangible assets was $129,000 and $199,000 for the three
months ended September 30, 2006 and 2005, respectively, and $474,000 and
$596,000 for the nine months ended September 30, 2006 and 2005, respectively.
The estimated annual amortization expense for the balance of fiscal 2006 and
for fiscal 2007, the expiration of the remaining useful life of the Companys
intangible assets at September 30, 2006, is $115,000 and $34,000, respectively.
Amortization expense is included in Depreciation and amortization on the accompanying
consolidated statement of operations and not allocated to Selling, general and
administrative or Research and development.

Revenue
Recognition

Revenues
from F&B Güdtfoods operations are recorded on a cash basis.

Earnings Per Share

Basic
and diluted earnings/(loss) per common share are determined in accordance with
Statement of Financial Accounting Standards No. 128, Earnings Per Share.

Excluded
from the diluted loss per share since their effect would be antidilutive were outstanding stock options and
warrants in the aggregate weighted average amount of 2,130,000 and 1,852,000 for the three months ended September 30, 2006
and 2005, respectively, and 1,995,000 and 1,873,000 for the nine months ended September 30, 2006
and 2005, respectively.

Stock
Options

Prior
to January 1, 2006, the Company accounted for its employee stock options
in accordance with Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation, as amended, which defines a fair
value method of measuring and accounting for compensation expense from
employee stock options. FASB 123 also allowed accounting for such options under
the intrinsic value method in accordance with Accounting Principles Board No.
25, Accounting for Stock Issued to Employees. The Company elected to use the
intrinsic value method and adopted the disclosure only provisions of FASB 123.
Generally, no compensation cost was recognized since stock options were issued
with exercise prices equal to the market value of the underlying shares on the
grant date. The following table presents unaudited pro forma earnings and
earnings per share as if the fair value method of accounting was applied during
the three and nine months ended September 30, 2005:

Period ended September 30, 2005Three months

Nine monthsNet earnings/(loss) as reported

$
(890,271
)
$
(3,246,106
)After tax effect of pro forma compensation


(10,342
)

(21,442
)Pro forma net earnings/(loss)

$
(900,613
)
$
(3,267,548
)Earnings/(loss) per share:Basic - as reported

$
(0.06
)
$
(0.20
)Basic - pro forma

$
(0.06
)
$
(0.20
)Diluted - as reported

$
(0.06
)
$
(0.20
)Diluted - pro forma

$
(0.06
)
$
(0.20
)The
fair value of these awards on the grant date was estimated using a
Black-Scholes option pricing model. Key assumptions used in valuing these
options included risk-free interest rates between 2-4%, expected lives of three
years and volatility factors between 51-65%.

8

Effective
January 1, 2006, the Company adopted FASB 123R using the modified
prospective application method. Under this method, for all unvested awards as
of January 1, 2006, the Company records compensation cost based upon the
fair value of those awards on the grant date over the remaining service period
of each award on a straight line basis. For awards granted after
January 1, 2006, the Company records compensation cost based upon the fair
value of those awards on the grant date over the service period of each award
on a straight line basis. Stock based compensation expense recognized during
the three and nine months ended September 30, 2006 was $5,000 and
$553,000, respectively. As a result of adopting FASB 123R, the net loss for the
three and nine months ended September 30, 2006 increased by those amounts. Both
basic and diluted loss remained unchanged during the three months ended
September 30, 2006. Both basic and diluted loss per share increased $0.03
during the nine months ended September 30, 2006.

The
fair value of the awards on the grant date was estimated using a Black-Scholes
option pricing model. Assumptions utilized in the model for both Speedus and
Zargis are evaluated and revised, as necessary, to reflect market conditions
and experience. Expected volatility of 145% has been calculated based on the
historical volatility of the Companys stock prior to the grant date. The
expected term represents the period of time that options granted are expected
to be outstanding and is estimated based on historical option exercise
experience ranging between six and seven years. The risk-free interest rate of
5% is equivalent to the U.S. Treasury yield in effect at the time of grant for
the estimated life of the option grant. Estimated forfeiture rates are based on
historical experience.

Recent
Accounting Pronouncements

There
have been no recent accounting pronouncements which upon future adoption would
have an effect on the Companys results of operations or financial position,
except as disclosed below.

In
September 2006, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 108. SAB 108 provides interpretive guidance on how the effects of
the carryover or reversal of prior year misstatements should be considered in
quantifying a potential current year misstatement. SAB 108 is effective for
fiscal years ending after November 15, 2006, and early application is
encouraged. The Company does not expect adoption of SAB 108 to have a material
effect on its results of operations or financial position.

In
September 2006, the Financial Accounting Standards Board issued
FASB 157, Fair Value Measurements. FASB 157 defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles and expands disclosures about fair value measurements.
FASB 157 is effective for fiscal years beginning after November 15, 2007
and interim periods within those fiscal years. The Company does not expect
adoption of FASB No. 157 to have a material effect on its results of operations
or financial position.

In
June 2006, the Financial Accounting Standards Board issued Interpretation No.
48, Accounting for Uncertainty in
Income Taxes - an interpretation of FASB Statement No. 109. FIN 48
clarifies the accounting for uncertainty in income taxes recognized in an
enterprises financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes and
prescribes that a company should use a more-likely-than-not recognition
threshold based on the technical merits of the tax position taken. Tax
positions that meet the more-likely-than-not recognition threshold should be
measured in order to determine the tax benefit to be recognized in the
financial statements. FIN 48 is effective for fiscal years beginning after
December 15, 2006. The Company does not expect adoption of FIN 48 to have a
material effect on its results of operations and financial condition.

2.
Stockholders Equity

Stock
Options

(a)
In November 2005, stockholders approved the Companys 2005 Stock Incentive Plan
to replace the 1995 Stock Incentive Plan which expired in October 2005. While
no new grants can be made under the 1995 Plan, options outstanding at the
expiration of the 1995 Plan will remain outstanding until exercise,
cancellation or expiration. Options available for grant at the expiration of
the 1995 Plan have been made available for grant under the 2005 Plan. To the
extent that options granted under the 1995 Plan are cancelled or expire, those
options would be available for issuance under the 2005 plan. Similar to the
1995 Plan, the 2005 Plan provides for the grant of various stockbased
incentives, including non-qualified and incentive stock options, to employees,
directors and consultants. The Company has issued new shares for the exercise
of stock options and expects to continue to do so in the future.

See
Note 1 for information on the Companys accounting policy for stock options.

9

Aggregate
stock option activity and weighted average exercise prices under both Plans for
the nine months ended September 30, 2006 is summarized as follows:

Options

PriceOutstanding at January 1


1,726,459

$
2.32Granted


409,000


1.27Exercised


0


0.00Expired


(5,000
)

15.00Forfeited


0


0.00Outstanding at September 30


2,130,459

$
2.09Exercisable at September 30


1,995,570

$
2.13Available for grant at September 30


765,368Stock
options have ten year terms. 400,000 options granted are immediately
exercisable and 9,000 options vest over a three year term.

At
September 30, 2006, there was $84,000 of unamortized compensation cost
related to outstanding stock options that is expected to be recognized over a
weighted average period of 1.5 years.

The
following table aggregates certain information concerning currently outstanding
and exercisable stock options under both Plans at September 30, 2006:

Stock options outstanding

Stock options exercisableRange of
  exercise prices

Options

Weighted
  average
  remaining
  life (years)

Weighted
  average
  exercise
  price

Aggregate
  intrinsic
  value

Options

Weighted
  average
  exercise
  price

Aggregate
  intrinsic
  value$
0.83 - 1.00


393,220

5

$
0.97

$
90,000

393,220

$
0.97

$
90,0001.07 - 2.08


1,129,000

8


1.32


30,000

994,111


1.30


30,0002.27 - 4.84


566,500

3


3.92




566,500


3.92


5.20 - 8.00


31,739

1


6.99




31,739


6.99


13.75


10,000

4


13.75




10,000


13.75


2,130,459

6

$
2.09

$
120,000

1,995,570

$
2.13

$
120,000Intrinsic
value represents the excess of market value at September 30, 2006 over the
exercise price of stock options.

(b)
In February 2002, the Board of Directors of Zargis Medical Corp. approved the
Zargis 2002 Stock Option Plan and reserved 280,000 shares of Zargis common
stock for issuance under the plan. The Zargis 2002 Plan provides for the grant
of various stockbased incentives, including non-qualified and incentive stock
options, to employees, directors, advisors and consultants. To date, there have
been no options exercised under the Zargis 2002 Plan.

Zargis
accounting policy for stock options is the same as the Companys. See Note 1.

Aggregate
stock option activity and weighted average prices under the Zargis 2002 Plan
for the nine months ended September 30, 2006 is summarized as follows:

Options

PriceOutstanding at January 1


180,134

$
2.51Granted


50,000


3.50Exercised


0


0.00Expired


0


0.00Forfeited


0


0.00Outstanding at September 30


230,134

$
2.73Exercisable at September 30


121,220

$
2.15Available for grant at September 30


49,886Stock
options have ten year terms. All options granted vest over a three year term.

At
September 30, 2006, there was $108,000 of unamortized compensation cost related
to outstanding stock options that is expected to be recognized over a weighted
average period of 1.4 years.

10

The following
table aggregates certain
information concerning currently outstanding and exercisable stock options
under the Zargis 2002 Plan at September 30, 2006:

Stock options outstanding

Stock options exercisableRange of
  exercise prices

Options

Weighted
  average
  remaining 
  life (years)

Weighted
  average
  exercise
  price

Aggregate
  intrinsic
  value

Options

Weighted
  average
  exercise
  price

Aggregate
  intrinsic
  value$
0.50

30,000

7

$
0.50

$
90,000

30,000

$
0.50

$
90,0001.75

10,500

7


1.75


18,000

10,500


1.75


18,0002.50

69,634

8


2.50


70,000

55,720


2.50


56,0003.50

120,000

9


3.50




25,000


3.50


230,134

9

$
2.73

$
178,000

121,220

$
2.15

$
164,000Intrinsic
value represents the excess of market value at September 30, 2006 over the
exercise price of stock options.

3. Legal
Proceedings

(a)
On May 11, 2006, we filed two separate complaints against Cellco
Partnership (d/b/a Verizon Wireless) in the United States District Court for the
Southern District of Florida, in which we assert Verizon Wireless is infringing
two of our patents. Verizon Wireless is a joint venture of Verizon
Communications Inc. and Vodafone Group
PLC. The
suits address technologies now used by Verizon to transmit television to
wireless users over cellular networks and the simultaneous transmission of
analog and digital signals within the same bandwidth. On July 27 and September
12, 2006, these cases were transferred to the United States District Court for
the District of New Jersey.

  (b)
    On June 2, 2006, we filed two separate complaints against Alltel Corp. in
    United States District Court in the Southern District of Florida, in which
    we assert Alltel is infringing two of our patents. The suits address technologies
    now used by Alltel to transmit television to wireless users over cellular
    networks and the simultaneous transmission of analog and digital signals within
    the same bandwidth. In October 2006, these two cases were consolidated.

11

4.
Business Segment Information

The
following table sets forth the Companys financial performance by reportable
operating segment for the three and nine months ended September 30, 2006 and
2005. F&B Güdtfood and Zargis Medical are included in the consolidated
financial statements of the Company since May 6, 2002 and February 28, 2003,
respectively, the dates of acquisition of majority interests. The development
of Wibiki commenced during the quarter ended June 30, 2005, however, operations
in that quarter were not material.

Three months ended September 30, 2006F&B

Zargis

Wibiki

Corporate
  and other

TotalsRevenues from
  external customers

$
210,179

$


$


$


$
210,179Depreciation and
  amortization


35,868


3,957


0


134,447


174,272Operating loss


(169,512
)

(301,425
)

(233,193
)

(512,175
)

(1,216,305
)Investment
  income/(loss)


0


4


0


232,456


232,460Other intangible
  assets


0


45,492


0


103,192


148,684Fixed assets


617,484


24,757


0


21,612


663,853Total assets


811,403


38,560


0


17,342,172


18,192,135Three months ended September 30, 2005F&B

Zargis

Corporate
  and other

TotalsRevenues from
  external customers

$
293,768

$
0

$
0

$
293,768Depreciation and
  amortization


22,525


3,240


203,708


229,473Operating loss


(124,708
)

(279,200
)

(995,050
)

(1,398,958
)Investment
  income/(loss)


337


22


151,108


151,467Other intangible
  assets


0


305,672


515,960


821,632Fixed assets


466,730


20,020


41,561


528,311Total assets


649,919


514,751


23,664,632


24,829,302Nine months ended September 30, 2006F&B

Zargis

Wibiki

Corporate
  and other

TotalsRevenues from
  external customers

$
637,980

$


$


$
338

$
638,318Depreciation and
  amortization


118,871


9,605


0


489,189


617,665Operating loss


(798,444
)

(880,234
)

(525,788
)

(2,551,358
)

(4,755,824
)Investment
  income/(loss)


1,026


62


0


267,021


268,109Nine months ended September 30, 2005F&B

Zargis

Corporate
  and other

TotalsRevenues from
  external customers

$
802,854

$
0

$
640

$
803,494Depreciation and
  amortization


70,296


11,428


611,125


692,849Operating loss


(442,678
)

(962,821
)

(2,754,160
)

(4,159,659
)Investment
  income/(loss)


818


60


431,842


432,720The
Company has no foreign operations. During the three and nine months ended
September 30, 2006 and 2005, the Company did not have sales to any individual
customer greater than 10% of total Company revenues. The Companys accounting
policies for segments are the same as those described in Note 1.

12

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

The
following discussion and analysis of financial condition and results of
operations should be read in conjunction with the corresponding discussion and
analysis included in the Companys Report on Form 10-K for the year ended
December 31, 2005.

Cautionary
Statement Regarding Forward-Looking Information

This
Managements Discussion and Analysis of Financial Condition and Results of Operations
and other sections of this Form 10-Q contain forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended (the Exchange Act). These
statements appear in a number of places in this Form 10-Q and include
statements regarding the intent, belief or current expectations of the Company
or its officers with respect to, among other things, the ability of the Company
to make capital expenditures, the ability to incur additional debt, as
necessary, to service and repay such debt, if any, as well as other factors
that may effect the Companys financial condition or results of operations.
Forward-looking statements may include, but are not limited to, projections of
revenues, income or losses, capital expenditures, plans for future operations,
financing needs or plans, compliance with covenants in loan agreements, plans
for liquidation or sale of assets or businesses, plans relating to products or
services of the Company, assessments of materiality, predictions of future
events, and the ability to obtain additional financing, including the Companys
ability to meet obligations as they become due, and other pending and possible
litigation, as well as assumptions relating to the foregoing. All statements in
this Form 10-Q regarding industry prospects and the Companys financial
position are forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. The Company undertakes no
obligation to publicly release the result of any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

Business
Activities

Speedus
Corp. is a holding company that owns significant equity interests in diverse
businesses. We seek business opportunities across all industries for potential
transactions and relationships in which we can apply our current resources and
management strengths. The companies that we target, either public or privately
held, will be seeking growth or restructuring capital to pursue near term
business objectives in demonstrated markets. We will continue to pursue
opportunities involving our expertise in the medical device and wireless
markets, as well as those areas involving our broadband assets as attractive
opportunities present themselves.

We
have co-invested with Siemens Corporate Research, Inc., a subsidiary of Siemens
Corporation, in Zargis Medical Corp. to develop advanced diagnostic decision
support products and services for primary care physicians, pediatricians,
cardiologists and other healthcare professionals. Zargis Acoustic Cardioscan®
(Cardioscan®), Zargis core product, is the first and only FDA-authorized
computer-assisted medical device designed to support physicians in analyzing
heart sounds for the identification of suspected systolic and diastolic
murmurswhich are a potential sign of heart disease. We own 90% of F&B
Güdtfood Holding Corp., the creator and operator of the original Eurocentric
chic and quick café, which is operating two stores in Manhattan. We own a
portfolio of patents that allow for high-speed wireless communications. We also
own fixed wireless spectrum in the New York City metropolitan area that we may
commercialize in the future to support high-speed, or broadband, Internet
access service. For additional information on each of our business segments,
see the discussions below and Condensed Notes to Consolidated Financial
Statements (unaudited)Note 4, Business Segment Information.

Zargis
Medical Corp.In January 2001, we co-invested with Siemens Corporate Research, Inc., a subsidiary of
Siemens Corporation, in Zargis Medical Corp. to develop non-invasive,
diagnostic support solutions that automatically analyze acoustical data from a
patient to determine physiologically significant features useful in medical
diagnosis. The development of Zargis patented technology is a pioneering
effort in medicine which uses advanced signal processing algorithms deployed on standard
computer platforms. The first Zargis device, Cardioscan, received
its initial FDA authorization in May 2004 and additional authorizations in
September 2005 and March 2006. Cardioscan is currently being tested by a small
group of physicians during general medical examinations and physicals to
help detect and analyze suspected heart murmurs which could be a sign of
valvular and congenital heart disease. According
to the National Center for Health Statistics, the number of general medical examinations,
administered in the US totaled 64 million in 2000 alone. Zargis is currently
researching, and conducting trials on, additional noninvasive diagnostic
support tools that process acoustical data from the body in order to provide an
accurate and intelligible assessment of a patients health. These assessments
may be used by physicians and other healthcare providers to assist in the early
identification or monitoring of heart, lung, vascular and other conditions and
to provide better patient treatment.

Major
next steps remaining for Zargis include continuing market trials and clinical
trials for new applications of the Zargis technology and the formation of
strategic partnerships designed to support product commercialization.

In
February 2003, we acquired a controlling interest in Zargis Medical. At
September 30, 2006, as a result of continued investment, our ownership interest
was approximately 80%.

13

F&B
Güdtfood. We own 90%
of F&B Güdtfood, the creator and operator of the original Eurocentric chic
and quick café, which is operating two stores in Manhattan. The acquisition
price was $3,500,000 in May 2002. In February 2003, we reduced our cash
investment in F&B Güdtfood and received $1,775,000 while maintaining our
original 51% interest. In December 2003, as a result of renegotiation, our
interest increased to 80% without an additional investment. As a result of
certain milestones not having been met, in 2005 our interest increased to 90%.
We expect that F&B Güdtfood will begin selling F&B Güdtfood franchises
through its wholly owned subsidiary, F&B Güdtfood Franchise Corp. We have
also entered into a management services contract with F&B Güdtfood that
will result in direct revenues to us although these revenues will be eliminated
on our consolidated financial statements.

Intellectual
Property.We have accumulated a portfolio of patents
that teach and cover the improvement of high-speed wireless communication
systems to allow greater information content, reliability, clarity, more
efficient use of licensed spectrum as compared to prior systems and other
advances. We have 6 domestic patents with expiration dates ranging from 2007
through 2017, with approximately 46 international counterparts in 28 countries.
We also have 4 domestic patents pending and 14 patents pending in an additional
3 countries. Certain wireless communications systems may employ a number of
different combinations of our patented technology to maximize operational and
spectrum efficiency. While we believe that there is great value in our patented
technologies, it is a lengthy and expensive process to investigate and pursue
licensing/patent infringement cases. We are evaluating a strategy for the
utilization of these patents in the future, which may include pursuit of
licensing or development of other strategic opportunities with users of the
underlying technology. We have licensed technology in the past, both
domestically and internationally, but are not currently receiving any license
fees.

On
May 11, 2006, we filed two separate complaints against Cellco
Partnership (d/b/a Verizon Wireless) in United States District Court in the
Southern District of Florida, in which we assert Verizon Wireless is infringing
two of our patents. Verizon Wireless is a joint venture of Verizon
Communications Inc. and Vodafone Group
PLC. The
suits address technologies now used by Verizon to transmit television to
wireless users over cellular networks and the simultaneous transmission of
analog and digital signals within the same bandwidth. On July 27 and September
12, 2006, these cases were transferred to the United States District Court for
the District of New Jersey.

  On
    June 2, 2006, we filed two separate complaints against Alltel Corp. in United
    States District Court in the Southern District of Florida, in which we assert
    Alltel is infringing two of our patents. The suits address technologies now
    used by Alltel to transmit television to wireless users over cellular networks
    and the simultaneous transmission of analog and digital signals within the
    same bandwidth. In October 2006, these two cases were consolidated.

Copies
of publicly-available filings in connection with these law suits are available
on our web site at http://speedus.com/patent-infringement-litigation.php.

Wibiki.
During 2005, our
technology resources and experience in wireless broadband enabled us to
conceive a new software-based wireless network that leverages existing Wi-Fi
infrastructures to reduce cost, complexity and risk for users when accessing
the Internet wirelessly. We named that network Wibiki. Wibiki offers free beta
software designed to improve access to free Wi-Fi, including streamlining
registration and security configuration of Wi-Fi clients and routers. Wibiki
software for laptops and routers can be downloaded from www.wibiki.com.
Wibikis business model will employ a user opt-in advertising service we
call AdChooser to generate revenues that keep Wibiki services free to users.

Local
Multipoint Distribution Service (LMDS) license.We have an FCC commercial operating license,
awarded to us in recognition of our efforts in developing and deploying LMDS
technology and for spearheading its regulatory approval at the FCC, which
covers 150 MHz of spectrum in the New York City area. The license has been
renewed as a standard LMDS license through February 1, 2006. Renewal of the
license has been applied for and is currently pending. Under FCC authorization,
the license includes an additional 150 MHz of spectrum until the first Ka band
satellite is launched, an event which is not currently determinable. The
license provides that the spectrum may be used for a wide variety of fixed
wireless purposes, including wireless local loop telephony, high-speed Internet
access and two-way teleconferencing.

We
will not commence a full marketing effort using our LMDS technology until new
LMDS equipment becomes commercially available with cost and performance that
allow implementation of an economically viable business model. We cannot
determine when this will occur and this equipment may never be available to us
on this basis.

Other.We have invested a
portion of our assets in a portfolio of marketable securities consisting of
publicly traded equity securities. We have also invested a portion of our
assets in equity and debt instruments of non-publicly held companies. We have
in the past and may in the future sell publicly traded equity securities we do
not own in anticipation of declines in the fair market values of these
securities.

We
have generated operating losses and negative operating cash flows since our
inception and expect to continue to do so in the near future.

14

Critical Accounting Policies

Our
discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements. The preparation of those
financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of operating revenues and expenses during
the reporting periods. Actual results could differ from those estimates. For a description of all of our accounting
policies, see Note 1 to our consolidated financial statements included in
this Form 10-Q and Note 2 to our consolidated financial statements included in
our 2005 Form 10-K. However, we believe the following critical
accounting policies affect the more significant judgments and estimates used in
the preparation of our consolidated financial statements.

Financial
instruments. Our financial instruments consist primarily of
cash equivalents, United States treasury bills and marketable securities and
may include securities sold and not purchased. The carrying value of cash
equivalents approximates market value since these highly liquid, interest
earning investments are invested in money market funds. Marketable securities
consist of publicly traded equity securities classified as trading securities
and are recorded at fair market value, i.e., closing prices quoted on
established securities markets. Securities sold and not repurchased are also
carried at the fair market value of the securities. Significant changes in the
market value of securities that we invest in could have a material impact on
our financial position and results of operations.

We
have also invested in equity and debt instruments of non-publicly held
companies and account for them under the cost method since we do not have the
ability to exercise significant influence over operations. We monitor these
investments for other than temporary impairment by considering current factors
including economic environment, market conditions, operational performance and
other specific factors relating to the business underlying the investment, and
record reductions in carrying values when necessary.

Long-lived
assets. Long-lived assets, including fixed assets and other
intangibles, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of any such asset may not be
recoverable through estimated future cash flows from that asset. The estimate
of cash flow is based upon, among other things, certain assumptions about
expected future operating performance. Specifically, we own broadband assets,
included in intangible assets, which had a carrying value of $0.1 million at
September 30, 2006 and currently do not generate significant revenues or cash
flows. However, as of December 31, 2005, we estimated that, based upon our
review of historical transactions and other factors, the fair value of certain
patents that have no carrying value on our books would generate sufficient cash
to fully realize our assets described above as of December 31, 2005. These
estimates may differ from actual results due to, among other things,
technological changes, economic conditions, changes to our business model or
changes in our operating performance.

Contingencies.
We account for contingencies in accordance with Statement of Financial
Accounting Standards No. 5, Accounting for Contingencies. SFAS No. 5 requires
that we record an estimated loss when information available prior to issuance
of our financial statements indicates that it is probable that an asset has
been impaired or a liability has been incurred at the date of the financial
statements and the amount of the loss can be reasonably estimated. Accounting
for contingencies such as environmental, legal and income tax matters requires
us to use our judgment.

Three and Nine Months Ended September 30, 2006 Compared to Three
and Nine Months Ended September 30, 2005

Revenues
decreased $165,000 from $803,000 for the nine months ended September 30, 2005
to $638,000 for the nine months ended September 30, 2006 and decreased $84,000
from $294,000 for the three months ended September 30, 2005 to $210,000 for the
three months ended September 30, 2006. These decreases are primarily a result
of a reduction in menu prices at the Companys first store and the temporary
closing of the second store for renovations.

Selling,
general and administrative expenses increased $241,000 from $2,921,000 for the
nine months ended September 30, 2005 to $3,162,000 for the nine months ended
September 30, 2006 and decreased $282,000 from $981,000 for the three months
ended September 30, 2005 to $699,000 for the three months ended September 30,
2006. The increase for the nine month period is primarily a result of increases
in stock based compensation and legal expenses in connection with patent
infringement litigation, net of a decrease as a result of the receipt of a
withholding tax refund. The decrease for the three month period is primarily a
result of the withholding tax refund.

Research
and development expenses increased $298,000 from $1,086,000 for the nine months
ended September 30, 2005 to $1,384,000 for the nine months ended September 30,
2006 and increased $93,000 from $389,000 for the three months ended September
30, 2005 to $482,000 for the three months ended September 30, 2006. This
increase is primarily a result of new wireless initiatives by
the Company.

Depreciation
and amortization decreased $75,000 from $693,000 for the nine months ended
September 30, 2005 to $618,000 for the nine months ended September 30, 2006 and
decreased $55,000 from $229,000 for the three months ended September 30, 2005
to $174,000 for the three months ended September 30, 2006. These decreases are
primarily a result of a decrease in amortization of medical technology from the
completion of amortization of early tranches of medical technology resulting
from the Zargis acquisition, net of an increase as a result of renovations to
one of the F&B Restaurant stores.

15

Investment
income decreased $165,000 from a net gain of $433,000 for the nine months ended
September 30, 2005 to a net gain of $268,000 for the nine months ended
September 30, 2006 and increased $81,000 from a net gain of $151,000 for the
three months ended September 30, 2005 to a net gain of $232,000 for the three
months ended September 30, 2006. Realized gains increased $314,000 from net
losses of $175,000 for the nine months ended September 30, 2005 to net gains of
$139,000 for the nine months ended September 30, 2006 and increased $59,000
from net losses of $20,000 for the three months ended September 30, 2005 to net
gains of $39,000 for the three months ended September 30, 2006. Unrealized
losses increased $641,000 from net gains of $171,000 for the nine months ended
September 30, 2005 to net losses of $470,000 for the nine months ended
September 30, 2006 and decreased $18,000 from net losses of $56,000 for the
three months ended September 30, 2005 to net losses of $38,000 for the three
months ended September 30, 2006. Interest income increased $161,000 from
$437,000 for the nine months ended September 30, 2005 to $598,000 for the nine
months ended September 30, 2006 and increased $3,000 from $227,000 for the
three months ended September 30, 2005 to $230,000 for the three months ended
September 30, 2006. These increases in interest income, net of the effect of
interest in the amounts of $37,000 during the three and nine months ended
September 30, 2006 and $80,000 during the three and nine months ended September
30, 2005 received in connection with tax refunds and decreases as a result of a
lesser amount of funds available for short-term investment, are primarily the
result of increased interest rates. These investment income amounts will
fluctuate based upon changes in the market value of the underlying investments,
overall market conditions and the amount of funds available for short-term
investment and are not necessarily indicative of the results that may be
expected for any future periods.

Minority
interest represents the interest of minority stockholders in the losses of
F&B Güdtfood and Zargis Medical since the dates of acquisition of a
majority interest. Through the three and nine months ended September 30, 2006,
F&B Güdtfood and Zargis
Medical continued to generate losses which, during 2005, reduced the minority
interest balance to zero. As result, the Company is consolidating 100% of the
losses for these entities and continues to fund their operations with
intercompany loans or additional investment, which are eliminated in
consolidation.

Liquidity and Capital Resources

The
Company has recorded operating losses and negative operating cash flows in each
year of its operations since inception.

Net
cash used in operating activities was $1,966,000 for the nine months ended
September 30, 2006 compared to net cash used in operating activities of
$3,634,000 for the nine months ended September 30, 2005. This net decrease in
cash used in operating activities is primarily the result of the sale of
marketable securities, net of an increase in cash used to fund an increase in
net loss.

Net
cash used in investing activities was $5,370,000 for the nine months ended September 30,
2006 compared to net cash provided by investing activities of $2,093,000 for
the nine months ended September 30, 2005. This net increase in cash used in
investing activities is primarily the result of a $6,000,000 decrease in
maturities of United States Treasury bills and an increase in property and
equipment additions in the amount of $366,000 during the nine months ended
September 30, 2006.

Net
cash used in financing activities was $131,000 for the nine months ended
September 30, 2006 compared to net cash used in financing activities of
$204,000 for the nine months ended September 30, 2005. This net decrease in
cash used in financing activities is primarily a result of a decrease in
repurchases of treasury stock and a decrease in the proceeds received from the
exercise of stock options.

At
September 30, 2006, the Companys future minimum lease payments due under
non-cancelable leases aggregated $1,731,000. $110,000 of this amount is due
during the remainder of 2006. $444,000, $382,000, $233,000 and $138,000 of this
amount is due during the years ending December 31, 2007, 2008, 2009 and 2010,
respectively, and the balance is payable thereafter. In addition, in connection
with a license agreement to which the Company is a party, a termination payment
will be payable by the Company in the amount of $500,000, $300,000 or $200,000
if the license agreement is terminated by the Company before September 2007,
September 2009 or September 2011, respectively.

The
Company believes that it has sufficient liquidity to finance its current level
of operations and expected capital requirements through the next twelve months.
However, the Company does not expect to have earnings from operations until
such time as it substantially increases its customer base and/or forms a
strategic alliance for use of its capabilities in the future. We cannot predict
when this will occur. We have no material non-cancelable commitments and the
amount of future capital funding requirements will depend on a number of
factors that we cannot quantify, including the success of our business, the
extent to which we expand our high-speed Internet service if suitable equipment
becomes available and the types of services we offer, as well as other factors
that are not within our control, including competitive conditions, government
regulatory developments and capital costs. The lack of additional capital in
the future could have a material adverse effect on the Companys financial
condition, operating results and prospects for growth.

We
have invested a portion of our assets in a portfolio of marketable securities
consisting of publicly traded equity securities. We purchase these securities
in anticipation of increases in the fair market values of the securities. We
have in the past and may in the future also sell publicly traded equity
securities we do not own in anticipation of declines in the fair market values
of these securities. When we sell securities that we do not own, we must borrow
the securities we sold in order to deliver them and settle the trades.
Thereafter, we must buy the securities and deliver them to the lender of the
securities. Our potential for loss on these transactions is unlimited since the
value of the underlying security can keep increasing.

16

Off-Balance Sheet Arrangements

The
Company does not have any off-balance sheet arrangements.

Recent Accounting Pronouncements

There
have been no recent accounting pronouncements which upon future adoption would
have an effect on the Companys results of operations or financial position,
except as disclosed below.

In
September 2006, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 108. SAB 108 provides interpretive guidance on how the effects of
the carryover or reversal of prior year misstatements should be considered in
quantifying a potential current year misstatement. SAB 108 is effective for
fiscal years ending after November 15, 2006, and early application is
encouraged. The Company does not expect adoption of SAB 108 to have a material
effect on its results of operations or financial position.

In
September 2006, the Financial Accounting Standards Board issued
FASB 157, Fair Value Measurements. FASB 157 defines fair value,
establishes a framework for measuring fair value in generally accepted accounting
principles and expands disclosures about fair value measurements. FASB 157 is
effective for fiscal years beginning after November 15, 2007 and interim
periods within those fiscal years. The Company does not expect adoption of FASB
No. 157 to have a material effect on its results of operations or financial
position.

In
June 2006, the Financial Accounting Standards Board issued Interpretation No.
48, Accounting for Uncertainty in
Income Taxes - an interpretation of FASB Statement No. 109. FIN 48 clarifies
the accounting for uncertainty in income taxes recognized in an enterprises
financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes and
prescribes that a company should use a more-likely-than-not recognition
threshold based on the technical merits of the tax position taken. Tax
positions that meet the more-likely-than-not recognition threshold should be
measured in order to determine the tax benefit to be recognized in the
financial statements. FIN 48 is effective for fiscal years beginning after
December 15, 2006. The Company does not expect adoption of FIN 48 to have a
material effect on its results of operations and financial condition.

ITEM 3. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The
Companys financial instruments at September 30, 2006 consist primarily of cash
equivalents, which are subject to interest rate risk, and marketable securities
and United States Treasury bills, which are subject to price risk.

As
part of our overall investment strategy, we invest in publicly traded equity
securities. We purchase these securities in anticipation of increases in the
fair market values of the securities. We have in the past and may in the future
also sell publicly traded equity securities that we do not own in anticipation
of declines in the fair market values of the securities. When we sell
securities that we do not own, we must borrow the securities we sold in order
to deliver them and settle the trades. Thereafter, we must buy the securities
and deliver them to the lender of the securities. Our potential for loss on
these transactions is unlimited since the value of the underlying security can
keep increasing which could have a material adverse effect on the Companys
consolidated financial statements.

The
carrying value of cash equivalents and United States Treasury bills
approximates market value since these highly liquid, interest earning
investments are invested in money market funds and short-term government
securities, respectively. The Companys investment in marketable securities
consists of publicly traded equity securities classified as trading securities
and are recorded at fair market value. Securities sold and not repurchased are
carried at the fair market value of the securities.

ITEM 4. CONTROLS AND PROCEDURES

Management
of the Company, including the Chief Executive Officer and the Chief Financial
Officer, evaluated the effectiveness of the design and operation of the
Companys disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934)
as of the end of the period covered by this report. Based upon that evaluation,
the Companys Chief Executive Officer and the Chief Financial Officer concluded
that the Companys disclosure controls and procedures were effective as of the
end of the period covered by this report.

There
have not been any changes in the Companys internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act) during the fiscal quarter ended September 30, 2006 that have
materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.

17

PART II. OTHER INFORMATION

ITEM 1.
LEGAL PROCEEDINGSNote 3 to the accompanying consolidated financial
  statements is incorporated herein by reference.ITEM 1A.
RISK FACTORSNo material changes.ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES
  AND USE OF PROCEEDSStock repurchase program:Period

(a) Total
  Number
  of Shares (or
  Units) Purchased

(b)
  Average Price
  Paid per Share (or
  Unit)

(c) Total
  number
  of Shares (or
  Units) Purchased
  as Part of Publicly
  Announced Plans
  or Programs

(d)
  Maximum
  number (or
  Approximate
  Dollar Value) of
  Shares (or Units)
  that May Yet Be
  Purchased Under
  the Plans or
  Programs (1)July 1, 2006 - July 31, 2006

0


$





0


$


491,388August 1, 2006 - August 31, 2006

0


$








0

$


491,388September 1, 2006 - September 30, 2006

6,560


$


1.14


6,560


$


483,930Total

6,560


$


1.14


6,560


$


483,930(1) On November 21, 2000, the Company announced that
  its Board of Directors had approved a stock repurchase program for the
  repurchase of up to $1,000,000 of Company stock through open market as well
  as privately negotiated transactions. Thereafter, the Board of Directors
  approved increases to the program in the aggregate amount of $5,500,000.ITEM 3.
DEFAULTS UPON SENIOR SECURITIESNone.ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF
  SECURITY HOLDERSNone.ITEM 5.
OTHER INFORMATIONNone.ITEM 6.
EXHIBITSExhibit number 31.1
Certification of Chief Executive Officer Pursuant to
  Rule 13a-14 of the Securities Exchange Act of 1934, as Adopted Pursuant to
  Section 302 of The Sarbanes-Oxley Act of 2002.Exhibit number 31.2
Certification of Chief Financial Officer Pursuant to
  Rule 13a-14 of the Securities Exchange Act of 1934, as Adopted Pursuant to
  Section 302 of The Sarbanes-Oxley Act of 2002.Exhibit number 32.1
Certification of Chief Executive Officer Pursuant to
  18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The
  Sarbanes-Oxley Act of 2002.Exhibit number 32.2
Certification of Chief Financial Officer Pursuant to
  18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The
  Sarbanes-Oxley Act of 2002.18

SIGNATURES

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

SPEEDUS CORP.Date: November 14, 2006
By:
/s/ Shant S. HovnanianShant S. HovnanianChairman of the Board, President and Chief Executive
  OfficerDate: November 14, 2006
By:
/s/ Thomas M. FinnThomas M. FinnTreasurer and Chief Financial and Accounting Officer19