|                                                                                   
|-----------------------------------------------------------------------------------
|UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
    FORM 10-Q

|                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2007
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          | (I.R.S. Employer Identification No.)
|incorporation or organization)           |                                     
|                                         |                                     
|9 Desbrosses Street, Suite 402           |                                     
|New York, 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.  YesþNoo
| |                                                                                                                                                                                                                                                                                                                                                                              
| | 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 fileroAccelerated fileroNon-accelerated filerþ
|----------------------------------------------------------------
|                                                                

| | Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
    Act). YesoNoþ           
| | ---------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                        
| | The number of outstanding shares of the registrants common stock, par value $.01 per share, as
    of November 9, 2007 was 15,967,640.

|
|



|**SPEEDUS CORP.
      INDEX TO FORM 10-Q**
|------------------------------------------
|                                          

|                                | **PART I  FINANCIAL INFORMATION**                                                                                     | **Page** | 
|------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | -------- | 
|                                |                                                                                                                        |          | 
|**Item 1.**                     | **Financial Statements**                                                                                               |          | 
|                                |                                                                                                                        |          | 
|                                | Consolidated Balance Sheets (unaudited) as of September 30, 2007      and December 31, 2006                            | 3        | 
|                                |                                                                                                                       
|                                | Consolidated Statements of Operations (unaudited) for the      Three and Nine Months Ended September 30, 2007 and 2006 | 4        | 
|                                |                                                                                                                        |          | 
|                                | Consolidated Statements of Cash Flows (unaudited) for the      Three and Nine Months Ended September 30, 2007 and 2006 | 5        | 
|                                |                                                                                                                        |         
|                                | Condensed Notes to Consolidated Financial Statements (unaudited)                                                       | 6-9     
|****                            | ****                                                                                                                  
|**Item 2.**                     | **Managements Discussion and Analysis of Financial
      Condition and Results of Operations**                        | 10-15   
|                                |                                                                                                                        |          | 
|**Item 3.**                     | **Quantitative and Qualitative Disclosures About Market Risk**                                                         | 15       | 
|                                |                                                                                                                        |          | 
|**Item 4T.**                    | **Controls and Procedures**                                                                                            | 15       | 
|                                |                                                                                                                       
|**PART II  OTHER INFORMATION** |                                                                                                                       
|                                |                                                                                                                        |          | 
|**Item 1.**                     | **Legal Proceedings**                                                                                                  | 16       | 
|                                |                                                                                                                        |          | 
|**Item 1A.**                    | **Risk Factors**                                                                                                       | 16       | 
|                                |                                                                                                                        |          | 
|**Item 2.**                     | **Unregistered Sales of Equity Securities and Use of Proceeds**                                                        | 16       | 
|                                |                                                                                                                        |          | 
|**Item 3.**                     | **Defaults Upon Senior Securities**                                                                                    | 16       | 
|                                |                                                                                                                        |          | 
|**Item 4.**                     | **Submission of Matters to a Vote of Security Holders**                                                                | 16       | 
|                                |                                                                                                                        |          | 
|**Item 5.**                     | **Other Information**                                                                                                  | 16       | 
|                                |                                                                                                                        |          | 
|**Item 6.**                     | **Exhibits**                                                                                                           | 16       | 
|                                |                                                                                                                        |         
|**Signature Page**              | 17                                                                                                                     |         
|                                |                                                                                                                       

|**Exhibit 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   |  | 18 | 
|---------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -- | 
|                 |                                                                                                                                                                                     | 
|**Exhibit 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 |  | 19 | 
|                 |                                                                                                                                                                                     | 
|**Exhibit 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                                   |  | 20 | 
|                 |                                                                                                                                                                                     | 
|**Exhibit 32.2** | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as AdoptedPursuant to Section 906 of The Sarbanes-Oxley Act of 2002                                    |  | 21 | 

|2
|-



|**SPEEDUS CORP. CONSOLIDATED BALANCE SHEETS
      (unaudited)**
|---------------------------------------------------------------
|                                                               

|                                                                                                                                |  | **September 30,
      2007** |             | **December 31,
      2006** |  
|------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ----------- | --------------------------- | -
|                                                                                                                                |  |                              |             |                            
|                                                                                                                               
|                                                                                                                               
|**ASSETS**                                                                                                                      |  |                              |             |                             |  
|Current assets:                                                                                                                 |  |                              |             |                             |  
|Cash and cash equivalents                                                                                                       |  | $                            | 4,851,678   |                             | $
|United States Treasury bills                                                                                                    |  |                              | 5,975,190   |                             |  
|Marketable securities                                                                                                           |  |                              | 2,139,548   |                             |  
|Prepaid expenses and other                                                                                                      |  |                              | 123,211     |                             |  
|                                                                                                                                |  |                              |             |                            
|Total current assets                                                                                                            |  |                              | 13,089,627  |                             |  
|Property and equipment, net of accumulated
  depreciation of $567,289 and $444,972                                              |  |                              | 439,190     |                             |  
|Other intangible assets, net of accumulated
  amortization of $1,125,928 in 2006                                                |  |                              |            |                             |  
|Other investments                                                                                                               |  |                              | 800,000     |                             |  
|Other assets                                                                                                                    |  |                              | 83,127      |                             |  
|                                                                                                                                |  |                              |             |                            
|Total assets                                                                                                                    |  | $                            | 14,411,944  |                             | $
|                                                                                                                                |  |                              |             |                            
|                                                                                                                               
|**LIABILITIES AND STOCKHOLDERS EQUITY**                                                                                        |  |                              |             |                             |  
|Current liabilities:                                                                                                            |  |                              |             |                             |  
|Accounts payable                                                                                                                |  | $                            | 61,191      |                             | $
|Accrued liabilities                                                                                                             |  |                              | 1,156,759   |                             |  
|                                                                                                                                |  |                              |             |                            
|Total current liabilities                                                                                                       |  |                              | 1,217,950   |                             |  
|                                                                                                                               
|Commitments and Contingencies                                                                                                   |  |                              |             |                             |  
|                                                                                                                               
|Stockholders equity:                                                                                                           |  |                              |             |                             |  
|Common stock ($.01 par value; 50,000,000
      shares authorized; 21,750,174
      shares issued)                               |  |                              | 217,502     |                             |  
|Preferred stock ($.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                                                                                                      |  |                              | 91,569,765  |                             |  
|Treasury stock (at cost; 5,782,534 and 5,780,884 shares)                                                                        |  |                              | (6,085,078  | )                           |  
|Accumulated deficit                                                                                                             |  |                              | (72,508,195 | )                           |  
|                                                                                                                                |  |                              |             |                            
|Stockholders equity                                                                                                            |  |                              | 13,193,994  |                             |  
|                                                                                                                                |  |                              |             |                            
|Total liabilities and stockholders equity                                                                                      |  | $                            | 14,411,944  |                             | $
|                                                                                                                                |  |                              |             |                            

|                                                                                       
|---------------------------------------------------------------------------------------
|The 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,** |  
|------------------------------------------------------------------ |  | ------------------------------------ | ---------- | ----------------------------------- | -
|                                                                   |  |                                      |            |                                     |  
|                                                                   |  | **2007**                             |            | **2006**                            |  
|                                                                   |  |                                      |            |                                     |  
|                                                                  
|                                                                  
|Revenues                                                           |  | $                                    | 191,473    |                                     | $
|                                                                   |  |                                      |            |                                     |  
|                                                                  
|Expenses:                                                          |  |                                      |            |                                     |  
|Selling, general and administrative                                |  |                                      | 885,302    |                                     |  
|Research and development                                           |  |                                      | 524,296    |                                     |  
|Depreciation and amortization                                      |  |                                      | 51,340     |                                     |  
|Cost of sales                                                      |  |                                      | 89,912     |                                     |  
|                                                                   |  |                                      |            |                                     |  
|Total operating expenses                                           |  |                                      | 1,550,850  |                                     |  
|                                                                   |  |                                      |            |                                     |  
|                                                                  
|Operating loss                                                     |  |                                      | (1,359,377 | )                                   |  
|                                                                  
|Investment income                                                  |  |                                      | 152,674    |                                     |  
|                                                                   |  |                                      |            |                                     |  
|                                                                  
|Net loss                                                           |  | $                                    | (1,206,703 | )                                   | $
|                                                                   |  |                                      |            |                                     |  
|                                                                  
|Per share:                                                         |  |                                      |            |                                     |  
|Loss per common share - basic and diluted                          |  | $                                    | (0.08      | )                                   | $
|                                                                   |  |                                      |            |                                     |  
|Weighted average common shares
    outstanding - basic and diluted |  |                                      | 15,967,640 |                                     |  
|                                                                   |  |                                      |            |                                     |  

|                                                                                       
|---------------------------------------------------------------------------------------
|The 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,** |            
|--------------------------------------------------------------------------------- |  | ----------------------------------- | -----------
|                                                                                  |  |                                     |            
|                                                                                  |  | **2007**                            |            
|                                                                                  |  |                                     |            
|                                                                                 
|                                                                                 
|Cash flows from operating activities:                                             |  |                                     |            
|Net loss                                                                          |  | $                                   | (3,011,837 
|Adjustments to reconcile net loss to
      net cash used in operating activities: |  |                                     |            
|Depreciation and amortization                                                     |  |                                     | 156,433    
|Unrealized investment (gains)/losses                                              |  |                                     | (347,315   
|Stock based compensation                                                          |  |                                     | 105,646    
|Changes in operating assets and liabilities:                                      |  |                                     |            
|Marketable securities                                                             |  |                                     | (1,438,222 
|Prepaid expenses and other                                                        |  |                                     | 20,443     
|Other assets                                                                      |  |                                     | (1,390     
|Accounts payable                                                                  |  |                                     | (1,614     
|Accrued liabilities                                                               |  |                                     | 185,704    
|                                                                                  |  |                                     |            
|                                                                                 
|Net cash used in operating activities                                             |  |                                     | (4,332,152 
|                                                                                  |  |                                     |            
|                                                                                 
|Cash flows from investing activities:                                             |  |                                     |            
|Property and equipment additions                                                  |  |                                     | (33,679    
|United States Treasury bills:                                                     |  |                                     |            
|Purchases                                                                         |  |                                     | (18,984,940
|Maturities                                                                        |  |                                     | 18,000,000 
|                                                                                  |  |                                     |            
|                                                                                 
|Net cash used in investing activities                                             |  |                                     | (1,018,619 
|                                                                                  |  |                                     |            
|                                                                                 
|Cash flows from financing activities:                                             |  |                                     |            
|Repurchase of stock                                                               |  |                                     | (1,718     
|                                                                                  |  |                                     |            
|                                                                                 
|Net cash used in financing activities                                             |  |                                     | (1,718     
|                                                                                  |  |                                     |            
|                                                                                 
|Net decrease in cash and cash equivalents                                         |  |                                     | (5,352,489 
|                                                                                 
|Cash and cash equivalents, beginning of period                                    |  |                                     | 10,204,167 
|                                                                                  |  |                                     |            
|                                                                                 
|Cash and cash equivalents, end of period                                          |  | $                                   | 4,851,678  
|                                                                                  |  |                                     |            

|                                                                                       
|---------------------------------------------------------------------------------------
|The accompanying notes are an integral part of these consolidated financial statements.

|5
|-



|SPEEDUS CORP.
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 2006 audited consolidated financial statements
and notes thereto on Form 10-K.
Operating
results for the three and nine months ended September 30, 2007 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2007.
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 sheet and statements
of operations. Through the quarter ended September 30, 2007, F&B Güdtfood and Zargis Medical
continued to generate losses which, during 2005, reduced the minority interest balance to zero. As
a 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.
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.
Cash and Cash Equivalents
The
Company considers all highly liquid interest earning investments with original maturities of three
months or less to be cash equivalents. At September 30, 2007 and December 31, 2006, cash equivalents
consisted of money market funds.
United States Treasury bills
United States Treasury bills are classified as held-to-maturity securities and are carried at amortized
cost.
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, 2007 and December 31, 2006, marketable securities consisted of publicly traded equity
securities which were recorded at fair market value. Their original cost was $2,385,000 and $887,000,
unrealized losses since acquisition were $245,000 and $533,000 and the carrying value was $2,140,000
and $354,000, respectively. At September 30, 2007, based upon the fair market value of these securities,
19% was invested in technology companies and 81% was invested in insured bonds.
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, 2007.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6
|-



|Other investments consist of:
|-----------------------------
|                             

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | **September 30,
    2007** |         | **December 31,
    2006** |  
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------- | ------------------------- | -
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                            |        
| | (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 expiring in 2009 to 
      purchase 375,000 shares of common stock at $.40 per
      share. This investment was acquired in 2004.                                                                             |  | $                          | 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 |                           |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
| | (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 |                           |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                            |        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | $                          | 800,000 |                           | $
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                            |        

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Securities Sold But Not Purchased
The
Company has in the past and may in the future 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 amounts shown on the balance sheet as Securities sold and not purchased represent
the value of these securities at fair market value. At September 30, 2007 and December 31, 2006,
there were no securities sold and not purchased.
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 has in the past and may in the future 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.
Property and Equipment
Office
equipment and leasehold improvements are recorded at cost and depreciated on a straight-line basis
over the estimated useful lives of the assets, ranging from three to seven years, but not longer
than initial lease terms in the case of leasehold improvements.
When
assets are fully depreciated, it is the Companys policy to remove the costs and related accumulated
depreciation from its books and records.
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. An impairment in the carrying
value of an asset is recognized when the

|7
|-



|expected future operating cash flows derived from the asset are less than its carrying value.
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.
For
the three and nine months ended September 30, 2007 and 2006, outstanding stock options and warrants
in the aggregate weighted average amount of 2,164,000, 2,130,000, 2,174,000 and 1,995,000, respectively,
have been excluded from the diluted loss per share since their effect would be antidilutive.
Stock Options
Effective
January 1, 2006, the Company adopted FASB 123R, Share-Based Payment, 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, 2007 and 2006
was $50,000, $106,000, $5,000 and $553,000, respectively.
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.
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 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 February 2007, the Financial Accounting Standards Board issued FASB No. 159, The Fair Value

Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement
No.
115, which permits companies to measure many financial instruments and certain other
assets
and liabilities at fair value on an instrument-by-instrument basis (the fair value option).
FASB
159 is effective for financial statements issued for fiscal years beginning after November 15, 2007.

We are currently evaluating the possible impact of adopting FASB No. 159 on our consolidated financial

statements.
Effective
January 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation No. 48,
Accounting for Uncertainty in Income Taxesan Interpretation of FASB Statement 109.
FIN 48 prescribes a comprehensive model for the manner in which a company should recognize, measure,
present and disclose in its financial statements all material uncertain tax positions that the Company
has taken or expects to take on a tax return. As of the date of adoption, there were no tax positions
for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly
increase or decrease within twelve months from the date of adoption of FIN 48 or from September 30,
2007. As of September 30, 2007, the only tax jurisdictions to which the Company is subject are the
United States and several states where the Company operates. Open tax years relate to years in which
unused net operating losses were generated. Thus, upon adoption of FIN 48, the Companys open
tax years extend back to 2000. In the event that the Company concludes that it is subject to interest
and/or penalties arising from uncertain tax positions, the Company will present interest and penalties
as a component of income taxes. No amounts of interest or penalties were recognized in the Companys
Consolidated Statements of Operations or Consolidated Balance Sheets upon adoption of FIN 48 or as
of and for the three and nine months ended September 30, 2007.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8
|-



|2.   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, 2007 and 2006.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                         

|                                 |  | **Three months ended September 30, 2007** |         
|-------------------------------- |  | ----------------------------------------- | --------
|                                 |  |                                           |         
|                                 |  | **F&B**                                   |         
|                                 |  |                                           |         
|Revenues from external customers |  | $                                         | 191,473 
|Depreciation and amortization    |  |                                           | 32,186  
|Operating loss                   |  |                                           | (185,099
|Investment income                |  |                                           | 435     
|Other intangible assets          |  |                                           |        
|Fixed assets                     |  |                                           | 414,943 
|Total assets                     |  |                                           | 597,376 

|                                 |  |                                           |         
|-------------------------------- |  | ----------------------------------------- | --------
|                                 |  | **Three months ended September 30, 2006** |         
|                                 |  |                                           |         
|                                 |  | **F&B**                                   |         
|                                 |  |                                           |         
|Revenues from external customers |  | $                                         | 210,179 
|Depreciation and amortization    |  |                                           | 35,868  
|Operating loss                   |  |                                           | (177,762
|Investment income                |  |                                           |        
|Other intangible assets          |  |                                           |        
|Fixed assets                     |  |                                           | 617,484 
|Total assets                     |  |                                           | 811,403 

|                                 |  |                                          |         
|-------------------------------- |  | ---------------------------------------- | --------
|                                 |  | **Nine months ended September 30, 2007** |         
|                                 |  |                                          |         
|                                 |  | **F&B**                                  |         
|                                 |  |                                          |         
|Revenues from external customers |  | $                                        | 566,928 
|Depreciation and amortization    |  |                                          | 99,026  
|Operating loss                   |  |                                          | (583,219
|Investment income                |  |                                          | 1,330   
|                                 |  |                                          |         

|                                 |  | **Nine months ended September 30, 2006** |         
|-------------------------------- |  | ---------------------------------------- | --------
|                                 |  |                                          |         
|                                 |  | **F&B**                                  |         
|                                 |  |                                          |         
|Revenues from external customers |  | $                                        | 637,980 
|Depreciation and amortization    |  |                                          | 118,871 
|Operating loss                   |  |                                          | (822,444
|Investment income                |  |                                          | 1,026   

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The
Company has no foreign operations. During the three and nine months ended September 30, 2007 and
2006, 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.
3.   Subsequent Event
In October 2007, Zargis and the 3M Company entered into an exclusive multi-year marketing agreement
involving Zargis heart sound analysis software and 3M Littmanns next-generation electronic
stethoscope. Under the agreement, Zargis will support 3M in its efforts to develop a next-generation
stethoscope that will be compatible with Zargis heart sound analysis software. In addition,
the alliance provides Zargis with a wide-range of marketing and promotional opportunities along with
exclusive rights to sell its ground-breaking heart sound analysis software through the global distribution
network of the Littmann brand. The agreement grants 3M a minority equity position in Zargis, following
the first sale of Zargis software through the 3M distribution channel, and a seat on Zargis
board of directors.

|9
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|ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF 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, 2006.
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. In
2005, we conceived Wibiki, 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. 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. 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 Notes
to Consolidated Financial Statements  Note 2, 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. 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.
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|In October 2007, Zargis and the 3M Company entered into an exclusive multi-year marketing agreement involving Zargis heart sound analysis software and 3M Littmanns next-generation electronic stethoscope. Under the agreement, Zargis will support 3Min its efforts to develop a next-generation stethoscope that will be compatible with Zargis heart
sound analysis software. In addition, the alliance provides Zargis with a wide-range of marketing
and promotional opportunities along with exclusive rights to sell its ground-breaking heart sound
analysis software through the global distribution network of the Littmann brand. The agreement grants
3M a minority equity position in Zargis, following the first sale of Zargis software through
the 3M distribution channel, and a seat on Zargis board of directors.
In February 2003, we acquired a controlling interest in Zargis Medical. At September 30, 2007, as a
result of continued investment, our ownership interest was approximately 81%.
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 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.
Broadband Patents.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.
Wibiki.  During 2005, our technology resources and experience in wireless broadband enabled us
to conceive a new software-based Wibiki initiative to leverage existing Wi-Fi infrastructures to
reduce cost and complexity that is now available at www.gobiki.com. The business premise for Wibiki
is an advertising platform we call Adbiki. On September 21, 2007, Wibiki launched a new beta service
to transform web ads into a usable space by Wibiki members for sharing web content with their friends.
We continue to evolve the Wibiki platform beyond its original wireless focus. Adbiki is versatile,
can scale to a large user base and is the underpinning for the NetfreeUS proposed service described below.
NetfreeUs.In March 2007, NetfreeUs, a new wholly-owned subsidiary, asked the FCC for authority to manage a new
nationwide Wireless Public Broadband (WPB) network in the 2155-2175 MHz frequency band. NetfreeUS
Wireless Public Broadband (WPB) service will never charge monthly fees. NetfreeUS will
coordinate third-party lessees who would own and operate wireless access points (WAPs)
with no lessee authorized to operate more than 50 WAPs. WPB will promote localism and the provision
of advertising and public service messages targeted to local interests and communities, as well as
local business and economic development, through ubiquitous coverage provided by small-footprint
networks. On August 31, 2007, the FCC issued an Order that dismissed without prejudice the application
filed by NetfreeUS and other applicants to provide wireless service. NetfreeUS has filed a Petition
for Partial Reconsideration with the FCC requesting a grant of its application and petition for forbearance
and has also filed a Notice to Intervene in an action filed by another applicant in the United States
Court of Appeals for the District of Columbia.
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. 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.
The
license has been renewed through February 1, 2016 conditioned upon demonstrating to the FCC by March
27, 2007 that we are providing substantial service. On March 7, 2007, we filed a notification
that we are providing substantial service in accordance with FCC standards. On March
27, 2007, out of an abundance of caution, we requested a contingent waiver and an extension of time
until March 27, 2010 to demonstrate substantial service, to the extent our earlier demonstration
is not deemed compliant with FCC standards. On July 31, 2007, we were informed by the FCC that we
had not demonstrated that we were providing substantial service on the required date
and were granted a waiver to extend the construction and substantial service deadline under the Companys
FCC license renewal to October 6, 2008.
Other.We have invested a portion of our assets in a portfolio of marketable securities consisting of publicly
traded equity
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|11
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|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.
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 2006 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.
Share-Based Payments. Prior to January 1, 2006, we accounted for our 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. We 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.
Effective January 1, 2006, we adopted FASB 123R, Share-Based Payment, using the modified
prospective application method. Under this method, for all unvested awards as of January 1,
2006, we record 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, we record 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.
We
estimate the value of these awards on the date of grant using a Black-Scholes option pricing model.
The determination of the fair value of these awards on the date of grant is affected by our stock
price as well as assumptions regarding a number of complex and subjective variables. These variables
include our expected stock price volatility over the term of the awards, expected term, risk-free
interest rate, expected dividends and expected forfeiture rates.
If
factors change and we employ different assumptions in the application of FASB 123R in future periods,
the compensation expense that we record under FASB 123R may differ significantly from what we have
recorded in the current period. There is a high degree of subjectivity involved when using option
pricing models to estimate share-based compensation under FASB 123R. Consequently, there is a risk
that our estimates of the fair values of these awards on the grant dates may bear little resemblance
to the actual values realized upon the exercise, expiration, early termination or forfeiture of those
share-based payments in the future. Employee stock options may expire worthless or otherwise result
in zero intrinsic value as compared to the fair values originally estimated on the grant date and
reported in our consolidated financial statements. Alternatively, value may be realized from these
instruments that are significantly in excess of the fair values originally estimated on the grant
date and reported in our consolidated financial statements. During the nine months ended September
30, 2007, we do not believe that reasonable changes in the projections
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|would have had a material effect on share-based compensation expense.
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 thefinancial 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. While we believe
  that our accruals for these matters are adequate, if the actual loss is significantly different than
  the estimated loss, our results of operations will be affected in the period that the difference
  is known.
Three and Nine Months Ended September 30, 2007 Compared to Three and Nine Months Ended September 30,
2006
Revenues decreased $60,000 from $638,000 for the nine months ended September 30, 2006 to $578,000 for
the nine months ended September 30, 2007 and decreased $19,000 from $210,000 for the three months
ended September 30, 2006 to $191,000 for the three months ended September 30, 2007. These decreases
are primarily the result of a reduction in menu prices at the Companys first store and a lack
of customer acceptance of the F&B format at the second store. We are testing new menu concepts
as a solution to customer acceptance.
Selling, general and administrative expenses decreased $356,000 from $3,162,000 for the nine months
ended September 30, 2006 to $2,806,000 for the nine months ended September 30, 2007 and increased
$186,000 from $699,000 for the three months ended September 30, 2006 to $885,000 for the three months
ended September 30, 2007. The decrease for the nine month periods is primarily a result of decreases
in stock based compensation. The increase for the three month periods is primarily a result of the
receipt of a withholding tax refund in the 2006 period.
Research and development expenses decreased $125,000 from $1,384,000 for the nine months ended September
30, 2006 to $1,259,000 for the nine months ended September 30, 2007 and increased $42,000 from $482,000
for the three months ended September 30, 2006 to $524,000 for the three months ended September 30,
2007. The decrease for the nine month periods are primarily a result of a lower level of expenses
incurred during the first half of 2007 in connection with new wireless initiatives by the Company
with an increase in this activity during the three month periods.
Depreciation and amortization decreased $462,000 from $618,000 for the nine months ended September
30, 2006 to $156,000 for the nine months ended September 30, 2007 and decreased $123,000 from $174,000
for the three months ended September 30, 2006 to $51,000 for the three months ended September 30,
2007. 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 renovation to one of the F&B Restaurant stores.
Investment income increased $595,000 from a net gain of $268,000 for the nine months ended September
30, 2006 to a net gain of $863,000 for the nine months ended September 30, 2007 and decreased
$79,000 from a net gain of $232,000 for the three months ended September 30, 2006 to a net gain of
$153,000 for the three months ended September 30, 2007. Realized gains decreased $71,000 from net
gains of $139,000 for the nine months ended September 30, 2006 to net gains of $68,000 for the nine
months ended September 30, 2007 and increased $14,000 from net gains of $39,000 for the three
months ended September 30, 2006 to net gains of $53,000 for the three months ended September 30,
2007. Unrealized gains increased $758,000 from net losses of $470,000 for the nine months ended September
30, 2006 to net gains of $288,000 for the nine months ended September 30, 2007 and decreased $21,000
from net losses of $37,000 for the three months ended September 30, 2006 to net losses of $58,000
for the three months ended September 30, 2007. Interest income decreased $93,000 from $599,000 for
the nine months ended September 30, 2006 to $506,000 for the nine months ended September 30, 2007
and decreased $73,000 from $231,000 for the three months ended September 30, 2006 to $158,000 for
the three months ended September 30, 2007. These 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.
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 approximately $4,300,000 for the nine months ended September
30, 2007 compared to net cash used in operating activities of approximately $2,000,000 for the nine
months ended September 30, 2007 and 2006. This increase is primarily a result of a $300,000 increase
in net loss after adjustment for non-cash items and a $1,700,000 increase in marketable securities.
Net cash used in investing activities was approximately $1,000,000 for the nine months ended September
30, 2007 compared to net cash used in investing activities of approximately $5,400,000 for the nine
months ended September 30, 2006. This net decrease in cash used in investing activities was primarily
the result of a $8,000,000 increase in maturities and a $4,000,000 increase in purchases of United
States Treasury bills and a $300,000 decrease in property and equipment additions during the nine
months ended September 30, 2007.
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|Net cash used in financing activities was $2,000 for the nine months ended September 30, 2007 compared to net cash used in financing activities of $131,000 for the nine months ended September 30, 2006. This decrease was a result of decreases in repurchases of treasury stock.
At September 30, 2007, the Companys future minimum lease payments due under non-cancelable leases aggregated $1,177,000. $111,000 of this amount is due during the remainder of 2007. $382,000, $233,000, $138,000 and $109,000 of this amountis due during the years ending December 31, 2008, 2009, 2010 and 2011, respectively, and $315,000 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 $300,000 or $200,000
  if the license agreement is terminated by the Company before 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.
On June 19, 2007, the Company received a letter from the Nasdaq Stock Market informing the Company
that it will have 180 days, or until December 17, 2007, to regain compliance with Marketplace Rule
4310(c)(4), which requires the Company to maintain a minimum closing bid price of $1.00 per share.
For the 30 consecutive business days prior to June 19, 2007, the bid price of the Companys
common stock closed below $1.00 per share. This letter has no effect on the listing of the Companys
common stock at this time. If at any time before December 17, 2007 the closing bid price of the Companys
common stock is $1.00 or more per share for a minimum of 10 consecutive business days, the Company
will have complied with the minimum bid requirement. If the Company is unable to demonstrate compliance
with the minimum bid price requirement by December 17, 2007, Nasdaq will notify the Company that
its common stock will be delisted from the Nasdaq Stock Market. At that time, the Company may appeal
the decision to a Nasdaq Listing Qualifications Panel. The Company is considering all available options
in order to maintain its listing on Nasdaq, including seeking shareholder approval for a reverse stock split.
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 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 February 2007, the Financial Accounting Standards Board issued FASB No. 159, The Fair Value

Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement
No.
115, which permits companies to measure many financial instruments and certain other
assets
and liabilities at fair value on an instrument-by-instrument basis (the fair value option).
FASB
159 is effective for financial statements issued for fiscal years beginning after November 15, 2007.

We are currently evaluating the possible impact of adopting FASB No. 159 on our consolidated financial

statements.
Effective
January 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation No. 48,
Accounting for Uncertainty in Income Taxesan Interpretation of FASB Statement 109.
FIN 48 prescribes a comprehensive model for the manner in which a company should recognize, measure,
present and disclose in its financial statements all material uncertain tax positions that the Company
has taken or expects to take on a tax return. As of the date of adoption, there were no tax positions
for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly
increase or decrease within twelve
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|months from the date of adoption of FIN 48 or from September 30, 2007. As of September 30, 2007, the only tax jurisdictions to which the Company is subject are the United States and several states where the Company operates. Open tax years relate to years in which unused net operating losses were generated. Thus, upon adoption of FIN 48, the Companys open tax years extend back to 2000. In the event that the Company concludes that it is subject to interest and/or penalties arising from uncertain tax positions, the Company will present interest and penalties as a component of income taxes. No amounts of interest or penalties were recognized in the Companys Consolidated Statements of Operations or Consolidated Balance Sheets
upon adoption of FIN 48 or as of and for the three and nine months ended September 30, 2007.
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The
Companys financial instruments at September 30, 2007 consist primarily of cash equivalents,
which are subject to interest rate risk, and marketable securities, 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 approximates market value since these highly liquid, interest
earning investments are invested in money market funds. 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 4T.    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, 2007 that have materially affected, or are reasonably likely to materially
affect, the Companys internal control over financial reporting.
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|PART II. OTHER INFORMATION
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|                          
|ITEM 1.                   
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|                          
|ITEM 1A.                  
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|                          
|                          
|ITEM 2.                   
|                          
|                          
|                          
|ITEM 3.                   
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|                          
|ITEM 4.                   
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|ITEM 5.                   
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|ITEM 6.                   
|                          

| | Exhibit 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.                            

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|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, 2007 | By:                                                         
|                        |                                                             
|                        | Shant S. Hovnanian                                          
|                        | Chairman of the Board, President and Chief Executive Officer
|                        |                                                             
|                        |                                                             
|Date: November 14, 2007 | By:                                                         
|                        |                                                             
|                        | Thomas M. Finn                                              
|                        | Treasurer and Chief Financial and Accounting Officer        

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