UNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q xQUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For
the quarterly period ended September 30, 2005 OR oTRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from
_____________________ to _______________________ Commission file number: 000-27582 SPEEDUS CORP. (Exact name of registrant as specified in
its charter) Delaware
  
  13-3853788(State or other jurisdiction of
  incorporation or organization)
  
  (I.R.S. Employer Identification No.)  9 Desbrosses Street, Suite 402
  Brooklyn, New York
  
  10013(Address of principal executive offices)
  
  (Zip Code)  888-773-3669(Registrants telephone number, including area
code)Not Applicable(Former name, former address and former fiscal year, if changed
since
  last report) Indicate by
check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes   x   No   o Indicate by
check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act). Yes   o   No   x Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes   o   No   x The number of
outstanding shares of the registrants common stock, par value $.01 per share,
as of November 9, 2005 was 16,117,899.    SPEEDUS CORP.
INDEX TO FORM 10-Q

[Page]PART I  FINANCIAL INFORMATIONITEM 1 
  Financial StatementsConsolidated
  Balance Sheets as of September 30, 2005 (unaudited) and December 31, 2004
  
  3Consolidated
  Statements of Operations (unaudited) for the Three and Nine Months Ended
  September 30, 2005 and 2004
  
  4Consolidated
  Statements of Cash Flows (unaudited) for the Nine Months Ended September 30,
  2005 and 2004
  
  5Notes
  to Consolidated Financial Statements (unaudited)
  
  6-10ITEM
  2  Managements Discussion and Analysis of Financial Condition
  and Results of Operations
  
  11-15ITEM
  3  Quantitative and Qualitative Disclosures About Market Risk
  
  15ITEM
  4  Controls and Procedures
  
  15PART II  OTHER INFORMATIONITEM
  1  Legal Proceedings
  
  16ITEM
  2  Unregistered Sales of Equity Securities and Use of Proceeds
  
  16ITEM
  3  Defaults Upon Senior Securities
  
  16ITEM
  4  Submission of Matters to a Vote of Security Holders
  
  16ITEM
  5  Other Information
  
  16ITEM
  6  Exhibits
  
  16Signature
  Page
  
  17Exhibit 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
  
  18Exhibit 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
  
  19Exhibit 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
  
  20Exhibit 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
  
  212

SPEEDUS CORP.CONSOLIDATED BALANCE SHEETS(unaudited)

September
  30,
  2005
  
  December
  31,
  2004ASSETSCurrent assets:Cash and
cash equivalents
  
  $
  15,995,636
  
  $
  17,740,865United
States Treasury bills
  
  
  3,969,400
  
  
  5,977,200Marketable
securities
  
  
  1,806,779
  
  
  1,060,592Prepaid
expenses and other
  
  
  127,916
  
  
  173,979Accounts
and other receivables
  
  
  1,100
  
  
  49,134Total
current assets
  
  
  21,900,831
  
  
  25,001,770Property and equipment, net
of accumulated
  depreciation of $272,144 and $175,457
  
  
  528,311
  
  
  609,840Other intangible assets, net
of accumulated
  amortization of $2,408,412 and $1,812,249
  
  
  821,632
  
  
  1,417,795Other investments
  
  
  800,000
  
  
  900,000Other assets
  
  
  778,528
  
  
  752,869Total assets
  
  $
  24,829,302
  
  $
  28,682,274LIABILITIES
AND STOCKHOLDERS EQUITYCurrent
liabilities:Accounts
payable
  
  $
  152,357
  
  $
  315,742Accrued
liabilities
  
  
  1,265,243
  
  
  1,357,720Total
current liabilities
  
  
  1,417,600
  
  
  1,673,462Minority interest
  
  
  
  
  
  159,294Commitments and
ContingenciesStockholders
equity:Common
stock ($.01 par value; 50,000,000
  shares authorized; 21,750,174 and 21,587,674 shares issued)
  
  
  217,502
  
  
  215,877Preferred
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
  
  
  90,719,740
  
  
  90,546,583Treasury
stock (at cost; 5,618,780 and
  5,368,949 shares)
  
  
  (5,866,176
  )
  
  (5,499,684
  )Accumulated
deficit
  
  
  (61,659,364
  )
  
  (58,413,258
  )Stockholders equity
  
  
  23,411,702
  
  
  26,849,518Total
liabilities and stockholders equity
  
  $
  24,829,302
  
  $
  28,682,274The 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 30,2005
  
  2004
  
  2005
  
  2004Revenues
  
  $
  293,768
  
  $
  308,600
  
  $
  803,494
  
  $
  659,843Expenses:Selling, general and administrative
  
  
  981,196
  
  
  998,249
  
  
  2,921,117
  
  
  3,160,531Research and development
  
  
  389,238
  
  
  378,143
  
  
  1,085,507
  
  
  1,117,137Depreciation and amortization
  
  
  229,473
  
  
  278,833
  
  
  692,849
  
  
  871,079Cost of sales
  
  
  92,819
  
  
  66,098
  
  
  263,680
  
  
  194,609Technology settlement expenses
  
  
  
  
  
  
  
  
  
  
  
  2,928,583Total operating expenses
  
  
  1,692,726
  
  
  1,721,323
  
  
  4,963,153
  
  
  8,271,939Operating loss
  
  
  (1,398,958
  )
  
  (1,412,723
  )
  
  (4,159,659
  )
  
  (7,612,096
  )Investment income/(loss)
  
  
  151,467
  
  
  135,518
  
  
  432,720
  
  
  32,337Minority interest
  
  
  35,681
  
  
  144,688
  
  
  159,294
  
  
  476,900Gain from technology settlement
  
  
  
  
  
  
  
  
  
  
  
  15,000,000Earnings/(loss) before benefit from income
  taxes
  
  
  (1,211,810
  )
  
  (1,132,517
  )
  
  (3,567,645
  )
  
  7,897,141Benefit from income taxes
  
  
  321,539
  
  
  
  
  
  321,539
  
  
  Net earnings/(loss)
  
  $
  (890,271
  )
  $
  (1,132,517
  )
  $
  (3,246,106
  )
  $
  7,897,141Per share:Basic earnings/(loss) per common share
  
  $
  (0.06
  )
  $
  (0.07
  )
  $
  (0.20
  )
  $
  0.49Weighted average common shares outstanding
  - basic
  
  
  16,164,823
  
  
  16,219,742
  
  
  16,203,146
  
  
  16,254,198Diluted earnings/(loss) per common share
  
  $
  (0.06
  )
  $
  (0.07
  )
  $
  (0.20
  )
  $
  0.47Weighted average common shares outstanding
  - diluted
  
  
  16,164,823
  
  
  16,219,742
  
  
  16,203,146
  
  
  16,816,636The accompanying notes are an integral part
of these consolidated financial statements.

4


SPEEDUS CORP.CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Nine months ended September 30,2005
  
  2004Cash flows from operating activities:Net earnings/(loss)
  
  $
  (3,246,106
  )
  $
  7,897,141Adjustments to reconcile net earnings/(loss)
to  net cash provided by/(used in) operating
  activities:Depreciation and amortization
  
  
  692,849
  
  
  871,079Unrealized investment (gains)/losses
  
  
  32,702
  
  
  11,767Minority interest
  
  
  (159,294
  )
  
  (476,900
  )Stock based compensation
  
  
  12,282
  
  
  26,810Changes in operating assets and
liabilities:Marketable securities
  
  
  (778,889
  )
  
  1,996,471Prepaid expenses and other
  
  
  46,063
  
  
  (49,691
  )Due from broker
  
  
  
  
  
  3,131,835Accounts and other receivables
  
  
  48,034
  
  
  (34,181
  )Other assets
  
  
  (25,659
  )
  
  (148,634
  )Accounts payable
  
  
  (163,385
  )
  
  70,590Accrued liabilities
  
  
  (92,477
  )
  
  (220,531
  )Securities sold and not purchased
  
  
  
  
  
  (5,406,135
  )Net
  cash provided by/(used in) operating activities
  
  
  (3,633,880
  )
  
  7,669,621Cash flows from investing activities:Property and equipment additions
  
  
  (15,157
  )
  
  (495,736
  )United States Treasury bills:Purchases
  
  
  (13,992,200
  )
  
  Maturities
  
  
  16,000,000
  
  
  Other investments:Purchases
  
  
  (500,000
  )
  
  (736,920
  )Transfer to Marketable securities
  
  
  600,000
  
  
  Net
  cash provided by/(used in) investing activities
  
  
  2,092,643
  
  
  (1,232,656
  )Cash flows from financing activities:Proceeds from exercise of options or
warrants
  
  
  162,500
  
  
  71,586Repurchase of stock
  
  
  (366,492
  )
  
  (249,132
  )Net
  cash provided by/(used in) financing activities
  
  
  (203,992
  )
  
  (177,546
  )Net
  increase/(decrease) in cash  and cash
  equivalents
  
  
  (1,745,229
  )
  
  6,259,419Cash and cash equivalents, beginning of period
  
  
  17,740,865
  
  
  19,419,197Cash and cash equivalents, end of period
  
  $
  15,995,636
  
  $
  25,678,616Supplemental information of business acquired:Fair value of assets acquired:Cash
  
  $
  
  
  $
  Non current assets
  
  
  
  
  
  Other intangible assets
  
  
  
  
  
  136,500Less-liabilities assumed:Current liabilities
  
  
  
  
  
  Minority interest
  
  
  
  
  
  (136,500
  )Cash paid
  
  
  
  
  
  less-cash acquired
  
  
  
  
  
  Acquisition of business, net of cash
acquired
  
  $
  
  
  $
  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 2004 audited consolidated financial statements
and notes thereto on Form 10-K.

Operating
results for the three and nine months ended September 30, 2005 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2005.

Financial statements and principles of consolidation

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

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

The
Companys share of earnings or losses of associated companies that are 20% to
50% owned is included in the consolidated operating results using the equity
method of accounting.

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

Estimates

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

Marketable
Securities

All
marketable securities are defined as trading securities under the provisions of
Statement of Financial Accounting Standards No. 115, Accounting for Certain
Investments in Debt and Equity Securities. At September 30, 2005 and December
31, 2004, marketable securities consisted of publicly traded equity securities
and were recorded at fair market value. Their original cost was $1,419,000 and
$877,000, unrealized gains since acquisition were $388,000 and $184,000 and the
carrying value was $1,807,000 and $1,061,000, respectively. At September 30,
2005, based upon the fair market value of these securities 27% was invested in
technology and telecommunications companies and 73% was invested in a coal
company.

United States Treasury bills

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

Other
investments

The
Company has invested in equity and debt instruments of publicly and
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.

At
September 30, 2005, other investments consist of:

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

(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, and

6

(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.

The
Company does not believe there has been any impairment of other investments at
September 30, 2005.

Securities
Sold But Not Purchased

The
Company may sell publicly traded equity securities it does not own in
anticipation of declines in the fair market values of the securities. When the
Company effects such transactions, it must borrow the securities it sold in
order to deliver them and settle the trades. The amount that would be shown on
the balance sheet as Securities sold and not purchased would represent the
value of these securities at fair market value. At September 30, 2005 and
December 31, 2004, there were no securities sold and not purchased.

Due
From Broker

In
connection with selling publicly traded securities that it does not own, the
Company would be obligated to maintain balances with brokerage firms as
security for these transactions. At September 30, 2005 and December 31, 2004,
there were no restricted cash balances.

Concentrations
of Credit Risk

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

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

Long-lived
Assets

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

Goodwill
and Other Intangible Assets

The
Company accounts for goodwill and other intangible assets in accordance with
Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets which requires the use of a nonamortization approach to
account for purchased goodwill and certain intangibles.  Under the nonamortization approach, goodwill
is not being amortized into results of operations, but instead is reviewed for
impairment on a reporting unit basis at least annually and charged against
results of operations only in the periods in which the recorded value of
goodwill is more than its implied fair value. During the fourth quarter of
2004, after determining that the estimated present value of future cash flows
was less than its carrying value, the Company recorded a $621,000 charge for
impairment of goodwill in connection with the acquisition of F&B
Güdtfood.

The
Company owns broadband assets, included in intangible assets, with a carrying
value of $516,000 at September 30, 2005 and currently does not generate
significant revenues or cash flows. However, the Company estimated that, based
upon its review of recent transactions and other factors, the fair value of its
remaining FCC license and certain patents that have no carrying value on its
books would generate sufficient cash to fully realize the assets described
above. This estimate evaluated the recovery of these broadband assets compared
to the fair value of the remaining FCC license and certain patents as a group
since it represents the lowest level for which identifiable cash flows are
largely independent of the cash flows of other groups of assets and
liabilities.

Other
intangible assets consist of: (i) the cost of a broadband patent and (ii)
medical technology in connection with the acquisition of a controlling interest
in Zargis Medical during 2003. Through the year ended December 31, 2002, the
patent was amortized over its life of fourteen years at the time of
acquisition. During the three months ended March 31, 2003, the Company reviewed
the estimated useful life of this patent in light of the continuing depressed
economic state of the telecommunications industry. As a result, effective
January 1, 2003, the Company considered the remaining useful life to be four
years and has accounted for this determination as a change in an estimate. At
September 30, 2005, the broadband patent was recorded at cost in the amount of
$2,070,000 with accumulated amortization of $1,554,000. Medical technology, in
the aggregate amount of $1,160,000 with accumulated amortization in the amount
of $854,000 at September 30, 2005, is being amortized over a period of three
years.

For
the three and nine months ended September 30, 2005, amortization expense
relating to intangible assets was $199,000 and $596,000, respectively. For the
three and nine months ended September 30, 2004, amortization expense relating
to intangible

7

assets was $187,000 and $562,000, respectively. The
estimated annual amortization expense for the balance of fiscal 2005 and fiscal
years 2006 and 2007, the expiration of the remaining useful life of the Companys
intangible assets at September 30, 2005, is $199,000, $589,000 and $34,000,
respectively.  Amortization expense is
included in Depreciation and amortization on the accompanying consolidated
statement of operations and not allocated to Selling, general and
administrative or Research and development.

Revenue
Recognition

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

Earnings Per Share

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

For
the three and nine months ended September 30, 2005 and the three months ended
September 30, 2004, outstanding stock options and warrants in the
aggregate weighted average amount of 1,851,708, 1,872,944 and 1,837,215 have
been excluded from the diluted loss per share since their effect would be antidilutive.
For the nine months ended
September 30, 2004, the weighted average common shares for diluted earnings per
share were determined by adding weighted average shares in the aggregate amount
of 562,438 for the assumed exercise of stock options and warrants, calculated
using the treasury stock method, to the weighted average shares outstanding for
basic earnings per share for a total of 16,816,636 weighted average shares
outstanding for diluted earnings per share. For the nine months ended
September 30, 2004, outstanding stock options and warrants in the weighted
average aggregate amount of 836,385 were excluded from the computation of
diluted earnings per share since the exercise prices were greater than the
average market price of the common stock.

Stock
Options

The
Company accounts for its employee stock options in accordance with Statement of
Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation, as amended by SFAS 148, Accounting
for Stock-Based CompensationTransition and Disclosurean amendment of FASB
Statement No. 123, which defines a fair value method of measuring
and accounting for compensation expense from employee stock options. This
standard also allows accounting for such options under the intrinsic value
method in accordance with Accounting Principles Board No. 25, Accounting for
Stock Issued to Employees. The Company has elected to use the intrinsic value
method and is presenting pro forma disclosures of earnings and earnings per
share as if the fair value method of accounting was applied.

Unaudited
pro forma earnings information giving effect to compensation expense based upon
the fair value at the date of grant in accordance with SFAS 123 for the three
and nine months ended September 30, 2005 and 2004 is summarized as follows:

Three months ended September 30,
  
  Nine months ended September 30,(unaudited)
  
  (unaudited)2005
  
  2004
  
  2005
  
  2004Net
  earnings/(loss) as reported
  
  $
  (890,271
  )
  $
  (1,132,517
  )
  $
  (3,246,106
  )
  $
  7,897,141After tax effect
  of pro forma compensation
  
  
  (10,342
  )
  
  (1,979
  )
  
  (21,442
  )
  
  (6,729
  )Pro forma net
  earnings/(loss)
  
  $
  (900,613
  )
  $
  (1,134,496
  )
  $
  (3,267,548
  )
  $
  7,890,412Earnings/(loss)
  per share:Basic - as
  reported
  
  $
  (0.06
  )
  $
  (0.07
  )
  $
  (0.20
  )
  $
  0.49Basic - pro
  forma
  
  $
  (0.06
  )
  $
  (0.07
  )
  $
  (0.20
  )
  $
  0.49Diluted - as
  reported
  
  $
  (0.06
  )
  $
  (0.07
  )
  $
  (0.20
  )
  $
  0.47Diluted - pro
  forma
  
  $
  (0.06
  )
  $
  (0.07
  )
  $
  (0.20
  )
  $
  0.47In
December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payment which replaces
SFAS No. 123 and supercedes APB Opinion No. 25. SFAS 123R requires
all share-based payments to employees, including grants of employee stock
options, to be recognized in the financial statements based on their fair
values beginning with the first annual period after June 15, 2005, with
early adoption encouraged. The pro forma disclosures previously permitted under
SFAS 123 no longer will be an alternative to financial statement recognition.
The Company is required to adopt SFAS No. 123R beginning January 1, 2006.
Under SFAS No. 123R, the Company must determine the appropriate fair value
model to be used for valuing share-based payments, the amortization method for
compensation cost and the transition method to be used at date of adoption. The
transition methods include modified prospective and modified retrospective
adoption options, using the previously disclosed pro forma data. Under the
modified retrospective option, prior periods may be restated either as of the
beginning of the year of adoption or for all periods presented. The modified
prospective method requires that compensation expense be recorded for all
unvested stock options and restricted stock at the beginning of the first
period of adoption of SFAS No. 123R, while the modified retrospective
methods would record compensation expense for all unvested stock options and
restricted stock beginning with the first period restated. The Company is
evaluating the requirements of SFAS No. 123R and expects that the adoption
of SFAS No. 123R could have a material impact on the Companys financial
statements.

8

Recent Accounting Pronouncements

In
May 2005, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 154, Accounting Changes and Error
Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3.
SFAS 154 requires retrospective application to prior periods financial
statements for any changes in accounting principle, unless it is impracticable
to determine either the period-specific effects or the cumulative effect of the
change. SFAS 154 defines retrospective application as the application of a
different accounting principle to prior accounting periods as if that principle
had always been used or as the adjustment of previously issued financial
statements to reflect a change in the reporting entity. SFAS 154 also requires
that a change in depreciation, amortization, or depletion method for
long-lived, non-financial assets be accounted for as a change in accounting
estimate affected by a change in accounting principle. SFAS 154 carries forward
without change the guidance contained in APB 20 for reporting the correction of
an error in previously issued financial statements and a change in accounting
estimate. The Company will be required to adopt SFAS 154 for any accounting
changes or corrections of errors on or after January 1, 2006. The Company does
not expect the adoption of SFAS 154 to have a material effect on the Companys
consolidated financial statements.

2.   Acquisitions

a.
On February 28, 2003, the Company increased its investment in Zargis Medical to
57.7% with an additional investment of $1,250,000. Prior to February 28, 2003,
the Company held a 46.4% interest in Zargis and accounted for its investment
under the equity method of accounting. On
July 28, 2003, the Company increased its ownership in Zargis Medical to 68.9%
with an additional investment of $2,000,000. As of December 31, 2003 and
February 1, 2004, our ownership increased to 70.5% and 71.2%, respectively, as
a result of Zargis not having met certain milestones. On September 22, 2004,
the Company increased its ownership in Zargis Medical to 72.7% with an
additional investment of $500,000.

This
acquisition was accounted for using the purchase method of accounting. The
results of operations of Zargis Medical have been included in the consolidated
statements of operations from the date of acquisition. The $3,750,000 aggregate
purchase price was allocated as follows: $3,769,000 to cash, $34,000 to non
current assets, $1,160,000 to other intangible assets, $(219,000) to current
liabilities and $(994,000) to minority interest. An aggregate of $1,160,000 has
been allocated as medical technology to an intangible asset and is being
amortized over a period of three years.

b.
On May 6, 2002, the Company acquired a 51% interest in 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. On
February 8, 2003, the Company reduced its cash investment in F&B Güdtfood
and received $1,775,000 while maintaining its 51% interest. In December 2003,
as a result of renegotiation, our interest increased to 80% without an
additional investment and, under certain circumstances, could increase to 90%.

3.   Gain
from Technology Settlement

In
February 2004, the Companys wholly-owned subsidiary, CellularVision Technology
& Telecommunications, L.P., received $15 million from a former
international licensee in settlement of litigation that CT&T instituted in
May 2001.

In
connection with the settlement and as provided under the terms of his 2002
employment agreement, Shant S. Hovnanian, Chairman of the Board and Chief
Executive Officer of the Company, received a contingent participation in the
proceeds of the settlement in the amount of approximately $2.8 million. In
addition, approximately $0.1 million in legal and other closing costs was paid
at closing to unaffiliated third parties. These expenses are included in
Technology settlement expenses for the nine months ended September 30, 2004
in the accompanying consolidated statement of operations.

4.   Business Segment
Information

The
following table sets forth the Companys financial performance by reportable
operating segment for the three and nine months ended September 30, 2005 and
2004. F&B Güdtfood and Zargis Medical are included in the consolidated
financial statements of the Company since May 6, 2002 and February 28, 2003,
respectively, the dates of acquisition of majority interests.

9

Three months ended September 30, 2005F&B
  
  Zargis
  
  Corporate
  and other
  
  TotalsRevenues from external
  customers
  
  $
  293,768
  
  $
  0
  
  $
  0
  
  $
  293,768Depreciation and
  amortization
  
  
  22,525
  
  
  3,240
  
  
  203,708
  
  
  229,473Operating loss
  
  
  (124,708
  )
  
  (279,200
  )
  
  (995,050
  )
  
  (1,398,958
  )Investment income/(loss)
  
  
  337
  
  
  22
  
  
  151,108
  
  
  151,467Other intangible assets
  
  
  0
  
  
  305,672
  
  
  515,960
  
  
  821,632Fixed assets
  
  
  466,730
  
  
  20,020
  
  
  41,561
  
  
  528,311Total assets
  
  
  649,919
  
  
  514,751
  
  
  23,664,632
  
  
  24,829,302Three months ended September 30, 2004F&B
  
  Zargis
  
  Corporate
  and other
  
  TotalsRevenues from external
customers
  
  $
  307,069
  
  $
  0
  
  $
  1,531
  
  $
  308,600Depreciation and
amortization
  
  
  26,151
  
  
  4,211
  
  
  248,471
  
  
  278,833Operating loss
  
  
  (135,092
  )
  
  (404,039
  )
  
  (873,592
  )
  
  (1,412,723
  )Investment
income/(loss)
  
  
  198
  
  
  2,170
  
  
  133,150
  
  
  135,518Goodwill and other
intangible assets
  
  
  620,875
  
  
  687,788
  
  
  928,728
  
  
  2,237,391Fixed assets
  
  
  535,949
  
  
  25,925
  
  
  44,686
  
  
  606,560Total assets
  
  
  665,059
  
  
  522,331
  
  
  29,672,599
  
  
  30,859,989Nine months ended September 30, 2005F&B
  
  Zargis
  
  Corporate
  and other
  
  TotalsRevenues from external
  customers
  
  $
  802,854
  
  $
  0
  
  $
  640
  
  $
  803,494Depreciation and
  amortization
  
  
  70,296
  
  
  11,428
  
  
  611,125
  
  
  692,849Operating loss
  
  
  (442,678
  )
  
  (962,821
  )
  
  (2,754,160
  )
  
  (4,159,659
  )Investment income/(loss)
  
  
  818
  
  
  60
  
  
  431,842
  
  
  432,720Nine months ended September 30, 2004F&B
  
  Zargis
  
  Corporate
  and other
  
  TotalsRevenues from external
  customers
  
  $
  656,641
  
  $
  0
  
  $
  3,202
  
  $
  659,843Depreciation and
  amortization
  
  
  61,950
  
  
  11,529
  
  
  797,600
  
  
  871,079Operating loss
  
  
  (526,855
  )
  
  (1,290,245
  )
  
  (5,794,996
  )
  
  (7,612,096
  )Investment income/(loss)
  
  
  2,191
  
  
  6,368
  
  
  23,778
  
  
  32,337The
Company has no foreign operations. During the three or nine months ended
September 30, 2005 and 2004, 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.

5.   Legal Proceedings

The
Company is not currently involved in any material pending legal proceedings.

10

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

The
following discussion and analysis of financial condition and results of operations
should be read in conjunction with the corresponding discussion and analysis
included in the Companys Report on Form 10-K for the year ended December 31, 2004.

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 medical diagnostic support
service solutions that automatically analyze acoustical data from a patient to
determine physiological significant features useful in medical diagnosis.  The first Zargis clinical device, the Zargis
Acoustic Cardioscan, received FDA approval in May 2004.  Cardioscan will initially be launched to a
select group of physicians, teaching hospitals and other health care
professionals. We own 80% of F&B Güdtfood Holding Corp., the creator and
operator of the original Eurocentric chic and quick café, which is operating
two stores in Manhattan. We own a portfolio of patents that allow for
high-speed wireless communications. We also own fixed wireless spectrum in the
New York City metropolitan area that we may commercialize in the future to
support high-speed, or broadband, Internet access service.

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, medical 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, the Zargis Acoustic
Cardioscan, received FDA approval in May 2004. Cardioscan will initially be
launched to a select group of physicians, teaching hospitals and other health
care professionals to be used as part of general medical examinations and physicals
to detect murmurs which could be a sign of valvular and congenital heart
disease. General medical examinations, according to the National Center for
Health Statistics, totaled 64 million in 2000 for the US alone.  Zargis is currently researching, and
conducting trials on, additional noninvasive diagnostic support tools that process
acoustical data from the body in order to provide an accurate and intelligible
assessment of a patients health. These assessments may be used by physicians
and other healthcare providers to assist in the early identification or
monitoring of heart, lung, vascular and other conditions and to provide better
patient treatment.

We
have signed an exclusive contract with Zargis to provide transaction processing
to support Zargis medical products. Some of the major next steps remaining for
Zargis include continuing clinical trials for new applications of the Zargis
technology and the formation of strategic partnerships for industry and market
acceptance.

In
February 2003, we acquired a controlling interest in Zargis Medical for an
additional investment of $1,250,000. In July 2003, we increased our ownership
in Zargis Medical to 68.9% by investing an additional $2,000,000. As of
December 31, 2003 and February 1, 2004, our ownership increased to 70.5% and
71.2%, respectively, as a result of certain milestones not having been met. In
September 2004, we increased our ownership in Zargis Medical to 72.7% by
investing an additional $500,000.

11

F&B
Güdtfood. We own 80%
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 and, under certain circumstances, could increase to 90%.
We expect that F&B Güdtfood will begin selling F&B Güdtfood franchises
through its wholly owned subsidiary, F&B Güdtfood Franchise Corp. We have
also entered into a management services contract with F&B Güdtfood.

Broadband
Patents. Through our wholly owned subsidiaries,
Broadband Patents, LLC and CellularVision Technology & Telecommunications,
L.P., we have accumulated a portfolio of patents that allow for high-speed
wireless communication systems with greater information content, reliability,
clarity, or more efficient use of licensed spectrum as compared to prior
systems.  We have six domestic patents
with expiration dates ranging from 2007 through 2017, with approximately 38 international
counterparts in 22 countries. We also have 20 patents pending in an
additional 5 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 it
would be difficult for such a wireless communications system to be constructed
without using one or more of our patented technologies, it is a lengthy and
expensive process to 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.

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

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

Other. We have invested a
portion of our assets in a portfolio of marketable securities consisting of
publicly traded equity securities. We have also invested a portion of our
assets in equity and debt instruments of publicly and 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 2004 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, 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.

Long-lived
assets. Long-lived assets, including fixed assets, goodwill
when applicable and other intangibles, are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of any
such asset may not be recoverable through estimated future cash flows from that
asset. The estimate of cash flow is based upon, among other things, certain
assumptions about expected future operating performance. Specifically, we own
broadband assets, included in intangible assets, which had a carrying value of
$516,000 at September 30, 2005 and currently do not generate significant
revenues or cash flows. However, as of December 31, 2004, we estimated that,
based upon our review of recent transactions and other factors, the fair value
of our remaining FCC license and certain patents that have no carrying value on
our books would generate sufficient cash to fully realize our assets described
above as of December 31, 2004. This estimate evaluated the recovery of these
broadband assets compared to the fair value

12

of our remaining FCC license and certain patents as a
group since it represents the lowest level for which identifiable cash flows
are largely independent of the cash flows of other groups of assets and
liabilities. These estimates may differ from actual results due to, among other
things, technological changes, economic conditions, changes to our business
model or changes in our operating performance. We also reviewed the carrying
value of goodwill recorded in connection with the F&B Güdtfood acquisition and estimated based upon our
review, taking into account such factors as projected operations, that there
had been impairment to this carrying value. As a result, we recorded a charge
in the amount of $621,000, the balance of our goodwill, during the fourth
quarter of 2004.

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

Nine and
Three Months Ended September 30, 2005 Compared to Nine and Three Months Ended September
30, 2004

Revenues
increased $143,000 from $660,000 for the nine months ended September 30, 2004
to $803,000 for the nine months ended September 30, 2005 and decreased $15,000
from $309,000 for the three months ended September 30, 2004 to $294,000 for the
three months ended September 30, 2005. The increase for the nine month period is
primarily a result of the opening of a second F&B Güdtfood store during the
second quarter of 2004. Revenues generated by the second store were $337,000 and
$189,000 for the nine months ended September 30, 2005 and 2004, respectively. This
increase for the nine month periods is net of a decrease during the three
months ended September 30, 2005, primarily a result of a reduction in menu
prices and unseasonably warm weather that reduced traffic. Revenues generated
by the second store were $135,000 and $155,000 for the three months ended September
30, 2005 and 2004, respectively.

Selling,
general and administrative expenses decreased $240,000 from $3,161,000 for the nine
months ended September 30, 2004 to $2,921,000 for the nine months ended September
30, 2005 and decreased $17,000 from $998,000 for the three months ended September
30, 2004 to $981,000 for the three months ended September 30, 2005. These
decreases are primarily a result of decreases in compensation and employee
related expenses as a result of staff reductions. The decrease for the 9 month
period is net of an increase as a result of the opening of a second F&B
Güdtfood store during the second quarter of 2004.

Research
and development expenses decreased $31,000 from $1,117,000 for the nine months
ended September 30, 2004 to $1,086,000 for the nine months ended September 30,
2005 and remained approximately the same for the three months ended September 30,
2004 compared to the three months ended September 30, 2005. The decrease for
the nine month period is primarily a result of decreases in compensation and
employee related expenses as a result of staff reductions.

Depreciation
and amortization decreased $178,000 from $871,000 for the nine months ended September
30, 2004 to $693,000 for the nine months ended September 30, 2005 and decreased
$50,000 from $279,000 for the three months ended September 30, 2004 to $229,000
for the three months ended September 30, 2005. These decreases, net of increases
in the amounts of $35,000 and $12,000 during nine and three month periods of 2005
compared to 2004, respectively, for amortization of medical technology
resulting from the Zargis acquisition, is a result of assets becoming fully
depreciated.

Cost
of sales increased $69,000 from $195,000 for the nine months ended September 30,
2004 to $264,000 for the nine months ended September 30, 2005 and increased $27,000
from $66,000 for the three months ended September 30, 2004 to $93,000 for the
three months ended September 30, 2005. These increases are primarily a result
of the opening of a second F&B Güdtfood store during the second quarter of
2004.

During
the nine months ended September 30, 2004, the Company incurred $2,929,000 in
expenses in connection with a technology settlement in the amount of
$15,000,000. No such expenses were recognized during the nine months ended September
30, 2005. In connection with the settlement and as provided under the terms of
his 2002 employment agreement, Shant S. Hovnanian, Chairman of he Board and
Chief Executive Officer of the Company, received a contingent participation in
the proceeds of the settlement in the amount of approximately $2.8 million
during the nine months ended September 30, 2004.

Investment
income increased $401,000 from a net gain of $32,000 for the nine months ended September
30, 2004 to a net gain of $433,000 for the nine months ended September 30, 2005
and increased $15,000 from a net gain of $136,000 for the three months ended September
30, 2004 to a net gain of $151,000 for the three months ended September 30, 2005.
Realized losses decreased $192,000 from net losses of $367,000 for the nine
months ended September 30, 2004 to net losses of $175,000 for the nine months
ended September 30, 2005 and increased $55,000 from net gains of $35,000 for
the three months ended September 30, 2004 to net losses of $20,000 for the
three months ended September 30, 2005. Unrealized gains decreased $47,000 from
net gains of $218,000 for the nine months ended September 30, 2004 to net gains
of $171,000 for the nine months ended September 30, 2005 and decreased $84,000
from net gains of $28,000 for the three months ended September 30, 2004 to net losses
of $56,000 for the three months ended September 30, 2005. Interest income
increased $256,000 from $181,000 for the nine months ended September 30, 2004

13

to $437,000 for the nine months ended September 30, 2005 and
increased $154,000 from $73,000 for the three months ended September 30, 2004
to $227,000 for the three months ended September 30, 2005, $81,000 of the increase for the three and nine months ended September 30, 2005 is a result of interest received as a result of a
tax refund from the filing of amended tax returns. The balance of the increase, net of a decrease as a result of a lesser amount
of funds available for short-term investment, is a result of increased interest rates. 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.

Minority
interest decreased $318,000 from $477,000 for the nine months ended September 30,
2004 to $159,000 for the nine months ended September 30, 2005 and decreased $109,000
from $145,000 for the three months ended September 30, 2004 to $36,000
for the three months ended September 30, 2005. This amount represents the
interest of minority stockholders in the losses of F&B Güdtfood and Zargis
Medical.

During
the nine months ended September 30, 2004, the Company recorded a gain from
technology settlement in the amount of $15,000,000. No such gain was recognized
during the nine months ended September 30, 2005.

During the three and nine months ended September 30, 2005, the Company recorded a benefit from income taxes in the amount of
$322,000 as a result of a tax refund from the filing of amended tax returns. No such benefit was recorded during the three and
nine months ended September 30, 2004.


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 $3,634,000 for the nine months ended September 30,
2005 compared to net cash provided by operating activities of $7,670,000 for
the nine months ended September 30, 2004. This net increase in cash used in
operating activities was primarily the result of a gain from technology
settlement in the amount of $15,000,000 recognized during the nine months ended
September 30, 2004, reduced by $2,929,000 in technology settlement expenses. In
February 2004, the Companys wholly-owned subsidiary, CellularVision Technology
& Telecommunications, L.P., received $15,000,000 from a former
international licensee in settlement of litigation that CT&T instituted in
May 2001. In connection with the settlement and as provided under the terms of
his 2002 employment agreement, Shant S. Hovnanian, Chairman of the Board and
Chief Executive Officer of the Company, received a contingent participation in
the proceeds of the settlement in the amount of approximately $2,845,000 during
the nine months ended September 30, 2004.

Net
cash provided by investing activities was $2,093,000 for the nine months ended September 30,
2005 compared to net cash used in investing activities of $1,233,000 for the nine
months ended September 30, 2004. This net decrease in cash used in investing
activities was the result of a decrease in property and equipment additions in
the amount of $481,000, the maturity of United States Treasury bills in the net
amount of $2,008,000 and a net decrease in other investments in the amount of $100,000.

Net
cash used in financing activities was $204,000 for the nine months ended September 30,
2005 compared to net cash used in financing activities of $178,000 for the nine
months ended September 30, 2004. This net increase in cash used in financing
activities was primarily the result of an increase in repurchases of treasury
stock in the amount of $117,000, net of an increase in proceeds received from
the exercise of options and warrants in the amount of $91,000.

At
September 30, 2005, the Companys future minimum lease payments due under non-cancelable
leases aggregated $1,821,000. $102,000 of this amount is due during the
remainder of 2005; $365,000, $276,000, $283,000 and $233,000 of this amount is
due during the years ending December 31, 2006, 2007, 2008 and 2009,
respectively, and the balance is payable thereafter. In addition, in connection
with a license agreement to which the Company is a party, a termination payment
will be payable by the Company in the amount of $500,000, $300,000 or $200,000
if the license agreement is terminated by the Company before September 2007,
September 2009 or September 2011, respectively.

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

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

Recent
Accounting Pronouncements

In
May 2005, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 154, Accounting Changes and Error
Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3.
SFAS 154 requires

14

retrospective application to prior periods financial
statements for any changes in accounting principle, unless it is impracticable
to determine either the period-specific effects or the
cumulative effect of the change. SFAS 154 defines retrospective application as
the application of a different accounting principle to prior accounting periods
as if that principle had always been used or as the adjustment of previously
issued financial statements to reflect a change in the reporting entity. SFAS 154
also requires that a change in depreciation, amortization, or depletion method
for long-lived, non-financial assets be accounted for as a change in accounting
estimate affected by a change in accounting principle. SFAS 154 carries forward
without change the guidance contained in APB 20 for reporting the correction of
an error in previously issued financial statements and a change in accounting
estimate. The Company will be required to adopt SFAS 154 for any accounting
changes or corrections of errors on or after January 1, 2006. The Company does
not expect the adoption of SFAS 154 to have a material effect on the Companys
consolidated financial statements.

ITEM 3. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The
Companys financial instruments at September 30, 2005 consist primarily of cash
equivalents, which are subject to interest rate risk, and marketable securities
and United States Treasury bills, which are subject to price risk.

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

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

ITEM 4. CONTROLS
AND PROCEDURES

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

There
have not been any changes in the Companys internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act) during the fiscal quarter ended September 30, 2005 that
have materially affected, or are reasonably likely to materially affect, the Companys
internal control over financial reporting.

15

PART II.  OTHER
INFORMATION

ITEM 1.
  LEGAL PROCEEDINGSNote 5 to the accompanying consolidated financial
  statements is incorporated herein by reference.ITEM 2.
  UNREGISTERED SALES OF EQUITY
  SECURITIES AND USE OF PROCEEDSStock repurchase program:Period
  
  (a) Total
  Number
  of Shares (or
  Units) Purchased
  
  (b) Average
  Price
  Paid per Share (or
  Unit)
  
  (c) Total
  number
  of Shares (or
  Units) Purchased
  as Part of Publicly
  Announced Plans
  or Programs
  
  (d) Maximum number (or
  Approximate
  Dollar Value) ofShares (or
  Units)that May
  Yet Be
  Purchased Under
  the Plans or
  Programs (1)July 1, 2005 - July
  31, 2005
  
  
  92,566
  
  $
  1.50
  
  
  92,566
  
  $
  785,783August 1, 2005 - August
  31, 2005
  
  
  60,963
  
  $
  1.52
  
  
  60,963
  
  $
  692,977September 1,
  2005 -September 30, 2005
  
  
  43,702
  
  $
  1.35
  
  
  43,702
  
  $
  633,824Total
  
  
  197,231
  
  $
  1.47
  
  
  197,231
  
  $
  633,824(1) On November 21, 2000, the Company announced that
its Board of Directors had approved a stock repurchase program for the
repurchase of up to $1,000,000 of Company stock through open market as well as
privately negotiated transactions. Thereafter, the Board of Directors approved increases
to the program in the aggregate amount of $5,500,000.

ITEM 3.
  DEFAULTS UPON SENIOR SECURITIESNone.ITEM 4.
  SUBMISSION OF MATTERS TO A VOTE OF
  SECURITY HOLDERSNone.ITEM 5.
  OTHER INFORMATIONNone.ITEM 6.
  EXHIBITSExhibit number 31.1
  Certification of Chief Executive Officer Pursuant to
  Rule 13a-14 of the Securities Exchange Act of 1934, as Adopted Pursuant to
  Section 302 of The Sarbanes-Oxley Act of 2002.Exhibit number 31.2
  Certification of Chief Financial Officer Pursuant to
  Rule 13a-14 of the Securities Exchange Act of 1934, as Adopted Pursuant to
  Section 302 of The Sarbanes-Oxley Act of 2002.Exhibit number 32.1
  Certification of Chief Executive Officer Pursuant to
  18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The
  Sarbanes-Oxley Act of 2002.Exhibit number 32.2
  Certification of Chief Financial Officer Pursuant to
  18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The
  Sarbanes-Oxley Act of 2002.16

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, 2005
  By: /s/ Shant S. HovnanianShant S. HovnanianChairman of the Board, President and Chief Executive
  OfficerDate: November 14, 2005
  By: /s/ Thomas M. FinnThomas M. FinnTreasurer and Chief Financial Officer17