UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM
10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended June 30,
2005 OR o 
TRANSITION 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 402Brooklyn, 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 The number of outstanding shares of the registrants
common stock, par value $.01 per share, as of August 11, 2005 was 16,144,025.    SPEEDUS
CORP.
INDEX TO FORM 10-Q

PagePART I  FINANCIAL INFORMATIONITEM 1 
  Financial StatementsConsolidated Balance Sheets as of June
  30, 2005 (unaudited) and December 31, 2004
  3Consolidated Statements of Operations
  (unaudited) for the Three and Six Months Ended June 30, 2005 and 2004
  4Consolidated Statements of Cash Flows
  (unaudited) for the Six Months Ended June 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
  11-14ITEM 3 
  Quantitative and Qualitative
  Disclosures About Market Risk
  14-15ITEM 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

June 30,
  2005
  
  December
  31,
  2004(unaudited)ASSETSCurrent assets:Cash and cash equivalents
  
  $
  15,793,908
  
  $
  17,740,865United States Treasury bills
  
  
  4,964,850
  
  
  5,977,200Marketable securities
  
  
  1,869,688
  
  
  1,060,592Prepaid expenses and other
  
  
  167,062
  
  
  173,979Due from broker
  
  
  12,455
  
  
  Accounts and other receivables
  
  
  1,600
  
  
  49,134Total current assets
  
  
  22,809,563
  
  
  25,001,770Property and equipment, net of accumulated depreciation of
$241,391
  and $175,457
  
  
  557,368
  
  
  609,840Other intangible assets, net of accumulated amortization of
  $2,209,691 and $1,812,249
  
  
  1,020,353
  
  
  1,417,795Other investments
  
  
  800,000
  
  
  900,000Other assets
  
  
  782,278
  
  
  752,869Total assets
  
  $
  25,969,562
  
  $
  28,682,274LIABILITIES
  AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
  
  $
  199,789
  
  $
  315,742Accrued liabilities
  
  
  1,225,320
  
  
  1,357,720Securities sold and not purchased
  
  
  35,586
  
  
  Total current liabilities
  
  
  1,460,695
  
  
  1,673,462Minority interest
  
  
  35,681
  
  
  159,294Commitments and ContingenciesStockholders equity:Common stock ($.01 par value; 50,000,000 shares
authorized;
  21,633,674 and 21,587,674 shares issued)
  
  
  216,337
  
  
  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
  
  
  90,601,289
  
  
  90,546,583Treasury stock (at cost; 5,421,549 and 5,368,949
shares)
  
  
  (5,575,347
  )
  
  (5,499,684
  )Accumulated deficit
  
  
  (60,769,093
  )
  
  (58,413,258
  )Stockholders equity
  
  
  24,473,186
  
  
  26,849,518Total liabilities and stockholders
equity
  
  $
  25,969,562
  
  $
  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 June 30,
  
  Six months
  ended June 30,2005
  
  2004
  
  2005
  
  2004Revenues
  
  $
  282,947
  
  $
  200,228
  
  $
  509,726
  
  $
  351,243Expenses:Selling, general and administrative
  
  
  964,939
  
  
  1,169,568
  
  
  1,939,921
  
  
  2,162,282Research and development
  
  
  369,637
  
  
  368,249
  
  
  696,269
  
  
  738,994Depreciation and amortization
  
  
  233,299
  
  
  306,770
  
  
  463,376
  
  
  592,246Cost of sales
  
  
  93,674
  
  
  83,567
  
  
  170,861
  
  
  128,511Technology settlement expenses
  
  
  
  
  
  
  
  
  
  
  
  2,928,583Total operating expenses
  
  
  1,661,549
  
  
  1,928,154
  
  
  3,270,427
  
  
  6,550,616Operating loss
  
  
  (1,378,602
  )
  
  (1,727,926
  )
  
  (2,760,701
  )
  
  (6,199,373
  )Investment income/(loss)
  
  
  (612
  )
  
  154,941
  
  
  281,253
  
  
  (103,181
  )Minority interest
  
  
  (1,466
  )
  
  190,841
  
  
  123,613
  
  
  332,212Gain from technology settlement
  
  
  
  
  
  
  
  
  
  
  
  15,000,000Net earnings/(loss)
  
  $
  (1,380,680
  )
  $
  (1,382,144
  )
  $
  (2,355,835
  )
  $
  9,029,658Per share:Basic earnings/(loss) per common share
  
  $
  (0.09
  )
  $
  (0.09
  )
  $
  (0.15
  )
  $
  0.55Weighted average common shares outstanding
  - basic
  
  
  16,226,482
  
  
  16,255,244
  
  
  16,222,625
  
  
  16,271,615Diluted earnings/(loss) per common share
  
  $
  (0.09
  )
  $
  (0.09
  )
  $
  (0.15
  )
  $
  0.54Weighted average common shares outstanding
  - diluted
  
  
  16,226,482
  
  
  16,255,244
  
  
  16,222,625
  
  
  16,832,814The accompanying notes are an integral part
of these consolidated financial statements.

4


SPEEDUS CORP.CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Six months
  ended June 30,2005
  
  2004Cash flows
  from operating activities:Net earnings/(loss)
  
  $
  (2,355,835
  )
  $
  9,029,658Adjustments to reconcile net
  earnings/(loss) to net cash provided by/(used in) operating activities:Depreciation and amortization
  
  
  463,376
  
  
  592,246Unrealized investment (gains)/losses
  
  
  (83,665
  )
  
  58,237Minority interest
  
  
  (123,613
  )
  
  (332,212
  )Stock based compensation
  
  
  9,166
  
  
  21,769Changes in operating assets and
  liabilities:Marketable securities
  
  
  (720,281
  )
  
  1,993,673Prepaid expenses and other
  
  
  6,917
  
  
  (73,078
  )Due from broker
  
  
  (12,455
  )
  
  2,919,910Accounts and other receivables
  
  
  47,534
  
  
  (21,178
  )Other assets
  
  
  (29,409
  )
  
  (1,291
  )Accounts payable
  
  
  (115,953
  )
  
  51,788Accrued liabilities
  
  
  (132,400
  )
  
  (375,238
  )Securities sold and not purchased
  
  
  30,436
  
  
  (4,837,647
  )Net cash provided by/(used in) operating
activities
  
  
  (3,016,182
  )
  
  9,026,637Cash flows
  from investing activities:Property and equipment additions
  
  
  (13,462
  )
  
  (467,508
  )United States Treasury bills:Purchases
  
  
  (9,987,650
  )
  
  Maturities
  
  
  11,000,000
  
  
  Other investments:Purchases
  
  
  (500,000
  )
  
  (600,000
  )Transfer to Marketable securities
  
  
  600,000
  
  
  Net cash provided by/(used in) investing
activities
  
  
  1,098,888
  
  
  (1,067,508
  )Cash flows
  from financing activities:Proceeds from exercise of options or
  warrants
  
  
  46,000
  
  
  71,586Repurchase of stock
  
  
  (75,663
  )
  
  (246,277
  )Net cash provided by/(used in) financing
activities
  
  
  (29,663
  )
  
  (174,691
  )Net increase/(decrease) in cash and cash
equivalents
  
  
  (1,946,957
  )
  
  7,784,438Cash and
  cash equivalents, beginning of period
  
  
  17,740,865
  
  
  19,419,197Cash and
  cash equivalents, end of period
  
  $
  15,793,908
  
  $
  27,203,635The 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 a fair
presentation 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 six months ended June 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 June 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 $1,438,000 and
$877,000, unrealized gains since acquisition were $432,000 and $184,000 and the
carrying value was $1,870,000 and $1,061,000, respectively. At June 30, 2005,
based upon the fair market value of these securities 39% was invested in
technology and telecommunications companies and 61% was invested in a coal
company.

Uniited 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 investments in equity and debt instruments of publicly and
non-publicly held companies and generally 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
June 30, 2005, other investments consist of:

(a)
a convertible promissory note 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, and

(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

(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
June 30, 2005.

6


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 shown on the balance
sheet as Securities sold and not purchased represent the value of these
securities at fair market value. At June 30, 2005, the Company had sold
securities it had not purchased. The aggregate proceeds were $31,000,
unrealized losses since acquisition were $5,000 and the fair market value of
the securities was $36,000. At June 30, 2005, based upon the fair market value
of these securities, 100% was invested in the financial services industry.At
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 is obligated to maintain balances with brokerage firms as security for
these transactions. At June 30, 2005, restricted cash balances in the amount of
$12,000 were held by brokerage firms. At 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 $619,000 at June 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
June 30, 2005, the broadband patent was recorded at cost in the amount of
$2,070,000 with accumulated amortization of $1,451,000. Medical technology, in
the aggregate amount of $1,160,000 with accumulated amortization in the amount
of $759,000 at June 30, 2005, is being amortized over a period of three years.

For
the three and six months ended June 30, 2005, amortization expense relating to
intangible assets was $199,000 and $398,000, respectively. For the three and
six months ended June 30, 2004, amortization expense relating to intangible
assets was $187,000 and $375,000, 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
June 30, 2005, is $397,000, $589,000 and $34,000, respectively.  Amortization expense is included in
Depreciation and amortization on the accompanying Consolidated

7


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 six months ended June 30, 2005 and the three months ended June
30, 2004, outstanding stock options and warrants in the aggregate weighted
average amount of 1,875,386, 1,883,754 and 1,828,358 have been excluded from
the diluted loss per share since their effect would be antidilutive. For the
six months ended June 30, 2004, the weighted average common shares for diluted
earnings per share were determined by adding weighted average shares in the
aggregate amount of 561,199 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 16,832,814
weighted average shares outstanding for diluted earnings per share. For the six
months ended June 30, 2004, outstanding stock options and warrants in the
weighted average aggregate amount of 852,165 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 six months ended June 30, 2005 and 2004 is summarized as follows:

Three
  months ended June 30,
  
  Six months
  ended June 30,(unaudited)
  
  (unaudited)2005
  
  2004
  
  2005
  
  2004Net earnings/(loss) as reported
  
  $
  (1,380,680
  )
  $
  (1,382,144
  )
  $
  (2,355,835
  )
  $
  9,029,658After tax effect of pro forma
compensation
  
  
  (5,550
  )
  
  (4,750
  )
  
  (11,100
  )
  
  (4,750
  )Pro forma net earnings/(loss)
  
  $
  (1,386,230
  )
  $
  (1,386,894
  )
  $
  (2,366,935
  )
  $
  9,024,908Earnings/(loss) per share:Basic - as reported
  
  $
  (0.09
  )
  $
  (0.09
  )
  $
  (0.15
  )
  $
  0.55Basic - pro forma
  
  $
  (0.09
  )
  $
  (0.09
  )
  $
  (0.15
  )
  $
  0.55Diluted - as reported
  
  $
  (0.09
  )
  $
  (0.09
  )
  $
  (0.15
  )
  $
  0.54Diluted - pro forma
  
  $
  (0.09
  )
  $
  (0.09
  )
  $
  (0.15
  )
  $
  0.54In
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 123R could have a material impact on the Companys financial
statements.

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 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 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


8


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 six
months ended June 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 six months ended June 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 June 30, 2005CorporateF&B
  
  Zargis
  
  and other
  
  TotalsRevenues from
  external customers
  
  $
  282,673
  
  $
  
  
  $
  274
  
  $
  282,947Depreciation and
  amortization
  
  
  25,395
  
  
  4,195
  
  
  203,709
  
  
  233,299Operating loss
  
  
  (147,120
  )
  
  (350,636
  )
  
  (880,846
  )
  
  (1,378,602
  )Investment
  income/(loss)
  
  
  528
  
  
  20
  
  
  (1,160
  )
  
  (612
  )Other intangible
  assets
  
  
  0
  
  
  401,201
  
  
  619,152
  
  
  1,020,353Fixed assets
  
  
  487,559
  
  
  23,260
  
  
  46,549
  
  
  557,368Total assets
  
  
  641,993
  
  
  211,884
  
  
  25,115,685
  
  
  25,969,562Three months ended June 30, 2004CorporateF&B
  
  Zargis
  
  and other
  
  TotalsRevenues from
  external customers
  
  $
  200,228
  
  $
  
  
  $
  
  
  $
  200,228Depreciation and
  amortization
  
  
  25,762
  
  
  4,211
  
  
  276,797
  
  
  306,770Operating loss
  
  
  (267,627
  )
  
  (512,710
  )
  
  (947,589
  )
  
  (1,727,926
  )Investment
  income/(loss)
  
  
  602
  
  
  1,284
  
  
  153,055
  
  
  154,941Other intangible
  assets
  
  
  620,875
  
  
  635,441
  
  
  1,031,920
  
  
  2,288,236Fixed assets
  
  
  533,872
  
  
  30,136
  
  
  105,812
  
  
  669,820Total assets
  
  
  657,259
  
  
  411,016
  
  
  30,862,224
  
  
  31,930,499Six months ended June 30, 2005CorporateF&B
  
  Zargis
  
  and other
  
  TotalsRevenues from
  external customers
  
  $
  509,086
  
  $
  
  
  $
  640
  
  $
  509,726Depreciation and
  amortization
  
  
  47,771
  
  
  8,188
  
  
  407,417
  
  
  463,376Operating loss
  
  
  (317,970
  )
  
  (683,621
  )
  
  (1,759,110
  )
  
  (2,760,701
  )Investment
  income/(loss)
  
  
  481
  
  
  38
  
  
  280,734
  
  
  281,253Six months ended June 30, 2004CorporateF&B
  
  Zargis
  
  and other
  
  TotalsRevenues from
  external customers
  
  $
  349,572
  
  $
  
  
  $
  1,671
  
  $
  351,243Depreciation and
  amortization
  
  
  35,799
  
  
  7,318
  
  
  549,129
  
  
  592,246Operating loss
  
  
  (391,763
  )
  
  (886,206
  )
  
  (4,921,404
  )
  
  (6,199,373
  )Investment
  income/(loss)
  
  
  1,993
  
  
  4,198
  
  
  (109,372
  )
  
  (103,181
  )The
Company has no foreign operations. During the three or six months ended June
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 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 $619,000 at
June 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. 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.

Six and Three
Months Ended June 30, 2005 Compared to Six and Three Months Ended June 30, 2004

Revenues
increased $159,000 from $351,000 for the six months ended June 30, 2004 to $510,000
for the six months ended June 30, 2005 and increased $83,000 from $200,000 for
the three months ended June 30, 2004 to $283,000 for the six months ended June
30, 2005. This increase 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 $202,000 and $34,000 for the six months ended June 30,
2005 and 2004, respectively, and $116,000 and $34,000 for the three months
ended June 30, 2005 and 2004, respectively.

Selling,
general and administrative expenses decreased $222,000 from $2,162,000 for the six
months ended June 30, 2004 to $1,940,000 for the six months ended June 30, 2005
and decreased $205,000 from $1,170,000 for the three months ended June 30, 2004
to $965,000 for the three months ended June 30, 2005. This decrease is
primarily a result of decreases in compensation and employee related expenses
as a result of staff reductions by Zargis Medical. This decrease 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 $43,000 from $739,000 for the six months
ended June 30, 2004 to $696,000 for the six months ended June 30, 2005 and remained
approximately the same for the three months ended June 30, 2004 compared to the
three months ended June 30, 2005. This decrease is primarily a result of
decreases in compensation and employee related expenses as a result of staff
reductions by Zargis Medical.

Depreciation
and amortization decreased $129,000 from $592,000 for the six months ended June
30, 2004 to $463,000 for the six months ended June 30, 2005 and decreased $74,000
from $307,000 for the three months ended June 30, 2004 to $233,000 for the three
months ended June 30, 2005. This decrease, net of an increase in the amount of
$23,000 during 2005 compared to 2004 for amortization of medical technology
resulting from the Zargis acquisition, is a result of assets becoming fully
depreciated.

Cost
of sales increased $42,000 from $129,000 for the six months ended June 30, 2004
to $171,000 for the six months ended June 30, 2005 and increased $10,000 from
$84,000 for the three months ended June 30, 2004 to $94,000 for the three
months ended June 30, 2005. This increase is primarily a result of the opening
of a second F&B Güdtfood store during the second quarter of 2004.

During
the six months ended June 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 six months ended June 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 six months
ended June 30, 2004.

Investment
income increased $384,000 from a net loss of $103,000 for the six months ended June
30, 2004 to a net gain of $281,000 for the six months ended June 30, 2005 and decreased
$156,000 from a net gain of $155,000 for the three months ended June 30, 2004
to a net loss of $1,000 for the three months ended June 30, 2005. Realized losses
decreased $247,000 from net losses of $402,000 for the six months ended June 30,
2004 to net losses of $155,000 for the six months ended June 30, 2005 and
increased $212,000 from net gains of $17,000 for the three months ended June
30, 2004 to net losses of $195,000 for the three months ended June 30, 2005.
Unrealized gains increased $36,000 from net gains of $190,000 for the six
months ended June 30, 2004 to net gains of $226,000 for the six months ended June
30, 2005 and decreased $6,000 from net gains of $75,000 for the three months
ended June 30, 2004 to net gains of $69,000 for the three months ended June 30,
2005. Interest income increased $102,000 from $108,000 for the six months ended
June 30, 2004 to $210,000 for the six months ended June 30, 2005 and increased
$62,000 from $63,000 for the three months ended June 30, 2004 to $125,000 for
the three months ended June 30, 2005. 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 $208,000 from $332,000 for the six months ended June 30, 2004
to $124,000 for the six months ended June 30, 2005 and decreased $192,000 from
$191,000 for the three months ended June 30, 2004 to an expense of $1,000
for

13


the three months ended June 30, 2005. This amount represents the interest
of minority stockholders in the losses of F&B Güdtfood and Zargis Medical.

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

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 $3,016,000 for the six months ended June 30,
2005 compared to net cash provided by operating activities of $9,027,000 for
the six months ended June 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 six months ended June 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
six months ended June 30, 2004.

Net
cash provided by investing activities was $1,099,000 for the six months ended June 30,
2005 compared to net cash used in investing activities of $1,068,000 for the six
months ended June 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 $454,000, the maturity of United States Treasury bills in the net
amount of $1,012,000 and a net decrease in other investments in the amount of
$100,000.

Net
cash used in financing activities was $30,000 for the six months ended June 30,
2005 compared to net cash used in financing activities of $175,000 for the six
months ended June 30, 2004. This net decrease in cash used in financing
activities was primarily the result of a decrease in repurchases of treasury
stock in the amount of $171,000, net of decreases in proceeds received from the
exercise of options and warrants in the amount of $26,000.

At
June 30, 2005, the Companys future minimum lease payments due under non-cancelable
leases aggregated $1,979,000. $259,000 of this amount is due during the
remainder of 2005; $365,000, $276,000, $284,000 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 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
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 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 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 June 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 also sold 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.

14


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 securites,
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 June 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 PROCEEDINGS

Note
5 to the accompanying consolidated financial statements is incorporated herein
by reference.

ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Stock
repurchase program:

Period
  
  (a) Total Number 
  of Shares (or
  Units) Purchased
  
  (b) Average Price 
  Paid per Share (or 
  Unit)
  
  (c) Total number 
  of Shares (or 
  Units) Purchased 
  as Part of Publicly 
  Announced Plans 
  or Programs
  
  (d) Maximum 
  number (or 
  Approximate 
  Dollar Value) of
  Shares (or Units) 
  that May Yet Be
  Purchased Under
  the Plans or
  Programs (1)April 1, 2005
  - April 30, 2005
  
  
  0
  
  
  
  $
  0.00
  
  
  
  0
  
  
  
  $
  316May 1, 2005 - May
  31, 2005
  
  
  0
  
  
  
  $
  0.00
  
  
  
  0
  
  
  
  $
  1,000,316June 1, 2005
  - June 30, 2005
  
  
  52,600
  
  
  
  $
  1.44
  
  
  
  52,600
  
  
  
  $
  924,653Total
  
  
  52,600
  
  
  
  $
  1.44
  
  
  
  52,600
  
  
  
  $
  924,653(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 SECURITIES

None.

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

None.

ITEM 5.
OTHER INFORMATION

None.

ITEM 6.
EXHIBITS

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 2002.16


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: August 15, 2005
  
  By:
  /s/ Shant S. HovnanianShant S. HovnanianChairman of the Board, President and Chief Executive
  OfficerDate: August 15, 2005
  
  By:
  /s/ Thomas M. FinnThomas M. FinnTreasurer and Chief Financial Officer17