================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                Amendment No. 2
                                    Form 10-K/A
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 1999        Commission File No. 000-27582

                                SPEEDUS.COM, Inc.
             (Exact name of Registrant as specified in its charter)

          Delaware                                              13-3853788
(State or Other Jurisdiction of                              (I.R.S. Employer
Incorporation or Organization)                            Identification Number)

                  140 58th Street, Suite 7E, Brooklyn, NY 11220
                    (Address of Principal Executive Offices)
                                 (718) 567-4300
                         (Registrant's telephone number)

        Securities registered pursuant to Section 12(b) of the Act: None
        ----------------------------------------------------------------

Securities registered pursuant to Section 12 (g) of the Act: Common Stock, par
value $.01 per share

      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 |_|

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |_|

      The aggregate market value of the Registrant's Common Stock held by
non-affiliates of the Registrant was $140,500,000 on March 24, 2000, based on
the closing trade price of the Common Stock on the NASDAQ National Market system
on that date.

      The number of shares of Common Stock outstanding as of March 24, 2000 was
20,004,838.

                                   ----------

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None.

================================================================================

<PAGE>

Explanatory note: This second amendment on Form 10-K/A to the Company's Form
10-K for the year ended December 31, 1999 is being filed to combine and restate
in its entirety the Form 10-K filed on March 30, 2000 and the Form 10-K/A,
Amendment No. 1, filed on May 1, 2000 to provide certain additional disclosures
in response to comments received from the Securities and Exchange Commission
staff in connection with the Company's registration statement on Form S-3, filed
on September 13, 2000.

                                SPEEDUS.COM, Inc.

                                TABLE OF CONTENTS

PART I

      Item 1    Business
      Item 2    Properties
      Item 3    Legal Proceedings
      Item 4    Submission of Matters to a Vote of Security Holders

PART II

      Item 5    Market for Registrant's Common Equity and Related Stockholder
                Matters
      Item 6    Selected Consolidated Financial Data
      Item 7    Management's Discussion and Analysis of Financial Condition and
                Results of Operations
      Item 7A   Quantitative and Qualitative Disclosures About Market Risk
      Item 8    Consolidated Financial Statements and Supplementary Data
      Item 9    Changes in and Disagreements with Accountants on Accounting and
                Financial Disclosure

PART III

      Item 10   Directors and Executive Officers of the Registrant
      Item 11   Executive Compensation
      Item 12   Security Ownership of Certain Beneficial Owners and Management
      Item 13   Certain Relationships and Related Transactions

PART IV

      Item 14   Exhibits, Financial Statement Schedules and Reports on Form 8-K

This Form 10-K contains "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-K 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-K 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.


                                       2
<PAGE>

                                     PART I

ITEM 1. BUSINESS

The Company

      We are an emerging facilities-based wireless broadband super high-speed
Internet company.

      We have launched a SPEED411(SM) Portal (located at www.speedus.com) to
promote broadband high-speed Internet access on a nationwide basis. Recognizing
the increasing demand from Internet users for faster access to information, our
portal is designed to provide users with information on how to get high-speed
access and how to take advantage of offerings available to high-speed users.

      Currently, we are conducting a limited pilot program of our SPEED(SM)
broadband super high-speed Internet service. SPEED(SM) is delivered via 14
Internet Broadcast Stations operating under the Company's FCC license covering
Metro New York. Our Internet broadcast signal is currently not available at all
locations in our license area. A full marketing effort will not commence until
new LMDS equipment becomes commercially available with cost and performance that
allow implementation of SPEED(SM) service on an economically attractive basis.
In areas where our signal is available, we believe that we offer both small
business and residential customers the lowest-cost, highest downstream speed
Internet access solution available.

      In September 1999, we announced our equity investment in SPEEDIA, LLC, a
mobile Web to wireless information and e-commerce service company. We also
explore additional incubation opportunities in Internet and e-commerce
companies. Our Network Operations Center ("NOC") is a high-tech facility which
can host new, cost-conscious Internet startups that need Internet backbone
connectivity and quick ramp-up capabilities.

      SPEED(SM) Portal

      The SPEED(SM) portal is designed to promote broadband high-speed Internet
access on a nationwide basis. Recognizing the increasing demand from Internet
users for faster access to information to help them "live their lives in the
fast lane", the Company's portal is designed to provide users with information
on how to get high-speed access and how to take advantage of offerings available
to high-speed users.


      For the convenience of users, the portal also provides broadband bulletin
boards, Internet and technology news, business news, real-time stock quotes and
a real-time stock portfolio, weather, free e-mail and Web to wireless e-mail
messaging service and other popular topics, and will allow users to customize
their version of the portal. The Company has entered into license agreements
with popular content providers such as money.net LLC, a financial community
which provides real time stock portfolio tracking features, TUCOWS, Los Angeles
Times Syndicate, National Weather Services and WAVO Corporation, which delivers
real-time feeds from various well-known content providers. The majority of the
contracts with content providers require no payment by us and are cancelable at
our option without penalty. In exchange, we redistribute the content from
providers on a co-branded basis. We do not believe that any of the terms of any
one of these contracts are material.


      Since the recent initial launch of the portal, the most popular pages
visited have been the SPEEDCHECK(SM) meter and the SPEED411(SM) directory. Users
get an accurate measurement of their Internet access speed and can receive
information on all High-Speed Broadband service providers in their geographic
area by entering their phone numbers and addresses and get a variety of
information on high-speed providers in their area. In addition, SPEEDGADGET(SM),
a desktop application which enables users to clock their Internet speed at any
time without having a Web browser open, also scrolls such timely broadband
features as Internet News and alerts users to broadband specials for DSL, cable
modem or wireless broadband.

      In addition to promoting high-speed access for users, as well as
SPEEDUS.COM name recognition, the Company will generate revenues from Web site
advertising and possible e-commerce transactions.

SPEED(SM) Broadband Super High-Speed Internet Service

      Currently, we are conducting a limited pilot program of our SPEED(SM)
service. We operate the pilot program in the Metro New York area, a concentrated
population center in which the Company believes there is substantial unmet
demand for high-speed Internet service within the residential and small business
market. SPEED(SM) is delivered via 14 Internet Broadcast Stations operating
under the Company's FCC license covering Metro New York. Our Internet broadcast
signal is currently not available at all locations in our license area. A full
marketing effort will


                                       3
<PAGE>

not commence until new LMDS equipment becomes commercially available with cost
and performance that allow implementation of SPEED(SM) service on an
economically attractive basis.

Incubation of Internet and E-commerce Companies

      In September 1999, we announced our equity investment in SPEEDIA, LLC, a
mobile Web to wireless information and e-commerce service company. We also
explore additional incubation opportunities in Internet and e-commerce
companies. Our Network Operations Center ("NOC") is a high-tech facility

which can host new, cost-conscious Internet startups that need Internet backbone
connectivity and quick ramp-up capabilities.

Intellectual Property


      In February 2000, BroadBand Patents, LLC, ("BroadBand Patents"), a new
wholly-owned subsidiary established to develop and market our broadband wireless
technology, purchased certain intellectual property from GEC Partners, LLP
("GEC") pertaining to wireless transmissions including U. S. Patent 5,594,937
titled "System for the transmission and reception of directional radio signals
utilizing a gigahertz implosion concept." GEC's predecessor company, GHz
Equipment Company, Inc., developed the nation's first 38 GHz broadband wireless
system in joint venture with Pacific Telesis using the patented technology.


      BroadBand Patents has also acquired 20% of CellularVision Technology &
Telecommunications, L. P. ("CT&T") and certain other rights from a U.S.
subsidiary of Philips Electronics, N. V. ("Philips"). CT&T, which was formed by
Shant S. Hovnanian, our Chairman of the Board, President and Chief Executive
Officer, Vahak S. Hovnanian, a director of the Company, and Bernard B. Bossard,
a former director and officer of our Company, (collectively, the "Founders") and
Philips, is a holder of a portfolio of fundamental broadband wireless patents
and licenses. This intellectual property includes U.S. Patent 5,983,078 titled
"Channel spacing for distortion reduction," U.S. Patent 5,668,610 titled "LMDS
transmitter array with polarization-diversity sub-cells," U.S. Patent 5,949,793
titled "Transmission of digital and analog signals in the same band" and U.S.
Patent 4,747,160 titled "Low power multi-function cellular television system".
We have operated our super high-speed Internet broadband wireless network under
a technology license from CT&T.


      Any particular wireless communications system may employ a number of
different combinations of our patented technology to maximize operational and
spectrum efficiency. We believe that it would be difficult for any wireless
communications company to construct a system without using one or more of our
patented technologies.


      The acquisition of Philips' interest in CT&T was part of a settlement of
litigation commenced by M/A-COM, a unit of Tyco International Ltd. Our portion
of the settlement was $2.4 million which we have expensed for the year ended
December 31, 1999. The Founders have agreed in principle to contribute their 80%
interest in CT&T to us as part of the settlement agreement.

Sales and Marketing

      We are presently offering on a limited pilot program basis our super
high-speed Internet access service to small business and residential subscribers
in Manhattan, Brooklyn and Queens. Our Internet broadcast signal is currently
not available at all locations in our license area. A full marketing effort will
not commence until new LMDS equipment becomes commercially available with cost
and performance that allow implementation of SPEED(SM) service on an
economically attractive basis.

      We have signed the legendary actor Dennis Hopper for a promotional
campaign for the SPEED(SM) portal.

FCC License

      From 1992 until November 1998, we operated a 49-channel analog
subscription television service utilizing 1,300 MHz of spectrum under a LMDS
license from the FCC. The FCC commercial operating license was awarded to us in
recognition of our efforts in developing and deploying LMDS technology, and for
spearheading its regulatory approval at the FCC. In September 1997, our pioneer
LMDS license was renewed as a standard LMDS license through February 1, 2006.
The license provides that the spectrum may be used for a wide variety of fixed
wireless purposes, including wireless local loop telephony, high-speed Internet
access and two-way teleconferencing. The license covers 1,150 MHz of spectrum in
the 28 GHz range encompassing the New York Primary Metropolitan Statistical
Area, a region which includes the five boroughs of New York City as well as the
New York Counties of Westchester, Rockland, and Putnam. 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 expected to occur prior to 2002.


                                       4
<PAGE>

      In November 1998, we assigned an 850 MHz portion of our license to WinStar
Communications, Inc. ("WinStar"). In connection with this assignment, we
discontinued our subscription television service. In October 1999, we assigned a
150Mhz portion of our license to NEXTLINK Communications, Inc. ("NEXTLINK").



Year 2000

      Although the date is now past January 1, 2000, and we have not experienced
immediate adverse impact from the transition to the Year 2000, we cannot provide
assurance that we or our suppliers and customers have not been affected in a
manner that is not yet apparent. In addition, some computer programs that were
date sensitive to the Year 2000 may not have been programmed to process the Year
2000 as a leap year, and any negative consequential effects remain unknown. As a
result, we will continue to monitor our Year 2000 compliance and the Year 2000
compliance of our suppliers and customers. The costs incurred during 1999 and
1998 to address the Year 2000 issues were approximately $70,000.

Equipment and Facilities

      The SPEED service is delivered via the Company's state of the art Internet
Broadband Broadcast System. The completed construction to date of the IBBS
infrastructure combines a dedicated fiber optic backbone with microwave relays
delivering high-speed Internet connectivity to fourteen fully functional IBBS
Stations. Six Internet Broadband Broadcast Stations are located in Manhattan,
six are in Brooklyn and two are in Queens.

      The NOC has a complete satellite downlink facility with access to
international media sources and a fully equipped data center along with Cisco
7200 hardware and New Media Communication CyberStream(TM) TRX100 Linux based
gateway transmitter hardware and software. The CyberStream hardware and software
is compliant with Digital Video Broadcast Multi-Protocol Encapsulation (DVB/MPE)
and Motion Picture Experts Group (MPEG) standards.

      In addition to the NOC, the Company has a Manhattan point of presence
("POP"). The POP houses dial-up modems that support the Company's Internet
access services.

      The principal physical assets incorporated in the Company's system consist
of headend equipment, 28GHz transmitters, fiber optic transmitters and
receivers, repeaters and customer premise equipment (antennas and the SPEED
modem), as well as office space.

      Internet access is obtained through dedicated T-1 lines connecting the NOC
to the Internet "backbone." Signals from the NOC are then transmitted via fiber
optic cable to Internet Broadcast Stations. Signal is distributed by the
Company's fourteen Internet Broadcast Stations, six in Manhattan, six in
Brooklyn and two in Queens, although the availability of signal in particular
localities varies depending upon a number of factors. Increased signal coverage
through additional Internet Broadcast Stations is crucial to widespread
availability of the SPEED service.

      The signal is received at the subscriber's premises by a small flat plate,
high-gain antenna positioned in or outside the window or roof, wherever signal
level is adequate. A co-axial cable connects the antenna to a super high-speed
SPEED modem. The subscriber's system requires an existing modem to maintain the
upstream connection. The two modems work together. The SPEED modem handles the
downstream data and the subscriber's existing modem handles the upstream request
for files.


Government Regulation

      We are not currently subject to direct federal, state or local government
regulation, other than regulations that apply to businesses generally. However,
the grant, renewal and administration of spectrum licenses is regulated by the
Federal Communications Commission. Our LMDS license expires in February 2006.
While the FCC has historically renewed licenses as a matter of course, no
license in the LMDS band has yet been up for renewal. A failure by the FCC to
renew our license could have a material adverse effect on the Company.

      The wireless network carriers that connect us to our users are subject to
regulation by the Federal Communications Commission. Changes in FCC regulations
could affect the availability of wireless coverage. We could also be adversely
affected by regulations that govern or may in the future govern the Internet,
the allocation of radio frequencies or the placement of cellular towers.

Risk Factors

Competition



                                       5
<PAGE>


      The market for Internet products and services overall is highly
competitive and lacks significant barriers to entry, enabling new businesses to
enter this market relatively easily. Competition in the market for Internet
products and services may intensify in the future. Numerous well-established
companies and smaller entrepreneurial companies are focusing significant
resources on developing and marketing services that will compete with our
services. In addition, many of our current and potential competitors have
greater financial, technical, operational and marketing resources. We may not be
able to compete successfully against these competitors in selling our services.
Competitive pressures may also force prices for our Internet services down and
such price reductions may affect our revenues.

Adapting our existing architecture to accommodate increased traffic and
technology advances

      In the future, we may be required to make significant changes to our
architecture, including moving to a completely new architecture, in order to
accommodate growth. If we are required to switch architectures, we may incur
substantial costs and experience delays or interruptions in our service. If we
experience delays or interruptions in our service due to inadequacies in our
current architecture or as a result of a change in architectures, users may
become dissatisfied with our service and move to competing services. These
changes are likely to be expensive and complex and require additional technical
expertise. Also, as we acquire users who rely upon us for a wide variety of
services, it becomes more technologically complex and costly to retrieve, store
and integrate data that will enable us to track each users' preferences. Any
loss of traffic, increased costs, inefficiencies or failures to adapt to new
technologies and the associated adjustments to our architecture would have a
material adverse effect on our business.

Reliance upon the supply of critical elements, including content, from third
parties

      We will depend to a substantial extent upon third parties for several
critical elements of our SPEED(SM) Portal including various technology,
infrastructure and content development.

      We rely on a private third party provider for our principal Internet
connections. Any disruption in the Internet access provided by this third party
provider or any failure of this third-party provider to handle current or higher
volumes of use could have a material adverse effect on our business, operating
results, and financial condition. We license technology and related databases
from third parties for certain elements of our properties, including, among
others, technology underlying the delivery of news, stock quotes and current
financial information and similar services. Our ability to maintain and build
relationships with third-party content providers will be critical to our
success. We may be unable to enter into or preserve relationships with the third
parties whose content we seek to obtain. In addition, we have experienced and
expect to continue to experience interruptions and delays in service and
availability for such elements. Any errors, failures, interruptions, or delays
experienced in connection with these third party technologies and information
services could negatively impact our relationship with users and adversely
affect our brand and our business, and could expose us to liabilities to third
parties.

Internet advertising may not be an effective means of advertising in the future

      We expect that a portion of our revenues will come from advertisements
displayed on our SPEED(SM) Portal. Our ability to generate substantial
advertising revenue will depend upon the size and growth of our user base, the
user base being attractive to advertisers and the continued acceptance by
advertisers of the Web as an advertising medium.

      If we are unsuccessful in adapting to the needs of our advertisers, it
could have a material adverse effect on our business, operating results and
financial condition.

Risk of acceptance; no direct billing relationship with users

      Our SPEED(SM) Portal will link users with a network of e-commerce
companies, including retailers. However, we do not establish a direct billing
relationship with our users as a result of any purchases they may make. The
revenue that we will generate from our e-commerce services will be a commission
paid by the retailer. The user may contact that retailer directly in the future
rather than through our SPEED(SM) Portal. If users bypass our Portal and contact
retailers directly, we will not receive any revenue for purchases made through
that contact.

New system architecture for SPEED(SM) super high-speed Internet service

      Our system utilizes a new technology that has a limited operating history
and that remains subject to further development and refinement. We have
encountered a number of technical problems in the installation of equipment at
the subscriber sites, which require us to develop new and often difficult
solutions to these problems. We cannot assure you that we can continue to
resolve these technical problems and the failure to develop solutions to these
problems could adversely affect the availability of our service to certain
potential subscribers. Furthermore, the



                                       6
<PAGE>


addition of simultaneous two-way communications, which would eliminate the need
for subscribers to use their local telephone lines to send information on the
Internet, will require the development and mass production of appropriate
equipment. We cannot assure you that such equipment will become commercially
available at a cost acceptable to the Company.

Internet broadcast signal not currently available at all locations in license
area

      We currently have fourteen Internet Broadcast Stations servicing only a
small portion of our licensed territory. As is customary in wireless service,
our Internet broadcast signal is currently not available at all locations in our
license area. A full marketing effort will not commence until new LMDS equipment
becomes commercially available with cost and performance that allow
implementation of SPEED(SM) service on an economically attractive basis. We
cannot assure you that such equipment will become commercially available at a
cost acceptable to the Company.

Competitors with broader market coverage offering high-speed Internet access

      The market for Internet access and related services is highly competitive.
We expect to encounter competition for our super high-speed Internet access
service from local, regional and national Internet service providers, often
referred to as ISPs. These include large companies like @Home, America On-Line
and ATT World Net. Among the competitors are the telephone companies with
Digital Subscriber Line, or DSL, technology, which increases the effective
capacity of existing copper telephone cables, and cable operators with
high-speed cable modems are among the other communications companies also
providing high-speed Internet access. The competing ISPs using DSL or cable
modems do not currently have the ability to provide the same downstream speed as
our SPEED(SM) service and are not providing high-speed Internet service at
pricing competitive with ours. Many of the competing ISPs have, or can be
expected to have, greater financial, marketing and other resources than us. No
assurance can be given that we will be able to compete successfully with these
entities.

Other LMDS licensees in the metropolitan New York area

      The heart of our Internet broadcast system is our LMDS license from the
FCC, which covers New York City and the surrounding area where 8.6 million
people live or work. In November 1998 and October 1999, we assigned portions of
our LMDS license to WinStar and NEXTLINK, respectively. Although neither company
is currently providing LMDS services that compete with our high-speed Internet
access service, there can be no assurance that they will not offer competing
LMDS services in the future.

Customer loyalty

      The success of our business strategy will depend upon consumer acceptance
of our Super High-Speed Internet access service. Subscriber acceptance could be
adversely affected by, among other things, customer loyalty to more established
competitors and unfamiliarity with our Company and its system. In addition, we
cannot assure you that technical problems will not impede or delay subscriber
acceptance of our service.

Sole-source suppliers

      We have obtained Internet Broadcast Station components and customer
premises equipment either from sole-source third party suppliers or from CT&T,
which purchased them from third party sole-source suppliers. We are now working
directly with vendors. If we are unable to obtain a sufficient supply of
components from these sources, it is likely that we would experience a delay in
developing alternative sources. Inability to obtain adequate supplies of
equipment could result in a delay in providing service to new subscribers, which
would adversely affect our operating results and could damage future marketing
efforts. In addition, a significant increase in the price of the requisite
equipment would adversely affect our financial condition and operating results.
Further, if any of the equipment fails or fails to be supported by its vendors,
it could be necessary for us to redesign substantial portions of the equipment.
Any of these events could have a material adverse effect on our financial
condition and operating results.

Patents or intellectual property rights

      Through our wholly-owned subsidiary, BroadBand Patents, LLP, we have title
or access to patents and intellectual property rights necessary for our
business. However, given the rapid development of technology in the
telecommunications industry, there can be no assurance that certain aspects of
our system will not infringe on the proprietary rights of others. We believe
that if such infringement were to exist based on the establishment of current or
future proprietary rights of others, we could obtain requisite licenses or
rights to use such technology. However,



                                       7
<PAGE>


we cannot assure you that these licenses or rights could be obtained on terms
which would not have a material adverse effect on our financial condition and
operating results.

Ability to successfully identify Internet and e-commerce companies to incubate

      We will face substantial competition in incubating and acquiring Internet
and e-commerce companies from, among others, venture capital firms, large
corporate investors and other publicly-traded Internet companies. These
competitors may limit our opportunity to acquire interests in new partner
companies. In addition, we may be unable to acquire interests in emerging
companies for other reasons, including the inability to agree on terms, such as
price and ownership percentages, incompatibility between us and management and
access to sufficient funding. Our growth will be materially adversely affected
if we cannot successfully identify investments in a sufficient number of
emerging growth companies.

The value of our business may fluctuate because of companies that we invest in

      The value of our business may fluctuate because of companies that we
invest in. We have a 45% equity interest in SPEEDIA, LLC, a mobile Web to
wireless information and e-commerce service company, and are continuing to
explore additional incubation opportunities in Internet and e-commerce
companies. These companies, similar to SPEEDIA, LLC, will likely be development
stage entities for which no public market exists for their stock. SPEEDIA, LLC
is in the early stage of developing and marketing its services and there can be
no assurance how successful they will be.

      While we are a co-manager of SPEEDIA, LLC and, as such, have a degree of
control over their activities, there can be no assurance that we will be able to
exercise any control over other companies that we may invest in. The valuations
of our investments in SPEEDIA, LLC and other privately-held companies that we
may invest in are indeterminate prior to their public offerings, and there can
be no assurance that these offerings will occur since they will be dependent
upon the development of these businesses, market conditions and other conditions
over which we have no control.

Capital and management resources

      There will be a number of special issues that we will have to address in
the incubation of start-up companies, including: the diversion of management
attention in connection with both negotiating and overseeing these transactions;
the potential issuance of additional shares of our Common Stock in connection
with these transactions, which could dilute the rights of existing shareholders,
and the need to incur additional debt in connection with these transactions. In
addition, many, if not all, of these start-up companies will face the same, or
similar, risks as we face in our own business.

Natural disaster or other catastrophic event

      Our operations are susceptible to outages due to fire, floods, power loss,
telecommunications failures, break-ins and similar events. We do not have
multiple site capacity for our services in the event of any such occurrence.
Despite our implementation of network security measures, our servers are
vulnerable to computer viruses, break-ins, and similar disruptions from
unauthorized tampering with our systems. We do not carry sufficient business
interruption insurance to compensate us for losses that may occur as a result of
any of these events. Any such event could have a material adverse effect on our
business, operating results, and financial condition.

Use of the Internet

      Our success will depend greatly on increased use of the Internet for
advertising, marketing, providing services, and conducting business. Commercial
use of the Internet is currently at an early stage of development and the future
of the Internet is not clear. In addition, it is not clear how effective
advertising on the Internet is in generating business as compared to more
traditional types of advertising such as print, television and radio. Our
business will suffer if commercial use of the Internet fails to grow in the
future.

Early growth stage; limited operations to date

      Since the discontinuance of our subscription television services, our
operations in other areas have been limited. We have only had an initial launch
of our Portal, are conducting a limited pilot program for our super high-speed
Internet service and have only invested in one Internet start-up company. Our
most recent historical financial information reflects this limited activity and
our early growth stage of development. Prospective investors should be aware of
the difficulties encountered by enterprises in their early growth stage, like
us, especially in view of the highly competitive nature of the
telecommunications industry.



                                       8
<PAGE>


Lack of profitable operations

      We have recorded operating losses and negative operating cash flows in
each reporting period since inception and, at December 31, 1999, had an
accumulated deficit of approximately $ 26.3 million. These losses and negative
operating cash flows are attributable to the start-up costs and expenses
incurred in connection with the commercial roll-out of our now-discontinued
subscription television system, and expenses incurred in connection with the
LMDS rulemaking proceeding. We believe that consummation of the spectrum
assignments in 1998 and 1999, as well as the sale of 2,000,000 shares of our
Common Stock to NEXTLINK for $20 million in July 1999, have provided sufficient
liquidity for us to finance our current level of operations. However, we do not
expect to have a positive operating cash flow until such time as we
substantially increase our Internet customer base, and/or form a strategic
alliance for use of our Internet capabilities or invest in a successful
incubation opportunity in the future. We cannot assure you that we will be able
to grow our Portal or increase the number of super high-speed Internet access
subscribers to the levels necessary to attain profitability in future years, or
that we will succeed in commercializing any other possible applications of our
system.

Additional financing in the future

      Since the completion of our initial public offering in February 1996, the
proceeds of which were used primarily to fund the build-out of our LMDS
transmission system and marketing and equipment costs, we have sought to raise
the additional capital necessary to execute our business plan. During 1998, we
issued convertible debt and convertible preferred stock that provided for, or
potentially provided for, the issuance of our Common Stock upon conversion at a
discount from market prices at the time of funding. As a result of a decline in
the market price of our Common Stock, the convertible securities issued by us
could have been converted into Common Stock that would have substantially
diluted our existing stockholders. We avoided such dilution by redeeming the
convertible securities using some of the proceeds from the spectrum assignment,
which was consummated in November 1998 for a purchase price of $32.5 million in
cash, before closing costs.

      While we believe that consummation of the spectrum assignments and stock
sale have provided sufficient liquidity to finance our current level of
operations through 2000, we do not expect to have a positive operating cash flow
until such time as we substantially grow our SPEED(SM) Portal, increase our
Internet customer base and/or form a strategic alliance for use of our Internet
capabilities or invest in a successful incubation opportunity in the future. The
lack of additional capital in the near future could have a material adverse
effect on our financial condition, operating results and prospects for growth.

The agreement in principle to acquire CT&T will present us with some special
issues to address

      We have acquired 20% of CT&T and have an agreement in principle for the
transfer of the remaining 80% from the Founders.

      CT&T has a portfolio of fundamental broadband wireless patents and
licenses. The patent expiration dates range from March 2007 through March 2017.
After these dates, others will be able to use the technology without a licensing
agreement from CT&T. In addition, while we have operated our super high-speed
Internet broadband wireless network under a technology license from CT&T, CT&T
has not generated any substantial royalties from other licensing agreements.
There can be no assurance that we will be able to use these patents and
intellectual property profitably. Third parties may not readily accept our
contention that they require licensing and future litigation proving
infringement may be costly and its outcome difficult to project.

      CT&T has liabilities, known and contingent, and may not have the liquidity
or future earnings to satisfy these obligations. As a result, CT&T may require
funding from us. We have had outstanding long-term orders with CT&T for the
purchase of equipment in the aggregate amount of approximately $1,400,000
represented by set-top converters and head-end equipment which has been
delivered to us but have experienced performance problems. We have not accepted
billings for this equipment and no amounts are reflected in our financial
statements. As a result, CT&T has not paid the vendor of this equipment and is
in litigation with the vendor. If the vendor prevails in this suit, we may be
forced to pay for this equipment, which may have little or no value and would
have to be written off.

Managing growth

      Successful implementation of our business plan will require the management
of growth. We cannot assure you that our existing operations and infrastructure
will be adequate to manage such growth, or that any steps taken to improve such
systems and controls will be sufficient. Our future success will depend in part
upon attracting and retaining the services of current management and technical
personnel. We cannot assure you that we will be



                                       9
<PAGE>


successful in attracting, assimilating and retaining new personnel in the future
as future growth takes place. We do not maintain "key person" life insurance
policies on any of our key personnel.

Our stock price has historically been volatile, which may make it more difficult
for you to resell shares when you want at prices you find attractive.

      The trading price of our common stock has been and may continue to be
subject to wide fluctuations. During 1999, the high and low sale prices of our
Common Stock on the Nasdaq Stock Market ranged from $9.25 to $.9063. In 2000,
through March 24, the high and low sale prices of our Common Stock ranged from
$24.75 to $4.50. The closing sale price of our Common Stock was $12.188 on March
24, 2000. Our stock price may fluctuate in response to a number of events and
factors, such as quarterly variations in operating results, announcements of
technological innovations or new products and media properties by us or our
competitors, the operating and stock price performance of other companies that
investors may deem comparable, and news reports relating to trends in our
markets. The stock market in general, and the market prices for Internet-related
companies in particular, have experienced extreme volatility that often has been
unrelated to the operating performance of such companies. These broad market and
industry fluctuations may adversely affect the price of our stock.

Conflicts relating to VisionStar, Inc. ("VisionStar") may distract our
management's attention from implementation of our business plan

      Shant S. Hovnanian, our Chairman of the Board, President and Chief
Executive Officer, is the sole stockholder of VisionStar, a company that holds a
license from the FCC, granted in May 1997, to construct, launch and operate a
telecommunications satellite operating in the radio frequency range of 28 GHz,
which is commonly referred to as the Ka-band, positioned over the continental
United States. If VisionStar constructs and launches a satellite and begins
providing service, we might purchase services from it, and any such transaction
might involve a conflict of interest for Mr. Hovnanian.

      According to the FCC order granting the license, VisionStar proposes to
offer broadband services covering the nation and in urban areas in conjunction
with broadband service operators such as LMDS operators. These broadband
services may include high-speed Internet access, high-speed data services, video
teleconferencing distance learning and video programming.

      In 1998, we received an offer from Mr. Hovnanian to convey to us all of
the outstanding shares of VisionStar, together with related patent application
rights for reimbursement of his verifiable VisionStar-related out-of-pocket
expenses. Through a special committee of the Board of Directors, the Company had
been considering Mr. Hovnanian's offer. At a meeting of the Board of Directors
in August 1998, the Board voted 2-1 against Mr. Hovnanian's offer, with Mr.
Hovnanian voting against the offer as a result of an earlier representation that
he would vote in the same manner as Mr. Bossard, who voted against the offer
based on his belief that the VisionStar satellite license was already an asset
of the Company and that VisionStar and Mr. Hovnanian held the asset in trust for
the Company. Thereafter, the Board and Mr. Hovnanian have had additional
discussions concerning the acquisition of VisionStar.

      In May 1999, Mr. Bossard changed his previous position on the Company's
ownership of VisionStar and commenced a lawsuit in New York State court against
Mr. Hovnanian and VisionStar alleging that, among other things, insofar as Mr.
Hovnanian procured the Ka-band satellite license for his own company,
VisionStar, he breached the partnership agreement among Shant S. Hovnanian,
Vahak S. Hovnanian and Mr. Bossard, which Mr. Bossard claims entitles him to a
free one-third interest in VisionStar arising from the partnership agreement. In
the lawsuit, Mr. Bossard claims that VisionStar represented in its application
to the FCC that the Ka-band license would be used in conjunction with CT&T's
technology. Mr. Bossard is requesting that the court grant him one-third of the
value of VisionStar and its Ka-band license and that the court impose a
constructive trust on the shares and assets of VisionStar, including the Ka-band
license. We are not a party to this lawsuit, either as a plaintiff or a
defendant.

Shant S. Hovnanian and Vahak S. Hovnanian, who in the aggregate own
approximately 32% of our Common Stock, may have the power acting together to
control the direction and future operations of our company.

      Shant S. Hovnanian and Vahak S. Hovnanian in the aggregate own
approximately 32% of our outstanding Common Stock at December 31, 1999. As a
result, acting together they may have the power to elect all of the members of
our Board of Directors, amend our Certificate of Incorporation and By-Laws and
control the direction and future operations of our Company, in each case without
the approval of any of our other stockholders.

      Shant S. Hovnanian, Vahak S. Hovnanian and Bernard B. Bossard are also
parties to a stockholders' agreement, which provides that except for "cause" as
defined under the Delaware corporation statute they will vote



                                       10
<PAGE>


to elect each other to the Board of Directors so long as each such elected
director owns 5% or more of the shares of Common Stock outstanding and including
all shares of Common Stock that may be issued pursuant to the exercise of
existing options, warrants and other rights to acquire Common Stock (i.e., "on a
fully diluted basis"). At the meeting of the nominating committee of our Board
held on May 26, 1999, over his objection, Mr. Bossard was not nominated for
re-election to our Board. Mr. Bossard currently owns less than 5% of our
outstanding Common Stock and has no basis for a claim for re-election.

Sales of shares of Common Stock by Shant S. Hovnanian and Vahak S. Hovnanian
could adversely affect the market price of the Common Stock.

      We cannot predict the effect that future sales of shares of Common Stock,
or the availability of shares of Common Stock for future sale, will have on the
market price of the Common Stock prevailing from time to time. Sales of
substantial amounts of our Common Stock, or the perception that such sales could
occur, could adversely affect the prevailing market price of the Common Stock.

      Shares of Common Stock held by Shant S. Hovnanian and Vahak S. Hovnanian
have been held by each of them for the requisite holding periods under Rule 144
under the Securities Act and may be sold thereunder in accordance with volume
restrictions.

Our charter and bylaws, and the Delaware corporation statute contain certain
anti-takeover provisions that could limit the price that certain investors might
be willing to pay in the future for shares of our Common Stock.

      Our Certificate of Incorporation and By-Laws, and the Delaware corporation
statute contain certain provisions that could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
attempting to acquire, control of us. These provisions could limit the price
that certain investors might be willing to pay in the future for shares of our
Common Stock. These provisions also allow us to issue preferred stock with
rights senior to those of the Common Stock and impose various procedural and
other requirements which could make it more difficult for stockholders to effect
certain corporate actions. We could issue a series of Preferred Stock that
could, depending upon the terms of such series, impede a merger, tender offer or
other transaction that some, or a majority, of our stockholders might believe to
be in their best interests or in which stockholders might receive a premium for
their stock over the then current market price of such stock. In addition, the
Delaware corporation statute, which is applicable to us, contains provisions
that restrict certain business combinations with interested stockholders, which
may have the effect of inhibiting a non-negotiated tender offer or other
business combination.


ITEM 2. PROPERTIES

      The Company leases 20,000 square feet of space at the Brooklyn Army
Terminal for its NOC, as well as, executive and administrative offices. This
lease expires in 2004 and provides for 2 five-year renewal options.

      The Company also leases approximately 100 square feet of space on each of
15 rooftops for its Internet Broadcast Stations and relays. These leases,
several of which contain seven-year renewal options, expire from 1999 to 2003.
The Company believes that leased space on rooftops in New York City and other
locations in the New York PMSA will be readily available to serve as additional
Internet Broadcast Stations.

ITEM 3. LEGAL PROCEEDINGS

      (a) At December 31, 1999, we were party to an arbitration proceeding
instituted on June 30, 1998 before the American Arbitration Association with
Charles N. Garber, our former Chief Financial Officer, who asserted that his
employment agreement was breached by our failure to pay him guaranteed minimum
annual performance bonuses and certain other matters. Mr. Garber sought damages
in an amount estimated to total $488,000, plus his costs and reasonable
attorney's fees. In March 2000, the arbitrator ruled in favor of Mr. Garber but
only awarded him $100,000, plus costs, attorney's fees and interest of
approximately $ 92,000. We have accrued these amounts at December 31, 1999.

      (b) The Company has been named in 3 lawsuits brought in the normal course
of its business in the aggregate amount of approximately $575,000, exclusive of
expenses. The Company believes it has substantial defenses to a material portion
of these claims and is prepared to pursue litigation if a reasonable and
structured settlement cannot be reached with the parties. In the event adverse
judgments are rendered in the same period, the aggregate effect could be
material to the Company's financial position and it could have a material effect
on operating results in the period in which the matters are resolved.


                                       11
<PAGE>

Legal proceedings terminated during the fourth quarter


      (a) In October 1999, a final judgment was entered in the United States
District Court Southern District of New York dismissing the action brought by
Akcess Pacific Group, LLC ("Akcess") on November 20, 1998 against the Company,
SPEEDUSNY and other defendants in connection with the assignment of spectrum in
November 1998 and a convertible preferred stock issue of the Company that was
outstanding at that time.

      (b) In December 1999, the Company, Philips Electronics and M/A-COM, a unit
of Tyco International Ltd., entered into an settlement agreement pursuant to
which the Company paid $2.4 million to M/A-COM in settlement of a proceeding
commenced by M/A-COM in August 1998 against the Company and certain other
parties in connection with the Company's discontinued subscription television
business.

      CT&T, formed by Philips and the Company's co-founders, is the owner of a
portfolio of fundamental broadband wireless patents and licenses. The Company
operates its super high-speed Internet broadband wireless network under a
technology license from CT&T. CT&T was also a party to the proceedings.

      The Company's portion of the settlement was $2.4 million, which was
expensed for the year ended December 31, 1999. In addition to taking advantage
of what the Company believed to be reasonable and favorable settlement terms,
the Company agreed to the settlement as part of its plans to secure an ownership
position in CT&T's patent and license portfolio. Philips, as part of its portion
of the settlement and in exchange for the Company agreeing to its portion of the
settlement, transferred its 20% interest in CT&T to the Company. The
co-founders, on behalf of CT&T and as part of its portion of the settlement and
in exchange for the Company agreeing to its portion of the settlement, agreed in
principle to transfer their 80% interest in CT&T to the Company.


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

      There were no matters submitted to a vote of the stockholders during the
fourth quarter of fiscal 1999.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      Our Common Stock is listed for quotation on the NASDAQ National Market
system under the symbol "SPDE." Prior to January 6, 1999, our trading symbol was
"CVUS". The following table sets forth high, low and closing trade prices for
the Common Stock for the fiscal quarters indicated.

                             High Sale         Low Sale             Closing Sale
                             ---------         --------             ------------
1999
----
First Quarter                 $4.500             $0.906                $2.719
Second Quarter                 9.250              2.063                 5.875
Third quarter                  7.875              3.750                 4.125
Fourth quarter                 6.813              3.125                 4.781


                                       12
<PAGE>

1998
----
First Quarter                 $8.250             $3.375                $5.000
Second Quarter                 4.875              0.750                 1.000
Third Quarter                  1.625              0.094                 0.281
Fourth Quarter                 2.156              0.188                 0.906

      On March 24, 2000, the closing trade price of our Common Stock was $12.188
per share. As of December 31, 1999, there were approximately 300 registered
shareholders and, to the best of our belief, approximately 11,000 beneficial
owners of our Common Stock. During the year ended December 31, 1999, we did not
make any sales of securities that were not registered under the Securities Act
of 1933, as amended (the "Securities Act").

      We have never declared or paid any cash dividends on our Common Stock and
do not intend to declare or pay cash dividends on the Common Stock at any time
in the foreseeable future. Future earnings, if any, will be used for the
expansion of our business.


                                       13
<PAGE>

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

      The selected consolidated financial data below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements of the
Company and Notes thereto included elsewhere in this Form 10-K.

<TABLE>
<CAPTION>
                                                                Year Ended December 31,
                                 ------------------------------------------------------------------------------------
                                     1999              1998              1997             1996               1995
                                 ------------      ------------      ------------      ------------      ------------
                                                         (in thousands, except per share data)
<S>                              <C>               <C>               <C>               <C>               <C>
Statement of Operations
Data:
Revenues ...................     $        612      $      3,648      $      4,943      $      2,190      $      1,196
                                 ------------      ------------      ------------      ------------      ------------
Selling, general and
     administrative ........            5,425             9,691            13,259            10,223             5,435
Depreciation and
     amortization ..........            2,779             6,174             3,881             2,258             1,376
Service costs ..............               --             1,479             2,314             1,175               603
Bad debts ..................               --               730               550               351               202
Management fees ............               --                --                --                --             2,699
                                 ------------      ------------      ------------      ------------      ------------
Total operating expenses ...            8,204            18,074            20,004            14,007            10,315
                                 ------------      ------------      ------------      ------------      ------------
Operating loss .............           (7,592)          (14,426)          (15,061)          (11,817)           (9,119)
Equity in loss .............             (351)               --                --                --                --
Other income ...............              624                --                --                --                --
Net interest income
     (expense) .............            1,278            (2,365)             (202)              186            (2,184)
Gain on assignment
     of spectrum ...........           19,442            28,066                --                --                --
Intellectual property
     settlement ............           (2,425)               --                --                --                --
Income taxes ...............             (330)             (302)               --                --                --
                                 ------------      ------------      ------------      ------------      ------------
Net earnings/(loss) ........     $     10,646      $     10,973      $    (15,263)     $    (11,631)     $    (11,303)
                                 ============      ============      ============      ============      ============
Per Common Share
Basic earnings/(loss) ......     $       0.58      $       0.59            ($ .95)           ($ .75)           ($ .91)
Weighted average
     outstanding ...........       18,465,974        16,551,417        16,000,000        15,576,478        12,395,142

Diluted earnings/(loss) ....     $       0.57      $       0.57            ($ .95)           ($ .75)           ($ .91)
Weighted average
     outstanding ...........       18,680,082        17,612,443        16,000,000        15,576,478        12,395,142
<CAPTION>
                                                                     December 31,
                                 ------------------------------------------------------------------------------------
                                     1999              1998              1997             1996               1995
                                 ------------      ------------      ------------      ------------      ------------
<S>                              <C>               <C>               <C>               <C>               <C>
Balance Sheet Data:
Cash and cash
     equivalents ...........     $     44,613      $     12,902      $        408      $     19,600      $      3,536
Working capital
     (deficiency) ..........           42,794             9,312            (7,029)           16,765            (1,647)
Net property and
     equipment .............           10,959            12,836            20,608            14,158             6,322
Total assets ...............           55,769            25,915            23,154            35,924            12,995
Total debt .................              211               338             7,495             6,260            18,871
Total liabilities ..........            1,969             3,868            11,464             8,972            26,314
Total equity (deficit) .....           53,799            22,047            11,690            26,952           (13,319)
</TABLE>

Summary of Quarterly Financial Data


                                       14
<PAGE>

<TABLE>
<CAPTION>
                                                               Quarters Ended

1999                            March 31         June 30        September 30      December 31        Year End
<S>                           <C>              <C>              <C>              <C>               <C>
Revenues                      $    15,211      $    26,959      $   509,899      $     60,066      $    612,135

Selling, general and
  administrative expenses       1,146,725        1,455,933        1,328,781         1,494,096         5,425,535

Operating loss                 (1,812,213)      (2,101,099)      (1,523,294)       (2,155,417)       (7,592,023)

Gain on assignment
    of spectrum                        --               --               --        19,442,000        19,442,000

Intellectual property
    Settlement                         --               --               --         2,425,000         2,425,000

Net earnings (loss)           $(1,263,083)     $(2,114,519)     $(1,207,324)     $ 15,230,864      $ 10,645,938

Per share  - Basic            $     (0.07)     $     (0.12)     $     (0.06)     $       0.77      $       0.58

           - Diluted          $     (0.07)     $     (0.12)     $     (0.06)     $       0.76      $       0.57

<CAPTION>
1998                            March 31         June 30        September 30      December 31        Year End
<S>                           <C>              <C>              <C>              <C>               <C>
Revenues                      $ 1,423,682      $ 1,363,340      $ 1,169,434      $   (308,785)     $  3,647,671

Selling, general and
  administrative expenses       2,643,281        2,833,481        2,870,916         1,342,761         9,690,439

Operating (loss)               (3,405,661)      (3,435,002)      (4,455,325)       (3,130,583)      (14,426,571)

Gain on assignment
    of spectrum                        --               --               --        28,066,109        28,066,109

Net earnings (loss)           $(3,687,749)     $(3,691,356)     $(5,640,915)     $ 23,993,030      $ 10,973,010

Per share  - Basic            $     (0.23)     $     (0.23)     $     (0.33)     $       1.38      $       0.59

           - Diluted          $     (0.23)     $     (0.23)     $     (0.33)     $       1.36      $       0.57
</TABLE>


                                       15
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

      The following should be read in conjunction with the Consolidated
Financial Statements of the Company and Notes thereto and the other financial
information appearing elsewhere in this Form 10-K.

Operations

      From 1992 until November 1998, we operated a 49-channel analog
subscription television service utilizing 1,300 MHz of spectrum under a LMDS
license from the FCC. The FCC commercial operating license was awarded to us in
recognition of our efforts in developing and deploying LMDS technology, and for
spearheading its regulatory approval at the FCC. In September 1997, our pioneer
LMDS license was renewed as a standard LMDS license through February 1, 2006.
The license provides that the spectrum may be used for a wide variety of fixed
wireless purposes, including wireless local loop telephony, high-speed Internet
access and two-way teleconferencing. The license covers 1,150 MHz of spectrum in
the 28 GHz range encompassing the New York Primary Metropolitan Statistical
Area, a region which includes the five boroughs of New York City as well as the
New York Counties of Westchester, Rockland, and Putnam. 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 expected to occur prior to 2002.


      In November 1998, we assigned an 850 MHz portion of our license to WinStar
Communications, Inc. ("WinStar"). In connection with this assignment, we
discontinued our subscription television service. As a result, while we were
able to repay, repurchase and redeem debt and preferred stock in the aggregate
amount of approximately $15.8 million and substantially strengthen our financial
position, we eliminated the only source of revenues that we had at the time. We
are an emerging growth company with no certainty as to the amount of future cash
flows from operations.


      In October 1999, we assigned a 150Mhz portion of our license to NEXTLINK
Communications, Inc. ("NEXTLINK"). From July 1999 to October 1999, pending
regulatory approval of the license assignment, NEXTLINK made monthly payments of
approximately $172,000 to us.


      We have launched a SPEED(SM) Portal to promote broadband high-speed
Internet access on a nationwide basis. Our portal is designed to provide users
with information on how to get high-speed access and how to take advantage of
offerings available to high-speed users. The Portal will give us an opportunity
to generate revenues from Web site advertising, referral fees and commissions on
product sales.

      Currently, we are also conducting a limited pilot program of our SPEED(SM)
broadband super high-speed Internet service and, at December 31, 1999, had
approximately 100 subscribers. SPEED(SM) is delivered via 14 Internet Broadcast
Stations operating under the Company's FCC license covering Metro New York. Our
Internet broadcast signal is currently not available at all locations in our
license area. A full marketing effort will not commence until new LMDS equipment
becomes commercially available with cost and performance that allow
implementation of SPEED(SM) service on an economically attractive basis. We
cannot determine when this will occur. In areas where our signal penetrates, we
believe that we offer both small business and residential customers the
lowest-cost, highest downstream speed Internet access solution available.
Revenues from our high-speed Internet service would consist of subscriber fees,
as well as the sales and installations of modems; however, the pricing structure
of the service could change in response to market and other competitive
conditions.


      In September 1999, we announced our equity investment in SPEEDIA, LLC, a
mobile web to wireless information and e-commerce service company. We also
explore additional incubation opportunities in Internet and e-commerce
companies. Our Network Operations Center ("NOC") is an ideal facility to house
new, cost-conscious Internet startups that need Internet backbone connectivity
and quick ramp-up and expansion capabilities.

Twelve Months Ended December 31, 1999 Compared to Twelve Months Ended December
31, 1998

      Revenues decreased $3,036,000 from $3,648,000 for the twelve months ended
December 31, 1998 to $612,000 for the twelve months ended December 31, 1999.
This decrease is a result of the discontinuance of the subscription television
business in November 1998. Revenues for 1999 reflect the early results of the
Company's pilot program to connect its first Internet subscribers and also
include approximately $550,000 received from NEXTLINK pending FCC approval of
the license assignment which occurred in October 1999.

      Selling, general and administrative expenses decreased $4,265,000 from
$9,690,000 for the twelve months ended December 31, 1998 to $5,425,000 for the
twelve months ended December 31, 1999. This decrease is primarily attributable
to the termination of the subscription television business, including reduced
headcount-related


                                       16
<PAGE>

costs as a result of personnel reductions during the third and fourth quarters
of 1998. This decrease is net of an increase in stock-based compensation, which
amounted to $615,000 for the twelve months ended December 31, 1999. During 1999,
the Company issued warrants to purchase shares of the Company's Common Stock and
grants of Common Stock with an estimated fair value aggregating approximately
$615,000. Similar transactions during the year ended December 31, 1998 were not
material.

      Depreciation and amortization decreased $3,395,000 from $6,174,000 for the
twelve months ended December 31, 1998 to $2,779,000 for the twelve months ended
December 31, 1999. This decrease was due primarily to the 1998 write off of
property and equipment previously used by the Company in its discontinued
subscription television service.

      Service costs amounted to $1,479,000 for the twelve months ended December
31, 1998. They are no longer incurred as a result of the termination of
subscription television services in early November 1998. Service costs are fees
paid to providers of television programming and royalties paid to CT&T under a
license agreement between CT&T and SPEEDUSNY.

      Bad debts amounted to $730,000 for the twelve months ended December 31,
1998. They are no longer incurred as a result of the termination of subscription
television services. The Company will generally require residential subscribers
to its high-speed Internet service to provide credit card information for
monthly billings and therefore does not expect any material exposure for bad
debts in the future.

      Equity in loss of associated company amounted to $351,000 for the twelve
months ended December 31, 1999. During 1999, the Company made cash investments
for a 45% equity interest in SPEEDIA, LLC which investment is being accounted
for under the equity method.

      Other income amounted to $624,000 for the twelve months ended December 31,
1999. During 1999, the Company negotiated settlements with vendors. As of
December 31, 1998, the Company had unpaid amounts due to these entities in the
aggregate amount of $1,346,000. The Company has settled these billings for an
aggregate of $722,000, resulting in a savings of $624,000.

      Interest and investment income increased $1,189,000 from $111,000 for the
twelve months ended December 31, 1998 to $1,300,000 for the twelve months ended
December 31, 1999 since the Company had more funds available for investment.

      Interest expense and financing fees decreased $2,452,000 from $2,475,000
for the twelve months ended December 31, 1998 to $23,000 for twelve months ended
December 31, 1999. This decrease is due to the repayment or repurchase of
substantially all of the Company's outstanding debt in the fourth quarter of
1998.

      During the year ended December 31, 1999, the Company recognized a gain of
$19,442,000 from the assignment of a portion of its spectrum, compared to a gain
in the amount of $28,066,000 during the year ended December 31, 1998.

      During the year ended December 31, 1999, the Company recognized an expense
of $2,425,000 from the acquisition of intellectual property rights and the
settlement of litigation.

      During the year ended December 31, 1999, the Company recorded a provision
for income taxes in the amount of $330,000 compared to $302,000 in 1998.

Twelve Months Ended December 31, 1998 Compared to Twelve Months Ended December
31, 1997

      Revenues decreased $1,295,000 from $4,943,000 for the twelve months ended
December 31, 1997 to $3,648,000 for the twelve months ended December 31, 1998.
This decrease is a result of the termination of subscription television services
in early November 1998 and increased service cancellations during the third
quarter of 1998. The decrease is net of increases during the first six months of
1998 as a result of increases in the average subscriber base compared to 1997
and increases in fees charged to subscribers.

      Service costs decreased $835,000 from $2,314,000 for the twelve months
ended December 31, 1997 to $1,479,000 for the twelve months ended December 31,
1998. This decrease is a result of the termination of subscription television
services in early November 1998, increased service cancellations during the
third quarter of 1998 and the termination of service from several premium
program providers. This decrease is net of increases during the first six months
of 1998 as a result of increases in the average subscriber base compared to
1997.

      Selling, general and administrative expenses decreased $3,568,000 from
$13,259,000 for the twelve months ended December 31, 1997 to $9,691,000 for the
twelve months ended December 31, 1998. This decrease is


                                       17
<PAGE>

primarily attributable to reduced headcount-related costs as a result of
personnel reductions at the end of 1997 and during the first and third quarters
of 1998. This decrease is net of increases in legal expenses and other costs
incurred in connection with several financings during 1998 and defending against
or settling certain claims brought against the Company.

      Depreciation and amortization increased $2,293,000 from $3,881,000 for the
twelve months ended December 31, 1997 to $6,174,000 for the twelve months ended
December 31, 1998. This increase is due primarily to 1998 having a full year of
depreciation on customer premises equipment, equipment for additional
transmitter sites and the continued build-out of the Company's customer
service/administrative facilities in 1997.

      Bad debt expense increased $180,000 from $550,000 for the twelve months
ended December 31, 1997 to $730,000 for the twelve months ended December 31,
1998. This increase is a result of the Company's de-emphasis of subscription
television services, the related reductions in force and the termination of
service from several premium channel programmers. Prior to the termination of
subscription television services in early November 1998, the Company experienced
a high level of service cancellations and a drastic decrease in collections from
subscribers. While the Company has significantly increased its allowance for bad
debts at December 31, 1998 to reflect these developments, it is considering
several options to vigorously pursue collection of past due accounts.

      Interest income decreased $539,000 from $650,000 for the twelve months
ended December 31, 1997 to $111,000 for the twelve months ended December 31,
1998. This decrease is primarily due to decreases in the Company's cash position
as it continued to fund operations and build out its network.

      Interest expense and financing fees increased $1,624,000 from $851,000 for
the twelve months ended December 31, 1997 to $2,475,000 for twelve months ended
December 31, 1998. This increase is a result of a substantial increase in the
level of borrowings by the Company commencing in late 1997, some of which
involved the payment of financing fees, and the costs incurred in connection
with the redemption and repayment of debt.

      During the year ended December 31, 1998, the Company recognized a gain of
$28,066,000 from the assignment of a portion of its spectrum.

      During the year ended December 31, 1998, the Company recorded a provision
for income taxes in the amount of $302,000.

Twelve Months Ended December 31, 1997 Compared to Twelve Months Ended December
31, 1996

      Revenues increased $2,753,000 from $2,190,000 for the twelve months ended
December 31, 1996 to $4,943,000 for the twelve months ended December 31, 1997.
This increase is due primarily to an increase in subscribers.

      Service costs increased $1,139,000 from $1,175,000 for the twelve months
ended December 31, 1996 to $2,314,000 for the twelve months ended December 31,
1997. Service costs are fees paid to providers of television programming and
royalties paid to CT&T under a license agreement between CT&T and SPEEDUSNY.
These costs increase as the subscriber count and associated revenues increase.

      Selling, general and administrative expense increased $3,036,000 from
$10,223,000 for the twelve months ended December 31, 1996 to $13,259,000 for the
twelve months ended December 31, 1997. This increase is primarily attributable
to headcount-related costs (as the Company's employee base rose from 104 at
December 31, 1996 to 130 at December 31, 1997. At the end of 1997, the Company
elected to focus its immediate efforts on bringing its high-speed Internet
access service to market. Due to the increased focus on such service, the
Company de-emphasized its marketing efforts related to selling subscription
television service in the immediate future. In conjunction with this action, on
December 31, 1997, the Company reduced its workforce by 43 people, most of whom
worked in subscription television sales, marketing and operations. In addition,
during 1997, there were increases in promotion and other sales-related expenses
due to the increase in subscribers and in rent expenses due to the addition of
new facilities and cell sites.

      Depreciation and amortization increased $1,623,000 from $2,258,000 for the
twelve months ended December 31, 1996 to $3,881,000 for the twelve months ended
December 31, 1997. This increase is due primarily to the purchase of customer
premises equipment and leasehold improvements at the Company's new
state-of-the-art headend facility, customer care center, and office complex.


                                       18
<PAGE>

      Bad debt expense increased $199,000 from $351,000 for the twelve months
ended December 31, 1996 to $550,000 for the twelve months ended December 31,
1997. These expenses increase as the subscriber count and associated revenues
increase.

      Interest income decreased $642,000 from $1,292,000 for the twelve months
ended December 31, 1996 to $650,000 for the twelve months ended December 31,
1997. This decrease is primarily due to a decrease in the Company's cash
position as the Company continued to expend funds to build out its network and
increase its subscriber base.

      Interest expense and financing fees decreased $254,000 from $1,105,000 for
the twelve months ended December 31, 1996 to $851,000 for twelve months ended
December 31, 1997. This decrease is due primarily to the repayment of the 1997
principal installment of the note to Morgan Guaranty Trust Company of New York
in June 1997.

Liquidity and Capital Resources

      The Company has recorded operating losses and negative operating cash
flows in each year of its operations since inception, primarily due to the
start-up costs in connection with the commercial roll-out of the Company's
system, slower than anticipated consumer acceptance of the Company's now
discontinued subscription television services and expenses incurred in
connection with the LMDS rulemaking proceeding.


      While the Company believes that consummation of the spectrum assignments
in November 1998 and October 1999 for net proceeds of approximately $15.5
million and $19.8 million, respectively, after the repayment and repurchase of
debt and redemption of preferred stock and the sale of Common Stock in July 1999
for net proceeds of approximately $19.8 million have provided sufficient
liquidity to finance its current level of operations through the 2000 fiscal
year, it does not expect to have a positive operating cash flow until such time
as it substantially increases its Internet customer base and/or forms a
strategic alliance for use of its Internet capabilities in the future. The
amount of future 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.


Year 2000 compliance

      The "Year 2000" or "Y2K" concern exists because of the potential for
computer programs to recognize a date using "00" as the year 1900 instead of the
year 2000 which could cause disruption of normal business operations.

      Although the date is now past January 1, 2000, and we have not experienced
immediate adverse impact from the transition to the Year 2000, we cannot provide
assurance that we or our suppliers and customers have not been affected in a
manner that is not yet apparent. In addition, some computer programs that were
date sensitive to the Year 2000 may not have been programmed to process the Year
2000 as a leap year, and any negative consequential effects remain unknown. As a
result, we will continue to monitor our Year 2000 compliance and the Year 2000
compliance of our suppliers and customers.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company believes that its financial instruments as described in
Footnote 2 of this Form 10-K are not subject to material market risk. The
Company's financial instruments at December 31, 1999 and 1998 consist of
short-term investments and long-term debt. The carrying value of each of these
financial instruments approximates its market value, since the investments have
short maturities and the interest rate on the long-term debt periodically
adjusts based on the prime rate.

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The Consolidated Financial Statements of the Company and related Notes
thereto and the financial information required to be filed herewith are included
under Item 14 of this Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE


                                       19
<PAGE>

      None.


                                       20
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

      The table below sets forth the names, ages and titles of the persons who
were directors and/or executive officers of the Company as of March 31, 2000.

Name                                Age   Position
----------------------------------  ---   --------------------------------------

Shant S. Hovnanian................   40   Chairman of the Board of Directors,
                                          President, Chief Executive Officer and
                                          Chief Financial Officer
Vahak S. Hovnanian................   68   Director
Matthew J. Rinaldo................   68   Director
Catherine Petrossian..............   40   Director
Michael Bacon.....................   34   Executive Vice President of Operations

      Shant S. Hovnanian has served as our Chairman of the Board of Directors,
President and Chief Executive Officer since October 1995 and as Chief Financial
Officer since June 1998. He has also served as Chief Executive Officer and a
member of the Board of Representatives of SPEEDUSNY since July 1993. Mr.
Hovnanian formerly served as Chief Executive Officer of CellularVision
Technology & Telecommunications, L.P. ("CT&T") from 1993 to 1995 and continues
to serve on its Board of Representatives. From June 1980 until January 1991, Mr.
Hovnanian served as Executive Vice President of the V. S. Hovnanian Group (the
"Hovnanian Group"), consisting of home building operations, real estate
development and utility companies. In 1995, Mr. Hovnanian served as a U.S.
Delegate to the World Radio Conference of the International Telecommunications
Union in Geneva, Switzerland. Mr. Hovnanian is the son of Mr. Vahak S.
Hovnanian.

      Vahak S. Hovnanian has served as a Director since October 1995 and as a
member of the Board of Representatives of SPEEDUSNY and CT&T since July 1993.
Mr. Hovnanian has served as a principal of Suite 12 and CellularVision Capital
Corporation since 1986 and 1988, respectively, and as Chairman of the Board and
President of the Hovnanian Group since 1968. Mr. Hovnanian is the father of Mr.
Shant S. Hovnanian.

      Matthew J. Rinaldo has served as a Director since February 1996.
Congressman Rinaldo was President of International CellularVision Association
("ICVA"), a Local Multipoint Distribution Service ("LMDS") trade association
from 1993 until its dissolution in 1999. He served as Chairman of the Advanced
Telecommunications Institute of the Stevens Institute of Technology from 1993 to
1996. He was elected to the U.S. House of Representatives in 1973 and re-elected
until his retirement in 1993. During his term in the House of Representatives,
he was the ranking Republican member of the Telecommunications and Finance
Subcommittee of the House Energy and Commerce Committee. Congressman Rinaldo has
been the recipient of numerous honors and awards.

      Catherine Petrossian has served as a Director since July 1999. Ms.
Petrossian has been a partner at the law firm of Sheridan & Petrossian LLP since
1997 where she concentrates in real estate and civil litigation. From 1993 to
1996, she served as an Assistant District Attorney for the County of Nassau and
from 1992 to 1993 worked for a U.S. District Judge in the Southern District of
New York. From 1988 to 1992, Ms. Petrossian was in private practice and
concentrated in Real Estate and Civil litigation. From 1986 to 1988, Ms.
Petrossian was an associate at a Manhattan law firm that concentrated in real
estate law. Ms. Petrossian is admitted to practice in the Courts of New York
State and the United States District courts for the Southern and Eastern
Districts of New York and in the Courts of the State of New Jersey and the
United States District Court for the District of New Jersey.

      Michael Bacon has served as Executive Vice President of Operations since
June 1999. Prior to joining us, Mr. Bacon was employed by Booz Allen & Hamilton,
a leading international management and technology consulting firm, since 1996.
From 1994 to 1996, Mr. Bacon was with Deloitte & Touche Consulting. In
consulting, he led teams that recommended or implemented the establishment of
and improvement in service operations in a variety of industries, including the
telecommunications industry. Mr. Bacon previously worked for three years at
International Business Machines in marketing and sales and for two years with
General Electric Company where he developed information systems.


                                       21
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

      The following table shows, for the fiscal years ended December 31, 1999,
1998 and 1997, the cash compensation we paid, as well as certain other
compensation paid or accrued for those years, to each of the most highly
compensated executive officers of the Company in 1999 (the "Named Executive
Officers") in all capacities in which they served. See Employment Agreements.

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                Annual Compensation
                                         --------------------------------
                                                                   Other
                                                                   Annual  Securities   All Other
                                                                  Compen-  Underlying    Compen-
Name and Principal Position       Year    Salary       Bonus       sation  Options(#)    sation
---------------------------       ----    ------       -----       ------  ----------    ------
<S>                               <C>    <C>          <C>         <C>        <C>         <C>
Shant S. Hovnanian ........       1999   $250,000     $    --     $   --     250,000     $   --
Chairman of the Board of          1998    250,000          --         --       5,400         --
Directors, President, Chief       1997    250,000          --         --          --         --
Executive Officer
and Chief Financial Officer

Michael Bacon .............       1999   $ 80,208     $18,750     $   --     100,000     $   --
Executive Vice President          1998         --          --         --          --         --
                                  1997         --          --         --          --         --
</TABLE>

                            Stock Option Grants Table

      The following table sets forth information concerning individual grants of
options to purchase Common Stock made to Named Executive Officers during 1999.

<TABLE>
<CAPTION>
                            Number of       % of Total                                   Potential Realizable
                           Securities         Options                                      Value at Assumed
                           Underlying       Granted to      Exercise                     Annual Rates of Stock
                             Options         Employees       or Base     Expiration     Price Appreciation for
      Name                   Granted       in fiscal year     Price         Date             Option Term
-----------------------    ----------      --------------  -----------   ----------     ----------------------
                                                                                           5%          10%
                                                                                        --------    ----------
<S>                          <C>                <C>          <C>           <C>          <C>         <C>
Shant S. Hovnanian......     250,000            54.1%        $ 4.84        6/11/09      $761,000    $1,928,000
Michael Bacon...........     100,000            21.6           3.59        6/01/09       226,000       572,000
</TABLE>

      For additional information regarding stock option grants to employees in
1999, see "Notes to Consolidated Financial Statements--Note 5, Stockholders'
Equity."


                                       22
<PAGE>

                      Aggregate Stock Option Exercise Table

      The following table sets forth information regarding the number and value
of unexercised Options that were held by the Named Executive Officers as of
December 31, 1999. None of the Named Executive Officers exercised any options
during 1999.

<TABLE>
<CAPTION>
                                                          Number of
                                                         Securities
                                                         Underlying
                            Number of                    Unexercised
                              Shares                       Options             Value of Unexercised
                             Acquired      Value         Exercisable/          In-the-Money Options
        Name               on Exercise   Realized       Unexercisable        Exercisable/Unexercisable
        ----               -----------   --------    -------------------    -------------------------
<S>                             <C>          <C>       <C>                        <C>
Shant S. Hovnanian......        0           $0           255,400/0                  $21,000/0
Michael Bacon...........        0            0         25,000/75,000              30,000/89,000
</TABLE>

      For additional information regarding stock option grants to employees in
1999, see "Notes to Consolidated Financial Statements--Note 5, Stockholders'
Equity."

Director Compensation

      Our Directors who are not officers or employees ("Non-Employee Directors")
receive an annual fee of $5,000 and $500 per Board meeting and Board committee
meeting attended. Upon the consummation of our initial public offering in
February 1996, each Non-Employee Director was granted an option to purchase
5,000 shares of Common Stock. Upon their initial election to the Board, new
Non-Employee Directors are granted options to purchase 5,000 shares of Common
Stock that are fully vested and immediately exercisable. Upon the date of each
annual meeting, Non-Employee Directors are granted options to purchase an
additional 1,000 shares of Common Stock that are fully vested and immediately
exercisable. Our Directors of the Company who are officers or employees do not
receive any additional compensation for serving on the Board or on any Board
committee.

Employment Agreements

      We have entered into an employment agreement with Mr. Shant S. Hovnanian
in October 1995. The agreement provides that Mr. Hovnanian will act as our
President and Chief Executive Officer and will devote substantially all of his
working time and efforts to our affairs. Under this agreement, Mr. Hovnanian may
devote such working time and efforts to CT&T and its affiliates as the due and
faithful performance of his obligations under the agreement permits. The
agreement has a one-year term and provides for an annual salary of $250,000,
effective February 7, 1996. Upon the expiration of the initial employment term
on February 7, 1997, the agreement provides for automatic extensions on a
month-to-month basis, unless terminated by either party upon 30 days advance
written notice. Mr. Hovnanian is continuing to serve as Chairman, President and
Chief Executive Officer pursuant to the terms of this employment agreement.

      We have entered into an employment agreement effective June 1, 1999 with
Mr. Michael Bacon. The agreement provides that Mr. Bacon will act as our
Executive Vice President. The agreement, which has no term, provides for an
annual salary of $137,500, subject to periodic review, and bonuses aggregating
$37,500 and an increase in annual salary to $175,000 based on the executive's
attainment of certain performance goals. Under this agreement, Mr. Bacon was
granted 100,000 options to purchase shares of our stock at the market value as
of the effective date of the agreement. 25,000 options become exercisable each
six months after June 1, 1999.


                                       23
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND
DIRECTORS

      The following table sets forth information as of March 31, 2000 with
respect to the beneficial ownership of our stock by (i) each person known by us
to be the beneficial owner of more than 5% of the Common Stock; (ii) each person
serving as a director or director nominee of the Company; (iii) each of our
executive officers, and (iv) all of our directors and executive officers as a
group. Unless otherwise indicated, all shares are owned directly and the
indicated owner has sole voting and dispositive power with respect thereto.

<TABLE>
<CAPTION>
                                                                       Common Stock Beneficially
                                                                              Owned (1)
                                                                       -------------------------
                    Beneficial Owner                                   Number            Percent
                    ----------------                                   ------            -------
<S>                                                                   <C>                 <C>
Shant S. Hovnanian (2)(3) ..............................              3,885,554           19.4 %
Vahak S. Hovnanian (4)(5) ..............................              2,866,655           14.3
Matthew J. Rinaldo (4) .................................                 31,000             .2
Catherine Petrossian (6) ...............................                 16,000             .1
Michael Bacon (7) ......................................                 25,000              1
NEXTLINK Communications, Inc. (8) ......................              2,000,000           10.0
All Directors and Executive Officers as a group (total 5
    persons) ...........................................              6,824,209           34.1 %
</TABLE>

      * Less than 1% of the outstanding Common Stock

      (1) Pursuant to the regulations of the Securities and Exchange Commission
(the "Commission"), shares are deemed to be "beneficially owned" by a person if
such person directly or indirectly has or shares (i) the power to vote or
dispose of such shares, whether or not such person has any pecuniary interest in
such shares, or (ii) the right to acquire the power to vote or dispose of such
shares within 60 days, including any right to acquire through the exercise of
any option, warrant or right.

      (2) Includes options to purchase 255,400 shares of Common Stock pursuant
to the Stock Incentive Plan, which are fully vested and exercisable.

      (3) Includes 100,000 shares of Common Stock owned by Mr. Shant S.
Hovnanian's minor child, Vahak Willem Hovnanian, for which Mr. Hovnanian, as
custodian, has sole voting power.

      (4) Includes options to purchase 25,000 shares of Common Stock pursuant to
the Stock Incentive Plan, which are fully vested and exercisable, including
options for 10,000 shares of Common Stock that will be automatically granted
upon election to the Board at the 2000 Annual Meeting.

      (5) Includes 55,431 and 22,175 shares of Common Stock which Mr. Vahak S.
Hovnanian is required to sell upon the exercise of outstanding warrants at a per
share exercise price of $13.16 and $11.28, respectively. It also includes
100,000 shares of Common Stock which Mr. Hovnanian donated to The Vahak and
Paris Hasmig Foundation, Inc. which Mr. Hovnanian controls, as well as 312,655
shares of Common Stock given to his wife, Paris Hasmig Hovnanian.

      (6) Includes options to purchase 16,000 shares of Common Stock pursuant to
the Stock Incentive Plan, which are fully vested and exercisable, including
options for 16,000 shares of Common Stock that will be automatically granted
upon election to the Board at the 2000 Annual Meeting.

      (7) Includes options to purchase 25,000 shares of Common Stock pursuant to
Mr. Bacon's employment agreement, which are fully vested and exercisable.

      (8) Pursuant to a Stock Purchase Agreement dated as of June 13, 1999, the
Company is required to use its best efforts to cause a NEXTLINK representative
to be elected to the Company's Board. To date, NEXTLINK has not exercised this
right.


                                       24
<PAGE>

Stockholders Agreements.

      Bell Atlantic Corporation has the right to appoint one director (the "Bell
Atlantic Nominee") to the Board, so long as Bell Atlantic shall hold at least 1%
of the shares of Common Stock outstanding on a fully diluted basis. To date,
Bell Atlantic has not exercised this right.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      CT&T License Agreement. Shant S. Hovnanian, our Chairman of the Board,
President and Chief Executive Officer, Vahak S. Hovnanian, a Director of the
Company, and Bernard B. Bossard, a former Director and officer of the Company,
are 80% controlling owners of CT&T. We have operated our super high-speed
broadband wireless network under a technology license from CT&T. See Item 1.
Business - `Intellectual Property' and `Risk Factors' for additional information
on the Founders' agreement in principle to contribute their 80% in CT&T to us.

      Reserved Channel Rights Agreement. The Founders are parties to an
agreement with SPEEDUSNY, pursuant to which they have the nontransferable right
to require SPEEDUSNY to make available 60 MHz of continuous spectrum per
polarization in the spectrum awarded by the Federal Communications Commission
("FCC") for the purpose of providing certain programming (other than telephony,
two-way voice or data communication services) developed by them. The Founders
have agreed to terminate this agreement as a result of the CT&T transaction.

      VisionStar, Inc. Shant S. Hovnanian, our Chairman of the Board, President
and Chief Executive Officer, is the sole stockholder of VisionStar, a company
that holds a license from the FCC, granted in May 1997, to construct, launch and
operate a telecommunications satellite operating in the radio frequency range of
28 GHz, which is commonly referred to as the Ka-band, positioned over the
continental United States. If VisionStar constructs and launches a satellite and
begins providing service, we might purchase services from it, and any such
transaction might involve a conflict of interest for Mr. Hovnanian.

      According to the FCC order granting the license, VisionStar proposes to
offer broadband services covering the nation and in urban areas in conjunction
with broadband service operators such as LMDS operators. These broadband
services may include high-speed Internet access, high-speed data services, video
teleconferencing distance learning and video programming.

      In 1998, we received an offer from Mr. Hovnanian to convey to us all of
the outstanding shares of VisionStar, together with related patent application
rights for reimbursement of his verifiable VisionStar-related out-of-pocket
expenses. Through a special committee of the Board of Directors, the Company had
been considering Mr. Hovnanian's offer. At a meeting of the Board of Directors
in August 1998, the Board voted 2-1 against Mr. Hovnanian's offer, with Mr.
Hovnanian voting against the offer as a result of an earlier representation that
he would vote in the same manner as Mr. Bossard, who voted against the offer
based on his belief that the VisionStar satellite license was already an asset
of the Company and that VisionStar and Mr. Hovnanian held the asset in trust for
the Company. Thereafter, the Board and Mr. Hovnanian have had additional
discussions concerning the acquisition of VisionStar.

      In May 1999, Mr. Bossard changed his previous position on the Company's
ownership of VisionStar and commenced a lawsuit in New York State court against
Mr. Hovnanian and VisionStar alleging that, among other things, insofar as Mr.
Hovnanian procured the Ka-band satellite license for his own company,
VisionStar, he breached the partnership agreement among Shant S. Hovnanian,
Vahak S. Hovnanian and Mr. Bossard, which Mr. Bossard claims entitles him to a
free one-third interest in VisionStar arising from the partnership agreement. In
the lawsuit, Mr. Bossard claims that VisionStar represented in its application
to the FCC that the Ka-band license would be used in conjunction with CT&T's
technology. Mr. Bossard is requesting that the court grant him one-third of the
value of VisionStar and its Ka-band license and that the court impose a
constructive trust on the shares and assets of VisionStar, including the Ka-band
license. We are not a party to this lawsuit, either as a plaintiff or a
defendant.

      International CellularVision Association ("ICVA"). SPEEDUSNY has had an
agreement with the International CellularVision Association ("ICVA") to fund,
along with all other members of ICVA, operating expenses of ICVA. SPEEDUSNY
funded $15,000, $209,000 and $264,000 for the years ended December 31, 1999,
1998 and 1997, respectively. The Company had also subleased certain office space
for ICVA on a month-to-month basis which is included in the foregoing totals.
Congressman Matthew J. Rinaldo, a director of the Company, served as President
of ICVA. ICVA was dissolved in 1999.


                                       25
<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Financial Statements and Financial Schedule

(1)   Consolidated Financial Statements                                  Page(s)
                                                                         -------

      Report of Independent Accountants .............................      29

      Consolidated Balance Sheets as of December 31, 1999 and
      December 31, 1998 .............................................      30

      Consolidated Statements of Operations for the years ended
      December 31, 1999, 1998 and 1997 ..............................      31

      Consolidated Statements of Changes in Partners' Capital
      and Stockholders' Equity for the years ended December 31, 1999,
      1998 and 1997 .................................................      32

      Consolidated Statements of Cash Flows for the years ended
      December 31, 1999, 1998 and 1997 ..............................      33

      Notes to Consolidated Financial Statements ....................      34-41

(2)   Financial Statement Schedule

      Schedule II-- Valuation and Qualifying Accounts................      S-1

(b) Reports on Form 8-K

      The Company filed a Current Report on Form 8-K, for an event specified in
      Item 5 of such report, on October 26, 1999.

(c) Exhibits

      3.1a    Certificate of Incorporation. (1)

      3.1b    Certificate of Ownership and Merger of CVUSA Merger Corporation
              With and Into Cellularvision USA, Inc. (8)

      3.2     By-laws. (1)

      4.1     Form of Common Stock Certificate. (1)

      4.2     Stockholders Agreement, dated as of January 12, 1996, by and among
              CellularVision USA, Inc., Shant S. Hovnanian, Bernard B. Bossard
              and Vahak S. Hovnanian. (1)

      10.1    Amended and Restated License Agreement, together with Addendum to
              License Agreement, each dated as of July 7, 1993, by and between
              CellularVision Technology & Telecommunications, L.P. and
              CellularVision of New York, L.P. and certain amendments and
              supplements thereto. (1)

      10.2    Reserved Channel Rights Agreement, dated as of July 7, 1993, by
              and between Vahak S. Hovnanian, Shant S. Hovnanian, Bernard B.
              Bossard, CellularVision of New York, L.P. and Bell Atlantic
              Ventures XXIII, Inc. (1)

      10.4a   CellularVision USA, Inc. 1995 Stock Incentive Plan. (1)

      10.4b   CellularVision USA, Inc. 1995 Stock Incentive Plan. (Amended and
              Restated as of December 2, 1998) (8)

      10.6    Employment Agreement, dated as of October 18, 1995, between
              CellularVision USA, Inc. and Shant S. Hovnanian. (1)

      10.7    Employment Agreement, dated as of January 1, 1996, between
              CellularVision USA, Inc. and John Walber. (1)

      10.9    Intercompany Agreement, dated January 12, 1996, by and among
              CellularVision USA, Inc., CellularVision Technology &
              Telecommunications, L.P., CellularVision of New York, L.P., Shant
              S. Hovnanian, Bernard B. Bossard and Vahak S. Hovnanian. (1)


                                       26
<PAGE>

      10.10   Second Addendum to License Agreement, dated as of January 12,
              1996, by and between CellularVision Technology &
              Telecommunications, L.P. and CellularVision of New York, L.P. (1)

      10.11   Corporate Name License and Grant of Future Licenses Agreement,
              dated as of January 12, 1996, by and between CellularVision
              Technology & Telecommunications, L.P. and CellularVision USA, Inc.
              (1)

      10.12   Amended and Restated Agreement of Limited Partnership of
              CellularVision of New York, L.P., dated as of July 7, 1993, by and
              between Hye Crest Management, Inc., Bell Atlantic Ventures, XXIII,
              Inc. and the limited partners set forth on the signature page
              thereto. (1)

      10.13   Master Amendment Agreement, dated as of October 8, 1993, by and
              among Vahak S. Hovnanian, Shant S. Hovnanian, Bernard B. Bossard,
              Hye Crest Management, Inc., Suite 12 Group, CellularVision of New
              York, L.P., CellularVision Technology & Telecommunications, L.P.,
              Bell Atlantic Ventures XIII, Inc. and Philips PGNY Corp. (1)

      10.14   Second Master Amendment Agreement, dated as of December 29, 1993,
              by and among Hye Crest Management, Inc., Suite 12 Group,
              CellularVision of New York, L.P., CellularVision Technology &
              Telecommunications, L.P., Bell Atlantic Ventures XXIII, Inc.,
              Philips PGNY Corp., Morgan Guaranty Trust Company of New York, as
              trustee of the Commingled Pension Trust Fund (Multi-Market Special
              Investment) of Morgan Guaranty Trust Company of New York, and as
              Investment Manager and Agent for an Institutional Investor. (1)

      10.16   Agreement of Lease, dated May 9, 1994, by and between Cellular
              Vision of New York and New York City Economic Development
              Corporation and Sublease, dated March 8, 1995, between
              CellularVision of New York, L.P. and Harvard Fax, Inc. (1)

      10.21   Warrant, dated June 1, 1994, issued by CellularVision of New York,
              L.P. to Alex. Brown & Sons Incorporated. (1)

      10.22   Warrant, dated June 1, 1994, issued by CellularVision of New York,
              L.P. to Mark B. Fisher. (1)

      10.23   Warrant, dated December 29, 1993, issued by CellularVision of New
              York, L.P. to Peter Rinfret. (1)

      10.24   Warrant, dated October 8, 1993, issued by Vahak S. Hovnanian and
              Shant S. Hovnanian to Alex. Brown Financial Corporation. (1)

      10.25   Warrant, dated October 8, 1993, issued by Vahak S. Hovnanian and
              Shant S. Hovnanian to Mark B. Fisher. (1)

      10.27   Agreement, dated as of January 12, 1996, by and among
              CellularVision USA, Inc., CellularVision of New York, L.P., Hye
              Crest Management, Inc., Shant S. Hovnanian, Vahak S. Hovnanian,
              Bernard B. Bossard and Bell Atlantic Ventures XXIII, Inc. (1)

      10.29   Agreement to Purchase LMDS License, dated as of July 10, 1998 by
              and between Winstar Communications, Inc., CellularVision USA, Inc.
              and CellularVision of New York, L.P. (5)

      10.30   Amendment No. 1 to Agreement to Purchase LMDS License, dated as of
              October 6, 1998 among Winstar Communications, Inc., CellularVision
              USA, Inc. and CellularVision of New York, L.P. (6)

      10.31   Amendment No. 2 to Agreement to Purchase LMDS License, dated as of
              October 20, 1998 among Winstar Communications, Inc.,
              CellularVision USA, Inc. and CellularVision of New York, L.P. (7)

      10.32   Stock Purchase Agreement, dated as of June 13, 1999, between
              SPEEDUS.COM, INC. and NEXTLINK Communications, Inc. (9)

      10.33   Strategic Agreement, dated as of June 13, 1999, between
              SPEEDUS.COM, INC. and NEXTLINK Communications, Inc. (9)

      10.34   Amended and Restated Agreement to Assign LMDS License, dated as of
              June 13, 1999, between SPEEDUS.COM. Inc., SPEEDUSNY, L.P. and
              NEXTLINK Communications, Inc. (10)


                                       27
<PAGE>

      21      Subsidiaries of SPEEDUS.COM, Inc. (1)

      23.1    Consent of PricewaterhouseCoopers LLP (2)

      24.1    Powers of Attorney (2)

      27      Financial Data Schedule (2)

----------

      (1)     Incorporated by reference to the Company's Registration Statement
              in Form S-1 (File No. 33-98340) which was declared effective by
              the Commission on February 7, 1996.

      (2)     Filed herewith.

      (3)     Incorporated by reference to the Company's Form 10-Q for the
              quarter ended June 30, 1996 filed on August 12, 1996.

      (4)     An identical note purchase agreement has been entered into by
              CellularVision of New York, L.P. and Morgan Guaranty Trust Company
              of New York, as Investment Manager and Agent for an Institutional
              Investor with respect to the issuance and sale of $3,000,000
              principal amount of Convertible Exchangeable Subordinated Notes of
              CellularVision of New York, L.P.

      (5)     Incorporated by reference to the Company's Form 8-K filed on July
              15, 1998.

      (6)     Incorporated by reference to the Company's Form 8-K filed on
              October 9, 1998.

      (7)     Incorporated by reference to the Company's Form 8-K filed on
              October 22, 1998.

      (8)     Incorporated by reference to the Company's Form 10-K filed on
              March 31, 1999.

      (9)     Incorporated by reference to the Company's Form 10-K filed on June
              28, 1999.

      (10)    Incorporated by reference to the Company's Form 10-K filed on
              October 26, 1999.


                                       28
<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
SPEEDUS.COM, Inc.:

In our opinion, the accompanying consolidated financial statements and financial
statement schedule of SPEEDUS.COM, Inc. (the "Company") listed in Item 14(a) of
this Form 10-K, present fairly, in all material respects, the financial position
of the Company at December 31, 1999 and December 31, 1998, and the consolidated
results of its operations and cash flows for each of the three years in the
period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits in accordance with auditing standards generally accepted in the United
States which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.


PricewaterhouseCoopers LLP


New York, New York


March 30, 2000


                                       29
<PAGE>

                                SPEEDUS.COM, Inc.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                   December 31,
                                                          ------------------------------
                                                              1999              1998
                                                          ------------      ------------
<S>                                                       <C>               <C>
                   ASSETS

Current assets:
    Cash and cash equivalents                             $ 44,613,101      $ 12,902,085
    Due from affiliates                                         93,112            86,444
    Prepaid expenses and other assets                           50,000            23,348
    Accounts receivable, net of allowance for
      doubtful accounts of $1,019,933 for 1998                   8,064                --
                                                          ------------      ------------
    Total current assets                                    44,764,277        13,011,877

Property and equipment, net of accumulated
  depreciation of $8,092,906 and $5,488,766                 10,958,977        12,836,368
Other assets                                                    46,036            67,165
                                                          ------------      ------------
    Total assets                                          $ 55,769,290      $ 25,915,410
                                                          ============      ============

    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable                                      $    554,739      $  2,519,345
    Accrued liabilities                                      1,065,236           807,499
    Current portion of notes payable                           210,938           168,750
    Other current liabilities                                  138,937           203,812
                                                          ------------      ------------
    Total current liabilities                                1,969,850         3,699,406

Notes payable                                                       --           168,750
                                                          ------------      ------------
    Total liabilities                                        1,969,850         3,868,156

Commitments and Contingencies                                       --                --

Stockholders' equity:
    Common stock ($.01 par value; 40,000,000
      shares authorized; 19,670,959 and 17,131,357
      shares issued and outstanding)                           196,710           171,314
    Preferred stock ($.01 par value; 20,000,000
      shares authorized):
         Series A Convertible ($1,000 stated value;
           10,000 shares authorized; no shares issued
           and outstanding)                                         --                --
    Additional paid-in-capital                              79,875,699        58,794,847
    Accumulated deficit                                    (26,272,969)      (36,918,907)
                                                          ------------      ------------
    Stockholders' equity                                    53,799,440        22,047,254
                                                          ------------      ------------
    Total liabilities and stockholders' equity            $ 55,769,290      $ 25,915,410
                                                          ============      ============
</TABLE>

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


                                       30
<PAGE>

                                SPEEDUS.COM, Inc.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                        For the years ended December 31,
                                                ------------------------------------------------
                                                    1999              1998              1997
                                                ------------      ------------      ------------
<S>                                             <C>               <C>               <C>
Revenues                                        $    612,135      $  3,647,671      $  4,943,210
                                                ------------      ------------      ------------
Expenses:
     Selling, general and administrative           5,425,535         9,690,439        13,258,558
     Depreciation and amortization                 2,778,623         6,174,393         3,881,004
     Service costs                                        --         1,479,360         2,314,435
     Bad debts                                            --           730,050           550,290
                                                ------------      ------------      ------------
     Total operating expenses                      8,204,158        18,074,242        20,004,287
                                                ------------      ------------      ------------

Operating loss                                    (7,592,023)      (14,426,571)      (15,061,077)

Equity in loss of associated company                (350,722)               --                --
Other income                                         623,804                --                --
Interest and investment income                     1,300,469           110,719           649,843
Interest expense and financing fees                  (22,590)       (2,475,247)         (851,428)
                                                ------------      ------------      ------------

Loss before gain on assignment of spectrum,
   intellectual property settlement
  and provision for income taxes                  (6,041,062)      (16,791,099)      (15,262,662)

Gain on assignment of spectrum                    19,442,000        28,066,109                --
Intellectual property settlement                  (2,425,000)               --                --
                                                ------------      ------------      ------------

Earnings/(loss) before provision for
  income taxes                                    10,975,938        11,275,010       (15,262,662)

Provision for income taxes                           330,000           302,000                --
                                                ------------      ------------      ------------

Net earnings/(loss)                             $ 10,645,938      $ 10,973,010      $(15,262,662)
                                                ============      ============      ============

Per share:
Basic earnings (loss) per common share          $       0.58      $       0.59      $      (0.95)
                                                ============      ============      ============
Weighted average common shares
    outstanding                                   18,465,974        16,551,417        16,000,000
                                                ============      ============      ============

Diluted earnings (loss) per common share        $       0.57      $       0.57      $      (0.95)
                                                ============      ============      ============
Weighted average common shares
    outstanding                                   18,680,082        17,612,443        16,000,000
                                                ============      ============      ============
</TABLE>

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


                                       31
<PAGE>

                                SPEEDUS.COM, Inc.
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

              For the years ended December 31, 1997, 1998 and 1999

<TABLE>
<CAPTION>
                                                                                                              Total
                                        Common          Preferred      Additional       Accumulated       Shareholders'
                                        Stock             Stock      Paid-in capital       Deficit           Equity
                                     ------------      ----------    ---------------    ------------      -------------
<S>                                  <C>               <C>            <C>               <C>               <C>
Balance, January 1, 1997             $    160,000      $       --     $ 58,267,533      $(31,475,167)     $ 26,952,366

   Net loss                                                                              (15,262,662)      (15,262,662)
                                     ------------      ----------     ------------      ------------      ------------

Balance, December 31, 1997                160,000              --       58,267,533       (46,737,829)       11,689,704

   Issuance of common stock                 1,100                                                                1,100

   Issuance of preferred stock                          3,500,000                                            3,500,000

   Conversion of secured note               8,837                          491,163                             500,000

   Conversion of preferred stock            1,421         (37,000)          35,579                                  --

   Dividends on preferred stock                21                              507           (88,728)          (88,200)

   Redemption of preferred stock                       (3,463,000)                        (1,065,360)       (4,528,360)

   Retirement of common stock                 (65)                              65                                  --

   Net earnings                                                                           10,973,010        10,973,010
                                     ------------      ----------     ------------      ------------      ------------

Balance, December 31, 1998                171,314              --       58,794,847       (36,918,907)       22,047,254

   Issuance of common stock                25,396                       20,407,852                          20,433,248

   Common stock issuance costs                                            (558,000)                           (558,000)

   Stock based compensation                                              1,231,000                           1,231,000

   Net earnings                                                                           10,645,938        10,645,938
                                     ------------      ----------     ------------      ------------      ------------

Balance, December 31, 1999           $    196,710      $       --     $ 79,875,699      $(26,272,969)     $ 53,799,440
                                     ============      ==========     ============      ============      ============
</TABLE>

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


                                       32
<PAGE>

                                SPEEDUS.COM, Inc.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                        For the years ended December 31,
                                                               ------------------------------------------------
                                                                   1999              1998              1997
                                                               ------------      ------------      ------------
<S>                                                            <C>               <C>               <C>
Cash flows from operating activities:
     Net earnings/(loss)                                       $ 10,645,938      $ 10,973,010      $(15,262,662)
     Adjustments to reconcile net loss to net
       cash used in operating activities:
         Depreciation and amortization                            2,778,623         6,174,393         3,881,004
         Stock based compensation                                   615,000                --                --
         Equity in loss of associated company                       350,722                --                --
         Amortization of placement fees                                  --            65,590           115,479
         Provision for doubtful accounts                                 --           730,050           550,290
         Gain on assignment of spectrum                         (19,442,000)      (28,066,109)               --
         Noncash increase in notes payable                               --           250,000                --
         Changes in assets and liabilities:
             Due from affiliates                                     (6,668)           94,568           578,515
             Prepaid expenses and other                             (26,652)           88,710           143,742
             Accounts receivable                                     (8,064)          503,451        (1,253,458)
             Other assets                                            21,129           104,646           (10,829)
             Notes receivable                                            --           171,245           (79,970)
             Accounts payable                                    (1,964,606)          646,028           979,456
             Other current liabilities                              (64,875)          201,051          (252,247)
             Accrued liabilities                                    257,737        (1,285,649)          530,166
                                                               ------------      ------------      ------------
                 Net cash used in operating activities           (6,843,716)       (9,349,016)      (10,080,514)
                                                               ------------      ------------      ------------
Cash flows from investing activities:
     Net proceeds from assignment of spectrum                    19,750,000        31,041,378                --
     Property and equipment additions                              (901,232)       (1,174,898)      (10,261,204)
     Investment in associated company                              (350,722)               --                --
     Intangibles                                                         --                --           (86,106)
                                                               ------------      ------------      ------------
                 Net cash provided by (used in)
                   investing activities                          18,498,046        29,866,480       (10,347,310)
                                                               ------------      ------------      ------------
Cash flows from financing activities:
     Proceeds from exercise of options and warrants                 433,248                --                --
     Proceeds from sale of stock                                 19,750,000         3,501,100                --
     Proceeds from notes payable                                         --         4,691,147         2,996,695
     Repayment of notes payable                                    (126,562)      (11,598,807)       (1,761,200)
     Redemption of preferred stock                                       --        (4,616,560)               --
                                                               ------------      ------------      ------------
                 Net cash (used in) provided by
                   financing activities                          20,056,686        (8,023,120)        1,235,495
                                                               ------------      ------------      ------------
                 Net increase (decrease) in cash
                    and cash equivalents                         31,711,016        12,494,344       (19,192,329)

Cash and cash equivalents, beginning of period                   12,902,085           407,741        19,600,070
                                                               ------------      ------------      ------------

Cash and cash equivalents, end of period                       $ 44,613,101      $ 12,902,085      $    407,741
                                                               ============      ============      ============
Supplemental Cash Flow Disclosures:
     Cash paid for interest during the period                  $     22,238      $  1,161,379      $    611,900
                                                               ============      ============      ============
     Cash paid for income taxes during the period              $    302,000      $         --      $         --
                                                               ============      ============      ============
Noncash transactions:
     Common stock issued for convertible debt                  $         --      $    500,000      $         --
                                                               ============      ============      ============
</TABLE>

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


                                       33
<PAGE>

                                SPEEDUS.COM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Business

Organization

      SPEEDUS.COM, Inc. ("SPEEDUS.COM") resulted from the merger of CVUSA Merger
Corporation ("CVUSA Merger"), a wholly-owned subsidiary of CellularVision USA,
Inc. ("CVUS") formed in December 1998, into CVUS in January 1999 with CVUS as
the surviving corporation. At the time of merger, CVUS changed its name to
SPEEDUS.COM.

      In February 1999, CellularVision of New York, L.P. ("CVNY"), an indirect
wholly-owned subsidiary of SPEEDUS.COM, by amendment to its certificate of
limited partnership, changed its name to SPEEDUSNY.COM, L.P. ("SPEEDUSNY").
Unless the context requires otherwise, the term Company includes SPEEDUS.COM,
SPEEDUSNY and CVCC, a wholly-owned subsidiary of SPEEDUS.COM and the general
partner of SPEEDUSNY.COM..

Business and FCC License

      From 1992 until November 1998, the Company operated a 49-channel analog
subscription television service utilizing 1,300 MHz of spectrum under a Local
Multipoint Distribution Service ("LMDS") license from the Federal Communications
Commission (the "FCC"). In September 1997, the Company's LMDS license was
renewed as a standard LMDS license through February 1, 2006. The Company is
entitled to use its spectrum for a wide variety of fixed wireless purposes,
including wireless local loop telephony, high-speed Internet access and two-way
teleconferencing. The Company's LMDS license entitled it to utilize 1,150 MHz of
spectrum in the 28 GHz range covering New York City, Westchester, Rockland and
Putnam counties. Under FCC rules, the Company has the right to use an additional
150 MHz of spectrum until the first Ka band satellite is launched, an event not
expected to occur prior to 2002.

      In November 1998, as a result of the assignment of 850 MHz of spectrum,
the Company discontinued its subscription television service. In October 1999,
the Company assigned an additional 150 MHz of spectrum.

      The Company is an emerging facilities-based wireless broadband high-speed
Internet company. The Company has launched a portal to promote broadband
high-speed Internet access on a nationwide basis, is conducting a limited pilot
program of its broadband high-speed Internet service in Metro New York and is
exploring incubation opportunities in Internet and e-commerce companies.

2. Summary of Significant Accounting Policies

Financial statements and principles of consolidation

      The consolidated financial statements include the accounts of SPEEDUS.COM,
SPEEDUSNY and CVCC. All significant intercompany accounts and transactions have
been eliminated in consolidation.

      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. The Company has a 45% equity interest in
SPEEDIA, LLC.

Cash and Cash Equivalents

      The Company considers all highly liquid investments purchased with
original maturities of three months or less to be cash equivalents. Cash
equivalents consist of commercial paper.

Concentrations of Credit Risk

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


                                       34
<PAGE>

Revenue Recognition

      Through the year ended December 31, 1998, the majority of the Company's
revenues to date have been derived from subscriber fees, billed one month in
advance and recorded as revenue in the period in which the service was provided.
Deferred revenue associated with advance billings was recorded as a current
liability.

Property and Equipment

      Transmission and headend equipment, customer premises equipment, office
equipment and leasehold improvements are recorded at cost and depreciated on a
straight-line basis over the estimated useful lives of the assets, ranging from
three to seven years. Fiber optic lines are depreciated over an estimated
service life of 40 years. Transmitters are not depreciated until such assets are
constructed or placed in service. Depreciation on customer premises equipment
commences the month following receipt of the equipment. When assets are fully
depreciated, it is the Company's policy to remove the costs and related
accumulated depreciation from its books and records.

      The Company capitalizes subcontractor labor and materials incurred in
connection with the installation of customer premises equipment and depreciates
them over the shorter of the estimated average period that the subscribers are
expected to remain connected to the Company's system, or five years.

Long-lived assets

      The Company periodically evaluates the net realizable value of long-lived
assets, including fixed assets and other assets, relying on a number of factors
including operating results, business plans, economic projections and
anticipated future cash flows. In addition, the Company's evaluation considers
nonfinancial 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.

Intangible Assets

      The costs of field studies to determine line-of-sight transmission
capabilities are capitalized and amortized over five years by the straight-line
method. If a site is abandoned or deemed inoperable, all costs associated with
that site are charged to expense.

Income Taxes

      As required by SFAS No. 109, the Company is required to provide for
deferred tax assets or liabilities arising due to temporary differences between
the book and tax basis of assets and liabilities existing at the time of the
consummation of the incorporation transactions immediately prior to the
Company's initial public offering in 1996.

      As of December 31, 1999, the Company has a deferred tax asset of
approximately $9.1 million and an offsetting valuation allowance of the same
amount. As of December 31, 1998 and 1997, the Company recorded a deferred tax
asset of approximately $14.2 million and $19.2 million, respectively, primarily
related to operating losses and the difference between the book and tax basis of
the Company's investment in CVNY. An offsetting valuation allowance of $14.2
million and $19.2 million, respectively, was established as the Company had no
ability to carryback its losses and a limited earnings history. For the years
ended December 31, 1999 and 1998, the Company has recorded a provision for
income tax of $330,000 and $302,000, respectively, relating to Federal and State
Alternative Minimum Taxes. This provision was calculated after recognizing a
deferred tax benefit of approximately $5,000,000 in each year relating to
carryforward losses.


      For the years ended December 31, 1999 and 1998, the provision for taxes
was comprised of $235,000 and $302,000, respectively, for federal taxes and
$95,000 and $124,000 (the latter included in selling, general and administrative
expenses), respectively, for state taxes.



                                       35
<PAGE>


      A reconciliation of the Company's effective income tax rate and the
federal tax rate is as follows:

                                                           1999      1998
                                                           ----      ----
      Statutory rate                                        34%       34%
      Permanent difference - stock based compensation        2%       --
      State income taxes, net of federal benefit             1%       --
      Change in valuation allowance                        (34%)     (31%)
                                                           ---       ---

      Effective rate                                         3%        3%
                                                           ===       ===

      At December 31, 1999, the Company had net operating loss carryforwards of
approximately $16 million. If not utilized, the net operating loss carryforwards
will expire in various amounts through 2012.




Debt Placement Fees

      Unamortized debt issuance costs were amortized over the term of the
related debt by the effective interest rate method.

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.

Fair Value of Financial Instruments

      Fair value is a subjective and imprecise measurement that is based on
assumptions and market data which require significant judgment and may only be
valid at a particular point in time.

      The Company's financial instruments at December 31, 1999 and 1998 consist
of short-term investments and long-term debt. The carrying value of these
financial instruments approximates market value since the investments have short
maturities and the interest rate on the long-term debt periodically adjusts
based on the prime rate.

Deferred Offering Costs

      Expenses associated with the Company's initial public offering were
capitalized as deferred offering costs at December 31, 1995. Upon the successful
completion of the initial public offering in 1996, these costs were deducted
from the proceeds of the initial public offering and recorded as a reduction to
additional paid-in capital.

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 year ended December 31, 1999, basic and diluted net earnings
available for common shareholders was equal to net earnings. The weighted
average common shares for diluted earnings per share were determined by adding
weighted average shares in the amounts of 42,221 and 171,887 for the assumed
exercise or conversion of stock options and warrants, respectively, to the
weighted average shares outstanding for basic earnings per share for a total of
18,680,082 weighted average shares outstanding for diluted earnings per share.

      For the year ended December 31, 1998, basic net earnings available for
common shareholders in the amount of $9,818,922 was determined by subtracting an
aggregate of $1,154,088, representing the redemption premium and dividends on
the Convertible Preferred Stock, from net earnings of $10,973,010. Diluted net
earnings available for common shareholders in the amount of $9,981,093 was
determined by subtracting the redemption premium in the amount of $1,065,360
from, and adding interest expense on convertible debt in the amount of $73,443
to, net earnings of $10,973,010. The weighted average common shares for diluted
earnings per share were determined by adding weighted average shares in the
amounts of 1,470, 133,740, 212,578 and 713,238 for the assumed exercise or
conversion of stock options, warrants, convertible debt and Convertible
Preferred Stock, respectively, to the weighted average shares outstanding for
basic earnings per share for a total of 17,612,443 weighted average shares
outstanding for diluted earnings per share.

      Stock options and warrants have been excluded from the diluted loss per
share for the year ended December 31, 1997 since their effect would be
antidilutive.

Advertising Costs


                                       36
<PAGE>

      Advertising costs are amortized and charged to operations over the periods
in which the advertising takes place. Advertising expense for the years ended
December 31, 1999, 1998 and 1997 was not material.

3. Related Party Transactions

CT&T License Agreement

      In July 1993, SPEEDUSNY entered into a license agreement with
CellularVision Technology and Telecommunications, L.P. ("CT&T") for use of
certain patented technologies owned by CT&T and for CT&T know-how related to the
LMDS technology. CT&T is 80% owned by Shant S. Hovnanian, the Chairman of the
Board, President, and Chief Executive Officer of the Company, Vahak S.
Hovnanian, a director of the Company, and Bernard B. Bossard, a former officer
and director of the Company, (collectively, the "Founders"). The license
agreement granted SPEEDUSNY the right to utilize the licensed LMDS technology.
Under the license agreement, CT&T earned a royalty equal to 7.5% of gross
revenues on a quarterly basis. The license was to remain in effect until either
the expiration, revocation or invalidation of CT&T patent rights directly
related to the operation of the Company's system, or the year 2028, subject to
earlier termination upon the occurrence of certain events. The license fees were
$288,000 and $324,000 the years ended December 31, 1998 and 1997, respectively.

      At December 31, 1999 and 1998, the Company had amounts due from CT&T of
approximately $93,000 and $86,000, respectively, which represent the Company's
allocation of costs to CT&T, reduced by licensing fees. The Company and CT&T had
agreed to apply licensing fees in excess of $80,000 in each calendar year
otherwise due to CT&T to the outstanding amounts due from CT&T, which will bear
interest at the rate of 6% per annum. The Company has paid $80,000 in licensing
fees to CT&T for each of the years ended December 31, 1998 and 1997.

      Under the license agreement, CT&T may charge the Company a fee of up to
2.5% of the value of equipment purchased through CT&T, and the Company's ability
to procure capital equipment relating to its system from sources other than CT&T
had been limited. Pursuant to an amendment dated January 12, 1996, subject to
certain conditions and except for outstanding purchase orders, the Company is
under no obligation to continue to purchase equipment or supplies from CT&T,
although it may continue to do so. The total amount of equipment purchased from
CT&T for the years ended December 31, 1999 and 1997 was $563,000 and $1,467,000,
respectively. No equipment was purchased from CT&T during 1998.

      In 1997, the Company had outstanding long-term orders with CT&T for the
purchase of equipment in the aggregate amount of approximately $3,200,000, net
of deposits in the aggregate amount of approximately $600,000. Approximately
$1,400,000 of this amount, net of deposits, is represented by set-top converters
and head-end equipment which has been delivered to the Company but have
experienced performance problems, as a result of which CT&T is presently
involved in litigation with the vendor of this equipment. The Company has not
accepted billings for this equipment and no amounts are reflected in the
accompanying financial statements. As a result of discontinuing the subscription
television service, if the Company is ultimately forced to accept and pay for
this equipment, the equipment may have little or no value and would be written
off. Approximately $1,800,000 of this amount, net of deposits, represents
long-term orders which are still outstanding for modems that would be usable by
the Company in its high-speed internet access business. The Company is now
dealing directly with this vendor.

      See note 9 for additional information on CT&T.

Other Transactions

      (a) Shant S. Hovnanian is the sole stockholder of VisionStar, Inc.
("VisionStar"), a company that holds a license from the FCC, granted in May
1997, to construct, launch and operate a telecommunications satellite operating
in the radio frequency range of 28 GHz, which is commonly referred to as the
Ka-band, positioned over the continental United States. If VisionStar constructs
and launches a satellite and begins providing service, the Company might
purchase services from it, and any such transaction might involve a conflict of
interest for Mr. Hovnanian.

      According to the FCC order granting the license, VisionStar proposes to
offer broadband services covering the nation and in urban areas in conjunction
with broadband service operators such as LMDS operators. These broadband
services may include high-speed Internet access, high-speed data services, video
teleconferencing distance learning and video programming.

      In 1998, the Company received an offer from Mr. Hovnanian to convey to it
all of the outstanding shares of VisionStar, together with related patent
application rights for reimbursement of his verifiable VisionStar-related
out-of-pocket expenses. Through a special committee of the Board of Directors,
the Company had been considering Mr.


                                       37
<PAGE>

Hovnanian's offer. At a meeting of the Board of Directors in August 1998, the
Board voted 2-1 against Mr. Hovnanian's offer, with Mr. Hovnanian voting against
the offer as a result of an earlier representation that he would vote in the
same manner as Mr. Bossard, who voted against the offer based on his belief that
the VisionStar satellite license was already an asset of the Company and that
VisionStar and Mr. Hovnanian held the asset in trust for the Company.
Thereafter, the Board and Mr. Hovnanian have had additional discussions
concerning the acquisition of VisionStar.

      In May 1999, Mr. Bossard changed his previous position on the Company's
ownership of VisionStar and commenced a lawsuit in New York State court against
Mr. Hovnanian and VisionStar alleging that, among other things, insofar as Mr.
Hovnanian procured the Ka-band satellite license for his own company,
VisionStar, he breached the partnership agreement among Shant S. Hovnanian,
Vahak S. Hovnanian and Mr. Bossard, which Mr. Bossard claims entitles him to a
one-third interest arising from a partnership acquisition. In the lawsuit, Mr.
Bossard claims that VisionStar represented in its application to the FCC that
the Ka-band license would be used in conjunction with CT&T's technology. Mr.
Bossard is requesting that the court grant him one-third of the value of
VisionStar and its Ka-band license and that the court impose a constructive
trust on the shares and assets of VisionStar, including the Ka-band license. The
Company is not a party to this lawsuit, either as a plaintiff or a defendant.

      (b) The Founders are parties to an agreement with SPEEDUSNY, pursuant to
which they have the nontransferable right to require SPEEDUSNY to make available
60 MHz of continuous spectrum per polarization in the spectrum awarded by the
FCC for the purpose of providing certain programming (other than telephony,
two-way voice or data communication services) developed by them. The Founders
have agreed to terminate this agreement as a result of the CT&T transaction. See
Note 9.

      (c) SPEEDUSNY has had an agreement with the International CellularVision
Association ("ICVA") to fund, along with all other members of ICVA, operating
expenses of ICVA. SPEEDUSNY funded $15,000, $209,000 and $264,000 for the years
ended December 31, 1999, 1998 and 1997, respectively. The Company had also
subleased certain office space for ICVA on a month-to-month basis which is
included in the foregoing totals. Congressman Matthew J. Rinaldo, a director of
the Company, served as President of ICVA. ICVA was dissolved in 1999.

4. Property and Equipment

      Property and equipment consists of the following:

                                                             December 31,
                                                     ---------------------------
                                                         1999            1998
                                                     -----------     -----------
      Transmission and headend equipment .......     $11,770,012     $11,519,726
      Customer premises equipment ..............       3,618,008       2,950,976
      Leasehold improvements ...................       2,259,957       2,298,610
      Office equipment .........................         542,967         553,714
      Fiber optics .............................         375,000         375,000
      Equipment deposits .......................         485,939         627,108
                                                     -----------     -----------
                                                      19,051,883      18,325,134
      Less--accumulated depreciation ...........       8,092,906       5,488,766
                                                     -----------     -----------
                      Property and equipment ...     $10,958,977     $12,836,368
                                                     ===========     ===========

      Depreciation expense was approximately $2,779,000, $6,104,000 and
$3,811,000 for the years ended December 31, 1999, 1998 and 1997, respectively.

5. Stockholders' Equity

Common Stock

      In July 1999, the Company issued 2,000,000 shares of its Common Stock to
NEXTLINK Communications, Inc. for $20,000,000.

Convertible Preferred Stock

      In April 1998, the Company issued 3,500 shares of its Series A Convertible
Preferred Stock ("Convertible Preferred Stock") for $3,500,000. Through November
1998, 37 shares of Convertible Preferred Stock had been


                                       38
<PAGE>

converted into 144,151 shares of Common Stock. The remaining 3,463 shares of
Convertible Preferred Stock with an aggregate stated value of $3,463,000 were
redeemed in November 1998, as a result of the spectrum assignment, for an
aggregate price of $4,616,560, including accrued dividends of $88,200 and a
mandatory redemption premium of $1,065,360.

Stock Options

      The Company's 1995 Stock Incentive Plan, as amended, (the "Plan") provides
for the grant of various stock-based incentives, including non-qualified and
incentive stock options. The Plan has reserved 1,750,000 shares of Common Stock
of the Company, including 500,000 shares that were approved by stockholders at
the Company's 1999 annual meeting, for issuance to employees, directors and
consultants.

      At December 31, 1996, there were 200,700 options outstanding with a
weighted average exercise price of $11.46 per share.

      During 1997, a total of 495,000 non-qualified stock options were granted
at exercise prices ranging from $7 to $9.25 per share and 447,550 options were
cancelled. All options were granted at the market price per share on the date of
grant and have ten-year terms. The weighted average exercise price for the
248,150 options outstanding at December 31, 1997 was $9.98 per share. At
December 31, 1997, there were 1,001,850 shares available for future grant.

      During 1998, a total of 91,700 non-qualified stock options were granted at
an exercise price of $.89 and 191,600 options were cancelled. All options were
granted at the market price per share on the date of grant and have ten-year
terms. The weighted average exercise price for the 148,250 options outstanding
at December 31, 1998, all of which were exercisable, was $4.06 per share. At
December 31, 1998, there were 1,101,750 shares available for future grant.

      During 1999, a total of 462,516 non-qualified stock options were granted
at exercise prices ranging from $3.59 to $5.34 per share, 62,900 options were
exercised and 7,250 options expired. All options were granted at the market
price per share on the date of grant and have ten-year terms. The weighted
average exercise price for the 540,616 options outstanding at December 31, 1999,
112,979 of which were exercisable, was $4.86 per share. At December 31, 1999,
there were 1,046,484 shares available for future grant.

      The Company accounts for the cost of stock-based compensation plans in
accordance with Accounting Principles Board No. 25, "Accounting for Stock Issued
to Employees." Since all options to date have been granted at the market price
per share on the date of grant, no compensation expense has been recognized by
the Company for its stock-based compensation plans during the years ended
December 31, 1999, 1998 and 1997. If the Company had determined compensation
expense based upon the fair value at the date of grant in accordance with
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," compensation expense would have been $1,081,000, $70,000 and
$398,000 for the years ended December 31, 1999, 1998 and 1997, respectively. On
a pro forma basis, for the years ended December 31, 1999, 1998 and 1997: (i) net
earnings/(loss) would have been $9,565,000, $10,900,000 and $($15,661,000),
respectively; (ii) basic earnings/(loss) per share would have been $.52, $.59
and ($.98), respectively, and (iii) diluted earnings/(loss) per share would have
been $.51, $.57 and ($.98), respectively.

      In determining fair value, the stock options were valued using the
Black-Scholes option pricing model. Key assumptions used in valuing the options
granted during 1999 included a risk-free interest rate of 5.0%, an expected life
of 3.5 years and a volatility factor of 131%.

Warrants

      Warrants to purchase up to 190,862 shares of Common Stock of the Company,
issued in 1995, were outstanding at December 31, 1999. Of this amount, an
aggregate of up to 113,256 shares were issuable by the Company, and 77,606
shares were issuable by Vahak S. Hovnanian, a director of the Company, from his
Common Stock holdings. The warrants issued by the Company have a ten-year term
and an exercise price ranging from $12.50 to $15.03 per share.

      During 1998, a total of 302,000 warrants were issued at exercise prices
ranging from $.01 to $5 per share. All warrants have five-year terms.

      During 1999, a total of 550,000 warrants were issued at exercise prices
ranging from $1 to $4.97 per share and 377,000 warrants were exercised. The
warrants have three to five-year terms.


                                       39
<PAGE>

      388,256 of the 588,256 outstanding warrants at December 31, 1999 have
registration rights in respect of the shares of Common Stock issuable upon
exercise.

      In connection with the issuance of warrants and grants of Common Stock
during the year ended December 31, 1999, stock based compensation in the
aggregate amount of $1,231,000 for financial advisory and other services (and
included in selling, general and administrative expenses) ($615,000), common
stock issuance costs ($308,000) and gain on assignment of spectrum ($308,000)
was recorded.

6. Sale of Spectrum

      a. In October 1999, pursuant to an agreement dated June 13, 1999, as
amended, between the Company and NEXTLINK Communications, Inc. ("NEXTLINK"), the
Company consummated the assignment of 150 MHz of spectrum to NEXTLINK for
$20,000,000 in cash. The transaction was subject to regulatory approval, which
was received. From July 1999 to October 1999, pending regulatory approval of the
license assignment, NEXTLINK made monthly payments of approximately $172,000 to
the Company. In connection with this transaction, the Company incurred closing
costs and commissions in the aggregate amount of approximately $308,000.

      b. In November 1998, pursuant to an agreement dated July 10, 1998, as
amended, between the Company and WinStar Communications, Inc. ("WinStar"), the
Company consummated the assignment of 850 MHz of spectrum to WinStar for
$32,500,000 in cash. The transaction was subject to regulatory and shareholder
approval, both of which were received. At the time of closing, the Company
repaid $3,500,000 which it had borrowed from WinStar in July 1998. The Company
had used these loan proceeds to meet outstanding obligations and finance its
operations pending the closing. As previously indicated, at the time of closing
or shortly thereafter, the Company also repaid the Subordinated Exchange Notes
held by Morgan Guaranty for an aggregate amount of $6,569,355, redeemed the
Convertible Preferred Stock held by Marshall for an aggregate amount of
$4,616,560 and repurchased the Secured Convertible Promissory Note held by
Newstart for an aggregate amount of $1,093,339. In connection with this
transaction, the Company paid an investment banking fee of $1,050,000 and
incurred other closing costs in the aggregate amount of approximately $409,000.
The assignment of spectrum required the Company to discontinue its subscription
television services. As a result, the Company wrote off property and equipment
with a carrying value aggregating approximately $2,975,000, represented by
headend equipment, set-top converters and capitalized installation costs, which
amount has been included in 'Gain on assignment of spectrum'.

7. Commitments and Contingencies

Noncancellable Leases

      At December 31, 1999, future minimum lease payments due under
noncancellable leases are as follows:

            2000..............................        $436,000
            2001..............................         415,000
            2002..............................         388,000
            2003..............................         330,000
            2004..............................         247,000
                                                    ----------
                         Total................      $1,816,000
                                                    ==========

      Rent expense was approximately $295,000, $766,000 and $695,000 for the
years ended December 31, 1999, 1998 and 1997, respectively.


                                       40
<PAGE>

Employment Contracts

      The Company entered into an employment agreement with Shant S. Hovnanian
in October 1995. The agreement provides that Mr. Hovnanian will act as President
and Chief Executive Officer of the Company and will devote substantially all of
his working time and efforts to the Company's affairs. Pursuant to the
agreement, Mr. Hovnanian may devote such working time and efforts to CT&T and
its affiliates as the due and faithful performance of his obligations under the
agreement permits. The agreement has a one-year term and provides for an annual
salary of $250,000, effective February 7, 1996. Upon the expiration of the
initial employment term on February 7, 1997, the agreement provides for
automatic extensions on a month-to-month basis, unless terminated by either
party upon 30 days advance written notice. Mr. Hovnanian is continuing to serve
as Chairman, President and Chief Executive Officer pursuant to the terms of this
employment agreement.

8. Legal Proceedings

      (a) At December 31, 1999, the Company was party to an arbitration
proceeding with Charles N. Garber, its former Chief Financial Officer, who
asserted that his employment agreement was breached by the Company's failure to
pay him guaranteed minimum annual performance bonuses and certain other matters.
Mr. Garber sought damages in an amount estimated to total $488,000, plus his
costs and reasonable attorney's fees. In March 2000, the arbitrator ruled in
favor of Mr. Garber but only awarded him $100,000, plus costs, attorney's fees
and interest of approximately $92,000. This amount has been accrued at December
31, 1999.

      (b) The Company has been named in 3 lawsuits brought in the normal course
of its business in the aggregate amount of approximately $575,000, exclusive of
expenses. The Company believes it has substantial defenses to a material portion
of these claims and is prepared to pursue litigation if a reasonable and
structured settlement cannot be reached with the parties. In the event adverse
judgments are rendered in the same period, the aggregate effect could be
material to the Company's financial position and it could have a material effect
on operating results in the period in which the matters are resolved.

9. Intellectual Property and Settlement of Litigation

      The Company acquired 20% of CT&T and certain other rights from a U.S.
subsidiary of Philips Electronics, N. V. ("Philips"). CT&T is a holder of a
portfolio of fundamental broadband wireless patents and licenses. The Company
has operated its super high-speed Internet broadband wireless network under a
technology license from CT&T.

      The acquisition of Philips' interest in CT&T was part of a settlement of
litigation commenced by M/A-COM, a unit of Tyco International Ltd. The Company's
portion of the settlement was $2.4 million which has been expensed for the year
ended December 31, 1999. The Founders have agreed in principle to contribute
their 80% interest in CT&T to the Company as part of the settlement agreement.

10. Subsequent Events

      In February 2000, the Company, through BroadBand Patents, LLC, a new
wholly-owned subsidiary, purchased certain intellectual property from GEC
Partners, LLP, an unaffiliated third party, pertaining to wireless transmissions
including U. S. Patent 5,594,937 titled "System for the transmission and
reception of directional radio signals utilizing a gigahertz implosion
concept.". The purchase price of $2,000,000 was paid $200,000 in cash and
$1,800,000 by the issuance of 332,942 shares of the Company's Common Stock.


                                       41
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in New York, New York
on January 24, 2001.

                                       SPEEDUS.COM, Inc.


                                       s/s Shant S. Hovnanian
                                       ----------------------
                                       Shant S. Hovnanian
                                       President, Chief Executive Officer and
                                       Chairman of the Board of Directors

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
       Signature                               Title                             Date
       ---------                               -----                             ----
<S>                              <C>                                         <C>
s/s  Shant S. Hovnanian          Chairman of the Board of Directors,         January 24, 2001
-------------------------        President and Chief Executive and
Shant S. Hovnanian               Financial Officer



*                                Controller and Chief Accounting Officer     January 24, 2001
-------------------------
Angela M. Vaccaro


*                                Director                                    January 24, 2001
-------------------------
Vahak S. Hovnanian


*                                Director                                    January 24, 2001
-------------------------
William F. Leimkuhler


*                                Director                                    January 24, 2001
-------------------------
Jeffrey Najarian

* By: s/s Shant S. Hovnanian
  --------------------------
  Attorney-in-Fact
</TABLE>


                                       42
<PAGE>

                                SPEEDUS.COM, Inc.

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

              For the Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                             Balance at     Charged to
                                             Beginning      Costs and                   Balance at end
             Description                     of Period       Expenses      Deductions     of Period
             -----------                     ---------       --------      ----------     ---------
<S>                                          <C>            <C>            <C>            <C>
1999
  Allowance for doubtful accounts ......     $1,019,933     $        0     $1,019,933     $        0
                                             ==========     ==========     ==========     ==========

1998
  Allowance for doubtful accounts ......     $  290,984     $  730,050     $    1,101     $1,019,933
                                             ==========     ==========     ==========     ==========

1997
  Allowance for doubtful accounts ......     $  124,370     $  550,290     $  383,676     $  290,984
                                             ==========     ==========     ==========     ==========
</TABLE>