Speedus Announces Third Quarter 2006 Results

NEW YORK, Nov. 14  /PRNewswire-FirstCall/ -- Speedus Corp. (NASDAQ:SPDE) today announced a net loss of $4.5 million, or $0.28 per share on a fully diluted basis, for the nine months ended September 30, 2006 compared to a net loss of $3.2 million, or $0.20 per share on a fully diluted basis, for the nine months ended September 30, 2005. The loss before depreciation and amortization and benefit from income taxes was $3.9 million for the nine months ended September 30, 2006 compared to a loss before depreciation and amortization and benefit from income taxes of $2.9 million for the nine months ended September 30, 2005.

For the quarter ended September 30, 2006, the Company reported a net loss of $1.0 million, or $0.06 per share on a fully diluted basis, compared to a net loss of $0.9 million, or $0.06 per share on a fully diluted basis, for the quarter ended September 30, 2005. The loss before depreciation and amortization and benefit from income taxes was $0.8 million for the quarter ended September 30, 2006 compared to a loss before depreciation and amortization and benefit from income taxes of $1.0 million for the quarter ended September 30, 2005.

For the nine months ended September 30, 2006, total operating expenses, before depreciation and amortization, amounted to $4.8 million compared to $4.3 million for the nine months ended September 30, 2005. This increase is primarily a result of increases in non-cash stock based compensation, the Company's wireless initiatives, including Wibiki, and patent litigation.

In September 2006, Zargis Medical was selected by The Wall Street Journal as a runner-up in the Medical Devices category for Cardioscan(R), the world's first computer-aided stethoscope that aids physicians in identifying and evaluating murmurs and other heart sounds that may be indicative of cardiovascular disease. In selecting award winners, The Wall Street Journal's panel of judges considered whether the submitted innovations represented breakthroughs from conventional methods, rather than just incremental improvements.

In October 2006, an abstract from a clinical study conducted by Zargis in collaboration with The Johns Hopkins University School of Medicine was presented at the American Academy of Pediatrics National Conference & Exhibition in Atlanta. The study assessed the impact of the Cardioscan system on referral decisions made by primary care physicians regarding heart murmurs- which are potential signs of heart disease. In the study, a group of primary care physicians were able to reduce their rates of unnecessary referrals by an average of 41%. This indicates Cardioscan's potential to generate a large reduction in wasted healthcare spending. The study also revealed a reduction in the physicians' false negative rates by an average of 46%, suggesting that Cardioscan could increase a physician's ability to identify those pathological heart conditions that are difficult to detect with a standard stethoscope.

Zargis has also been awarded a $101,000 contract by the U.S. Army to develop pilot-versions of a telemedicine system for use in cardiology. Under the terms of the contract, Zargis will develop prototypes of a system designed to record, synchronize and analyze heart sounds, lung sounds and ECG signals in pediatric patients who are being cared for by remote military treatment facilities. The system will be fully integrated with an existing Army telehealth platform.

In May 2006, the Company filed two separate complaints against Cellco Partnership (d/b/a Verizon Wireless) in United States District Court for the Southern District of Florida, in which it asserts Verizon Wireless is infringing two of its patents. Verizon Wireless is a joint venture of Verizon Communications Inc. and Vodafone Group PLC. In July and September 2006, these two cases were transferred to the United States District Court for the District of New Jersey. In June 2006, the Company also filed two separate complaints against Alltel Corp. in United States District Court for the Southern District of Florida, in which it asserts Alltel is infringing two of its patents. In October 2006, these two cases were consolidated.

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

About Speedus Corp.

Additional information on Speedus Corp. may be obtained at http://www.speedus.com/ or by contacting Peter Hodge at 888-773-3669 (ext. 23) or  .

Statements contained herein that are not historical facts, including but not limited to statements about the Company's product, corporate identity and focus, may be forward-looking statements that are subject to a variety of risks and uncertainties. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward- looking statements made by the Company, including, but not limited to, the continuing development of the Company's sales, marketing and support efforts.

These financial statements do not include all information and notes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the Company's 2005 audited consolidated financial statements and notes thereto on Form 10-K and quarterly reports on Form 10-Q. Operating results for the three and nine months ended September 30, 2006 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006.

                              SPEEDUS CORP.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                               (unaudited)

                              Three months ended        Nine months ended
                                 September 30,            September 30,
                               2006        2005         2006         2005

  Revenues                   $210,179    $293,768     $638,318     $803,494

  Expenses:
     Selling, general and
      administrative          699,044     981,196    3,161,916    2,921,117
     Research and
      development             482,199     389,238    1,384,346    1,085,507
     Depreciation and
      amortization            174,272     229,473      617,665      692,849
     Cost of sales             70,969      92,819      230,215      263,680
     Total operating
      expenses              1,426,484   1,692,726    5,394,142    4,963,153

  Operating loss           (1,216,305) (1,398,958)  (4,755,824)  (4,159,659)

  Investment income/(loss)    232,460     151,467      268,109      432,720
  Minority interest              ---       35,681         ---       159,294

  Earnings/(loss) before
   benefit from
   income taxes              (983,845) (1,211,810)  (4,487,715)  (3,567,645)

  Benefit from income
   taxes                         ---      321,539         ---       321,539

  Net loss                  $(983,845)  $(890,271) $(4,487,715) $(3,246,106)

  Per share:
  Basic/diluted loss per
   common share                $(0.06)     $(0.06)      $(0.28)      $(0.20)
  Weighted average common
   shares outstanding -
       basic/diluted       16,024,108  16,164,823   16,063,362   16,203,146



                              SPEEDUS CORP.
                       CONSOLIDATED BALANCE SHEETS
                               (unaudited)

                                         September 30,      December 31,
                                              2006              2005
                ASSETS
  Current assets:
    Cash and cash equivalents            $11,095,515       $18,563,088
    United States Treasury bills           4,989,300            ---
    Marketable securities                    242,201         1,174,825
    Prepaid expenses and other               183,866           182,008
    Total current assets                  16,510,882        19,919,921
  Property and equipment, net of
   accumulated depreciation
   of $464,694 and $321,256                  663,853           426,201
  Other intangible assets, net of
   accumulated amortization
   of $3,081,360 and $2,607,133              148,684           622,911
  Other investments                          800,000           800,000
  Other assets                                68,716           691,444
    Total assets                         $18,192,135       $22,460,477

    LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                         $87,500           $68,692
    Accrued liabilities                      928,325         1,215,859
    Total current liabilities              1,015,825         1,284,551

  Minority interest                           ---               ---

  Commitments and Contingencies

  Stockholders' equity:
    Common stock ($.01 par value;
     50,000,000 shares authorized;
     21,750,174 shares issued)               217,502           217,502
    Preferred stock ($.01 par value;
     20,000,000 shares authorized):
         Series A Junior
         Participating ($.01 par
          value; 4,000 shares authorized;
          no shares issued
          and outstanding)                    ---               ---
    Additional paid-in-capital            91,343,756        90,724,450
    Treasury stock (at cost;
     5,730,884 and 5,632,275 shares)      (6,016,070)       (5,884,863)
    Accumulated deficit                  (68,368,878)      (63,881,163)
    Stockholders' equity                  17,176,310        21,175,926
    Total liabilities and
     stockholders' equity                $18,192,135       $22,460,477


DATASOURCE: Speedus Corp.



CONTACT:  Peter Hodge of Speedus Corp., 1-888-773-3669 ext. 23,

 



Web site:  http://www.speedus.com/

http://www.speedus.com/patent-infringement-litigation.php 

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