United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)

|X|   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

      For the quarterly period ended September 30, 2005

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

      For the transition period from ________________ to ________________

      Commission file number 001-12000

                           EUROWEB INTERNATIONAL CORP.
                           ---------------------------
        (Exact name of small business issuer as specified in its charter)

           Delaware                                             13-3696015
           --------                                             ----------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                       Vaci ut 141, 1138 Budapest, Hungary
                       -----------------------------------
                    (Address of principal executive offices)

            +36-1-8897000                             +36-1-8897100
      Issuer's telephone number                 Issuer's facsimile number

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirement for the past 90 days. Yes  |X|  No  |_|

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of Exchange Act). Yes |_|No |X|

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

Common Stock, $.001 par value                               5,784,099
-----------------------------                  ---------------------------------
              (Class)                         (Outstanding at November 14, 2005)

Transitional Small Business Disclosures Format (Check one): Yes |_| No |_|



                           EUROWEB INTERNATIONAL CORP.

                                      INDEX

PART I.  Financial Information

Item 1.  Financial Statements (Unaudited)

   Condensed Consolidated Balance Sheet as of September 30, 2005               2

   Condensed Consolidated Statements of Operations and Comprehensive
      Income (Loss) for the three months ended September 30, 2005 and
      2004 (restated) and the nine months ended September 30, 2005 and
      2004 (restated)                                                          3

   Condensed Consolidated Statements of Stockholders' equity for the
      nine months ended September 30, 2005 and twelve months ended
      December 31, 2004                                                        4

   Condensed Consolidated Statements of Cash Flows for the nine months
      ended September 30, 2005 and 2004 (restated)                             5

   Notes to Condensed Consolidated Financial Statements                        6

Item 2.  Management's Discussion and Analysis of
            Financial Condition and Results of Operations                     17

Item 3.  Controls and Procedures                                              28

PART II. Other Information                                                    29

Signature                                                                     30


                                       2


                           EUROWEB INTERNATIONAL CORP.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (Unaudited)



                                                                         September 30, 2005
                                                                            ------------
                                                                         
ASSETS
  Current Assets
    Cash and cash equivalents                                               $  4,863,296
    Trade accounts  receivable, net of allowance for doubtful accounts of      4,501,859
$796,189
    Unbilled receivables                                                       1,221,809
    Deferred tax assets                                                           31,678
    Prepaid expenses and other current assets                                    924,572
                                                                            ------------
         Total current assets                                                 11,543,214

  Property and equipment, net                                                  6,642,425
  Intangibles - customer contracts, net                                        1,283,455
  Goodwill                                                                     5,806,181
  Navigator - pre-acquisition cost                                               271,808
  Other assets                                                                   383,074
                                                                            ------------
       Total assets                                                         $ 25,930,157
                                                                            ============

LIABILITIES AND STOCKHOLDERS' EQUITY

  Current Liabilities
    Trade accounts payable                                                  $  3,326,004
    Pantel loan payable - current portion                                        472,152
    Current portion of bank loans                                                279,437
    Notes payable                                                                175,554
    Other current liabilities                                                    555,531
    Accrued expenses                                                           3,112,036
    Deferred IRU revenue                                                          46,000
    Deferred other revenue                                                       526,923
                                                                            ------------
       Total current liabilities                                               8,493,637

Noncurrent Liabilities
   Deferred tax liabilities                                                       31,678
   Deferred IRU revenue                                                          871,035
   Pantel loan payable                                                           236,076
   Bank loans                                                                    439,352
   Lease obligations                                                             123,319

Commitments and contingencies

   Stockholders' Equity
   Preferred stock, $.001 par value - Authorized 5,000,000 shares;
      no shares issued or outstanding                                                 --
   Common stock, $.001 par value - Authorized 35,000,000 shares;
       5,590,655 shares issued of which 5,342,533 shares are outstanding
       and 248,122 shares are held in escrow                                       5,342
   Additional paid-in capital                                                 49,810,246
   Accumulated deficit                                                       (34,193,589)
   Accumulated other comprehensive income                                        113,061
                                                                            ------------
      Total stockholders' equity                                              15,735,060
                                                                            ------------
      Total liabilities and stockholders' equity                            $ 25,930,157
                                                                            ============


     See accompanying notes to condensed consolidated financial statements.


                                       3


                           EUROWEB INTERNATIONAL CORP.
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                   (Unaudited)



                                                                           Three months ended             Nine months ended
                                                                              September 30                  September 30
                                                                      ----------------------------    ----------------------------
                                                                         2005             2004            2005            2004
                                                                      ------------    ------------    ------------    ------------
                                                                                       (Restated)                      (Restated)
                                                                                                          
Revenues
Third party revenues                                                  $ 10,364,348    $  7,502,144    $ 30,622,486    $ 15,993,379
Related party revenues                                                          --       2,096,190       1,768,358       5,533,618
                                                                      ------------    ------------    ------------    ------------
          Total revenues                                                10,364,348       9,598,334      32,390,844      21,526,997

Cost of revenues (Exclusive of depreciation and amortization
  shown separately below) 
Third party cost of revenues                                             6,651,513       4,474,572      20,677,378      10,103,607
Related party cost of revenues                                                  --       1,785,613       1,164,692       4,454,898
                                                                      ------------    ------------    ------------    ------------
          Total cost of revenues (Exclusive of depreciation and
            amortization shown separately below)                         6,651,513       6,260,185      21,842,070      14,558,505

Operating expenses
   Compensation and related costs                                          924,457         913,939       2,514,864       2,137,468
   Consulting, director and professional fees                              912,873       1,140,152       2,670,795       2,012,980
   Collection of written-off receivable                                         --              --        (265,630)             --
   Other selling, general and administrative expenses                      580,785       1,152,618       2,719,022       2,350,118
   Depreciation and amortization                                           890,428         762,531       2,649,330       1,314,925
                                                                      ------------    ------------    ------------    ------------
      Total operating expenses                                           3,308,543       3,969,240      10,288,381       7,815,491

Income (loss) from operations                                              404,292        (631,091)        260,393        (846,999)

Interest income (expense)
   Interest income                                                           8,413          24,326          23,871         141,695
   Interest expense                                                        (67,277)       (112,590)       (261,581)       (283,043)
                                                                      ------------    ------------    ------------    ------------
    Net interest expense                                                   (58,864)        (88,264)       (237,710)       (141,348)

  Gain from sale of subsidiary                                                  --              --              --          28,751
  Other income                                                                  --              --         170,000              --
                                                                      ------------    ------------    ------------    ------------

Income (loss) before income taxes                                          345,428        (719,355)        192,683        (959,596)

Income tax expense                                                          (8,678)         (4,436)       (137,016)        (50,455)
                                                                      ------------    ------------    ------------    ------------

Income (Loss) from continuing operations                                   336,750        (723,791)         55,667      (1,010,051)
Income from discontinued operations - Euroweb Slovakia                          --           1,601       1,733,470         260,901
Income (loss) from discontinued operations - Euroweb Czech Republic                          3,653                         (66,192)

Net income (loss)                                                          336,750        (718,537)      1,789,137        (815,342)

Other comprehensive income (loss)                                          (38,909)          2,422           4,795         (20,109)
                                                                      ------------    ------------    ------------    ------------

Comprehensive income (loss)                                           $    297,841    $   (716,115)   $  1,793,932    $   (835,451)
                                                                      ============    ============    ============    ============

Income (loss) per share, before discontinued operations               $       0.06    $      (0.14)   $       0.01    $      (0.20)
Income per share from discontinued operations                         $       0.00    $       0.00    $       0.32    $       0.04
                                                                      ------------    ------------    ------------    ------------
Net income (loss) per share, basic                                    $       0.06    $      (0.13)   $       0.33    $      (0.16)
                                                                      ============    ============    ============    ============
Net income (loss) per share, diluted                                  $       0.06    $      (0.13)   $       0.33    $      (0.16)
                                                                      ============    ============    ============    ============
Weighted average number of shares outstanding, basic                     5,342,533       5,342,533       5,342,533       4,948,753
Weighted average number of shares outstanding, diluted                   5,542,533       5,342,533       5,342,533       4,948,753


      See accompanying notes to condensed consolidated financial statements


                                       4


                           EUROWEB INTERNATIONAL CORP.
            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (Unaudited)



                                                                     Common Stock               Additional
                                                               ----------------------------      Paid-in        Accumulated
                                                                  Shares           Amount        Capital          Deficit
                                                               ------------    ------------    ------------    ------------
                                                                                                   
Balance, January 1, 2004 (restated)                               4,665,332    $      4,665    $ 48,247,229    $(33,105,716)
                                                               ============    ============    ============    ============
Foreign currency translation gain                                        --              --              --              --
Reversal of unrealized gain on securities available for sale             --              --              --              --
Deemed distribution                                                      --                                      (2,142,556)
Compensation charge on share   
  options issued to consultants                                          --              --          94,212              --
Issuance of shares (Elender Rt. acquisition)                        677,201             677       2,458,108              --
Net loss                                                                 --              --              --        (734,454)
                                                               ------------    ------------    ------------    ------------
Balance, December 31, 2004                                        5,342,533    $      5,342    $ 50,799,549    $(35,982,726)
                                                               ============    ============    ============    ============
Foreign currency translation gain                                        --              --              --              --
Compensation charge on share                                             --              --         126,109              --
options issued to consultants
Cancellation of treasury stock                                           --              --      (1,115,412)             --
Net income                                                               --              --              --       1,789,137
                                                               ------------    ------------    ------------    ------------
Balance, September 30, 2005                                       5,342,533           5,342    $ 49,810,246    $(34,193,589)
                                                               ============    ============    ============    ============


                                                               Accumulated
                                                                   Other                          Total
                                                              Comprehensive       Treasury    Stockholders'
                                                              Income (Loss)        Stock          Equity
                                                               ------------    ------------   ------------
                                                                                     
Balance, January 1, 2004 (restated)                            $    (25,502)   $ (1,115,412)  $ 14,005,264
                                                               ============    ============   ============
Foreign currency translation gain                                   162,573              --        162,573
Reversal of unrealized gain on securities available for sale        (28,805)             --        (28,805)
Deemed distribution                                                      --              --     (2,142,556)
Compensation charge on share
  options issued to consultants                                          --              --         94,212
Issuance of shares (Elender Rt. acquisition)                             --              --      2,458,785
Net loss                                                                 --              --       (734,454)
                                                               ------------    ------------   ------------
Balance, December 31, 2004                                     $    108,266    $ (1,115,412)  $ 13,815,019
                                                               ============    ============   ============
Foreign currency translation gain                                     4,795              --          4,795
Compensation charge on share                                                                       126,109
options issued to consultants
Cancellation of treasury stock                                           --    $  1,115,412             --
Net income                                                               --              --      1,789,137
                                                               ------------    ------------   ------------
Balance, September 30, 2005                                    $    113,061    $         --   $ 15,735,060
                                                               ============    ============   ============


      See accompanying notes to condensed consolidated financial statements


                                       5


                           EUROWEB INTERNATIONAL CORP.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
--------------------------------------------------------------------------------



                                                                                      Nine Months Ended
                                                                                        September 30,
                                                                                        -------------
                                                                                   2005        2004 (restated)
                                                                                ------------    ------------
                                                                                          
           Net cash provided by (used in) operating activities                  $  2,624,140    $    644,436
                                                                                ------------    ------------

Cash flows from investing activities:
   Maturity of securities                                                                 --      11,464,000
   Collection of notes receivable                                                         --         152,140
   Acquisition of 51% of Euroweb Rt                                                       --      (2,142,000)
   Acquisition of 100% of Elender Rt., including transaction costs and net of             --      (6,459,219)
acquired
    Navigator - pre-acquisition cost                                                (271,808)             --
   Proceeds from sale of Euroweb Slovakia                                          2,700,000              --
   Purchase of property and equipment                                             (1,859,191)     (1,570,738)
                                                                                ------------    ------------
          Net cash provided by investing activities                                  569,001       1,444,183
                                                                                ------------    ------------

Cash flows from financing activities:

   Repayment of bank loans and overdraft                                            (217,500)       (425,338)
   Receipt of bank loans and overdraft                                                    --         213,963
   Repayment of notes payable                                                       (546,580)       (180,161)
   Repayment of Pantel note payable                                                 (245,000)             --
   Principal payments under capital lease obligations                               (228,411)       (425,235)
                                                                                ------------    ------------
          Net cash used in financing activities                                   (1,237,491)       (816,771)
                                                                                ------------    ------------

Effect of exchange rate changes on cash and cash equivalents                         (59,296)        (76,598)
                                                                                ------------    ------------

Net increase in cash and cash equivalents                                          1,896,354       1,195,250
Cash and cash equivalents, beginning of period                                     3,231,669       2,233,231
                                                                                ------------    ------------
Cash and cash equivalents, end of period                                        $  5,128,023    $  3,428,481
                                                                                ============    ============


     See accompanying notes to condensed consolidated financial statements.


                                       6


                           Euroweb International Corp.
         Notes to Unaudited Condensed Consolidated Financial Statements

1. Organization and Business

Euroweb   International  Corp.  ("Euroweb"  or  the  "Company")  is  a  Delaware
corporation,  which was  organized  on  November  9,  1992.  The  Company  was a
development stage company through December 31, 1993.

The Company operates in Hungary and Romania,  through its  subsidiaries  Euroweb
Hungary Rt. ("Euroweb Hungary") and Euroweb Romania S.A. ("Euroweb Romania"). On
December 16, 2004, the Company  disposed of Euroweb Czech Republic and no longer
has  operations  in the Czech  Republic.  On April 15,  2005,  the Company  sold
Euroweb  Slovakia a.s.  ("Euroweb  Slovakia")  for cash of $2,700,000  and, as a
result, has ceased operations in Slovakia.

The Company  provides  internet  access,  voice/  voice over  internet  protocol
("VOIP"), international/domestic leased line and additional value added services
primarily to business customers.

KPN Telecom owned approximately 43.54% of Euroweb's outstanding shares of common
stock  as  of   December   31,   2004,   and  a  majority   interest  in  Pantel
Telecommunication  Kft. ("Pantel").  On February 28, 2005, KPN NV sold its 75.1%
interest  in  the  Pantel  business  to  Hungarian  Telephone  and  Cable  Corp.
Therefore,  Pantel is no longer  considered a related party  effective  March 1,
2005.

In addition,  on January 28,  2005,  KPN Telecom  entered into a Stock  Purchase
Agreement whereby it sold to CORCYRA d.o.o. ("CORCYRA") 289,855 shares of common
stock of the Company for $1,000,000 on February 1, 2005 and KPN Telecom has also
agreed to sell its remaining  2,036,188  shares of the Company's common stock to
CORCYRA d.o.o. on or prior to April 30, 2006.

2. Basis of Presentation and Significant Accounting Policies

The interim unaudited condensed consolidated financial statements of Euroweb and
its consolidated subsidiaries included herein have been prepared pursuant to the
rules  and  regulations  of  the  Securities  and  Exchange  Commission  ("SEC")
regarding interim financial information and, accordingly,  do not include all of
the information and note disclosures required by accounting principles generally
accepted in the United States of America  ("U.S.  GAAP") for complete  financial
statements.  These unaudited interim consolidated financial statements should be
read in conjunction with the audited consolidated financial statements and notes
thereto for the year ended December 31, 2004,  appearing in the Annual Report on
Form 10-KSB of the Company for the year then-ended.

The accompanying  unaudited interim consolidated  financial statements have been
prepared in accordance with U.S. GAAP and reflect all adjustments  which are, in
the opinion of management,  necessary to a fair statement of the results for the
interim  periods  presented.  All such  adjustments  are of a  normal  recurring
nature.  The results of operations for the nine months ended  September 30, 2005
are not necessarily  indicative of the results that may be expected for the year
ending December 31, 2005.


                                       7


                           Euroweb International Corp.
         Notes to Unaudited Condensed Consolidated Financial Statements

In preparing the interim unaudited consolidated financial statements, management
is required to make estimates and assumptions  that affect the amounts  reported
in the financial statements. Actual results could differ from those estimates.

All   intercompany   balances  and   transactions   have  been   eliminated   in
consolidation.

Prior   periods  have  been   reclassified   to  conform  with  current   period
presentation.

On December  16, 2004,  the Company  sold all of its shares in its  wholly-owned
subsidiary,  Euroweb  Czech  Republic,  for cash of  $500,000.  As a part of the
transaction,  the Company  effectively forgave $400,000 of loans receivable from
Euroweb Czech Republic. On April 15, 2005, the Company sold Euroweb Slovakia for
cash of  $2,700,000.  The  Company  believes  that the  sales of  Euroweb  Czech
Republic  and  Euroweb   Slovakia  meet  the  criteria  for  presentation  as  a
discontinued   operations   under  the  provisions  of  Statement  of  Financial
Accounting Standard ("SFAS") No. 144, "Accounting for the Impairment or Disposal
of Long-Lived  Assets".  The three- and nine-month  periods ended  September 30,
2004 have been restated to reflect  Euroweb Czech Republic and Euroweb  Slovakia
as discontinued operations.

Stock-based compensation

Under the accounting  provisions of SFAS No. 123,  "Accounting  for  Stock-Based
Compensation"  ("SFAS  123"),  the  Company's  net income  (loss) and net income
(loss) per share for the three and nine months ended September 30, 2005 and 2004
would have been increased to the pro forma amounts indicated below:



Nine months ended                                     September 30,2005     September 30, 2004
                                                                               (restated)
                                                                       
Net income (loss):
    Net income (loss), as reported                      $   1,789,137        $    (815,342)
    Total stock-based employee compensation
      expense determined under fair value based
      method for all awards, net of tax effects              (687,144)            (889,682)
                                                        -------------        -------------
    Pro forma net loss                                      1,101,993           (1,705,024)
                                                        =============        =============

Basic and diluted income (loss) per share:
    As reported, basic                                  $        0.33        $       (0.16)
    Pro forma, basic                                             0.21                (0.34)

    As reported, diluted                                $        0.33        $       (0.16)
    Pro forma, diluted                                           0.21                (0.34)



                                       8


                           Euroweb International Corp.
         Notes to Unaudited Condensed Consolidated Financial Statements



Three months ended                                    September 30,2005     September 30, 2004
                                                                               (restated)
                                                                       
Net income (loss):
    Net income (loss), as reported                      $     336,750        $    (718,537)
    Total stock-based employee compensation
      expense determined under fair value based
      method for all awards, net of tax effects              (291,462)            (298,526)
                                                        -------------        -------------
    Pro forma net loss                                         45,288           (1,017,063)
                                                        =============        =============

Basic and diluted income (loss) per share:
    As reported, basic                                  $        0.06        $       (0.13)
    Pro forma, basic                                             0.01                (0.19)

    As reported, diluted                                $        0.06        $       (0.13)
    Pro forma, diluted                                           0.01                (0.19)



The  following  is a  reconciliation  from basic  earnings  per share to diluted
earnings per share for the three and nine month periods ended September 30, 2005
and 2004:



                                            3 months ended               9 months ended
                                       ------September 30,------    ------September 30,------
                                           2005         2004            2005          2004
                                       -----------   -----------    -----------   -----------
                                                                      
Net income (loss) attributable to
Common stockholders (A)                $   336,750   $  (718,537)   $ 1,789,137   $  (815,342)
                                       -----------   -----------    -----------   -----------

Determination of shares
Weighted average common shares
  outstanding - basic (B)                5,342,533     5,342,533      5,342,533     4,948,753
Assumed conversion of dilutive stock
  options and warrants                     200,000            --             --            --

Weighted average common shares
   Outstanding - diluted (C)             5,542,533     5,342,533      5,342,533     4,948,753
                                       -----------   -----------    -----------   -----------

Net income (loss) per common share
   Basic (A/B)                         $      0.06   $     (0.13)   $      0.33   $     (0.16)
   Diluted (A/C)                       $      0.06   $     (0.13)   $      0.33   $     (0.16)


For the three and nine month  periods  ended  September  30,  2005,  615,000 and
941,879  stock  options  and  warrants,  respectively,  were  excluded  from the
computation  of diluted  earnings per share since such options and warrants have
an exercise price in excess of the average market value of the Company's  common
stock during the periods.  For the three and nine month periods ended  September
30, 2004,  657,333 and 516,069 stock options were excluded from the  computation
of diluted net loss per common  share since such  options and  warrants  have an
exercise  price in excess of the average  market value of the  Company's  common
stock  during the periods.  248,122  shares of common stock held in escrow as of
September 30, 2005,  for issuance to a lender in the event of default on a loan,
were  excluded  from the  computation  of diluted  earnings  per share since the
Company was not in default as of September 30, 2005


                                       9


                           Euroweb International Corp.
         Notes to Unaudited Condensed Consolidated Financial Statements

3. Bank Loans, Overdrafts, and Notes Payable

On June 1, 2004,  Elender Rt. (which has since been merged with Euroweb  Hungary
Rt.) entered into a bank loan  agreement  with  Commerzbank  (Budapest)  Rt. The
agreement  consists of a loan facility of HUF 300 million  (approximately  $1.45
million) of which  $718,789 was  outstanding  at September 30, 2005. The loan is
being repaid in quarterly installments of HUF 14.5 million ($69,900), commencing
November 30, 2004. The interest rate is BUBOR (Budapest  Interbank Offered Rate)
+ 1.35%.

In addition,  the bank also  provided an  overdraft  facility of HUF 150 million
(approximately $723,000) to Elender Rt. The Company did not need to utilize this
facility  as at  September  30,  2005.  The  interest  rate is  BUBOR  (Budapest
Interbank Offered Rate) + 1%.

Notes  payable of  approximately  $175,554  as of  September  30, 2005 relate to
outstanding  liabilities to three previous  shareholders of Elender Rt.: Vitonas
Investments  Limited,  Certus Kft. and Rumed 2000 Kft. The outstanding amount is
payable in four equal  quarterly  installments  of HUF 36.4 million  ($175,554),
with the final payment due on December 31, 2005.

4. Pantel Loan Payable

During 2002 Pantel,  a related party prior to March 1, 2005,  provided a loan of
HUF 245 million  (approximately  $ 1.18  million  using the  September  30, 2005
exchange rate) to a subsidiary of the Company of which $708,228 was  outstanding
at September 30, 2005. The loan bears interest at a rate of 13% and is repayable
in five equal  installments  from December 2004  semi-annually  until the end of
2006.

5. Discontinued Operations and disposal of subsidiaries

Euroweb  Slovakia  (which was sold on April 15, 2005) and Euroweb Czech Republic
(which was sold on December 16, 2004) are considered discontinued operations for
financial  reporting  purposes and therefore all periods are restated to reflect
this.  For the three and nine months  ended  September  30,  2005 and 2004,  the
results of discontinued operations are as follows:



----------------------------------------- ------------------- ------------------ ------------------- -------------------
Country                                      Three months        Three months        Nine months         Nine months
                                           ended September     ended September    ended September     ended September
                                               30, 2005           30, 2004            30, 2005            30, 2004
----------------------------------------- ------------------- ------------------ ------------------- -------------------
                                                                                                   
Slovakia operations                                       --             $1,601             $32,270            $260,901
----------------------------------------- ------------------- ------------------ ------------------- -------------------
Slovakia --gain on disposal                               --                 --          $1,701,200                  --
----------------------------------------- ------------------- ------------------ ------------------- -------------------
Czech Republic operations                                 --             $3,653                  --            $(66,192)
----------------------------------------- ------------------- ------------------ ------------------- -------------------
Total                                                   $ --             $5,254          $1,733,470            $194,709
----------------------------------------- ------------------- ------------------ ------------------- -------------------


The Company did not realize any income tax benefit/losses in connection with the
disposal of the Slovakian and Czech operations.


                                       10


                           Euroweb International Corp.
         Notes to Unaudited Condensed Consolidated Financial Statements

6. Stock-based Compensation

On April 26, 2004, the Company  granted  125,000  options to its Chief Executive
Officer,  an aggregate of 195,000  options to five employees and an aggregate of
45,000 options to two  consultants of the Company.  The stock options granted to
the Chief  Executive  Officer vest at the rate of 31,250 on November 1, 2004 and
each October 1 of 2005,  2006 and 2007.  The stock options  granted to the other
employees  and  consultants  vest at the rate of 80,000 on  November 1, 2004 and
each October 1 of 2005, 2006. The exercise price of the options ($4.78) is equal
to the market price on the date the grants were made.

In accordance with  Accounting  Principles  Board No. 25,  "Accounting for Stock
Issued to Employees,"  ("APB 25") no  compensation  expense was recorded for the
options  granted to the Chief  Executive  Officer,  and the five  employees.  In
accordance with SFAS 123, the Company will recognize total compensation  charges
of  approximately  $162,000 for the grants made to the two  consultants  as such
consultants  do  not  qualify  as  employees.   Such  compensation  charges  are
recognized over the vesting period of three years.  Compensation expense for the
nine months ended  September 30, 2005 was $45,303 (2004:  $70,121),  and $15,101
(2004: $42,073) for the three months ended September 30, 2005.

On March 22, 2005, the Company granted an aggregate of 200,000 options to two of
the directors. The stock options granted to the directors on March 22, 2005 vest
at the rate of 50,000 on each  September 22 of 2005,  2006,  2007 and 2008.  The
exercise  price of the options  ($3.40) is equal to the market price on the date
the grants were made. In  accordance  with APB 25, no  compensation  charges was
accounted in respect of these grants.

On June 2, 2005,  the  Company  granted  100,000  options  to a director  of the
Company,  which  vest at the rate of 25,000 on each  December  2 of 2005,  2006,
2007, and 2008. No compensation charge was accounted in respect of this grant.

The  President  and a Director  of the  Company is eligible to receive an annual
compensation  of  $250,000  starting  from April 15,  2005,  which is payable in
Euroweb  shares of common  stock.  The number of shares to be paid is calculated
based on the average  closing price 10 days prior to each  employment  year. The
number of shares  for the year  ended  April 14,  2006 is  82,781.  Compensation
expense for the nine months period ended  September 30, 2005 was $114,582 (2004:
$0) and $83,333 (2004: $0) for the three months ended September 30, 2005.

On June 7, 2005, the Company granted 100,000 warrants to a consulting company as
compensation  for  investor  relations  services at exercise  prices as follows:
40,000 warrants at $3.50 per share,  20,000 warrants at $4.25 per share,  20,000
warrants at $4.75 per share and 20,000  warrants at $5 per shares.  The warrants
have a term of five years and tranches vest proportionately at a rate of a total
8,333 warrants per month over a one year period. The warrants are being expensed
over the  performance  period of one  year.  Compensation  expense  for the nine
months  period  ended  September  30, 2005 was $80,806 and $60,600 for the three
months ended September 30, 2005.


                                       11


                           Euroweb International Corp.
         Notes to Unaudited Condensed Consolidated Financial Statements

7. Related party transactions

The provision of international/domestic leased line, voice and VOIP services are
being  provided in conjunction  with Pantel,  an entity which was majority owned
and controlled by KPN Telecom B.V. (which also owned a majority  interest in the
Company until February 28, 2005). Intercompany sales were $1,768,358 for the two
months ended  February 28, 2005 compared to $5,533,618 for the nine months ended
September 30, 2004. The two periods are not comparable due to the fact that from
March 1, 2005,  Pantel is no longer related party with the Company,  because KPN
Telecom B.V.  disposed of its interest in Pantel.  Therefore,  transactions with
Pantel  from March 1, 2005 are not  classified  as  transactions  with a related
party.

During the nine months ended September 30, 2005 and fiscal 2004,  Pantel was the
most significant  trading partner of the Company with approximately 50% of total
revenues  of Euroweb  Romania  for the nine  months  ended  September  30,  2005
(translating into 22% of the consolidated revenues of the Company) being derived
from providing services to Pantel.

8. Commitments and Contingencies

(a) Employment Agreements

A  fixed-term  employment  agreement  with the Chief  Executive  Officer,  which
provided for aggregate annual  compensation of $96,000 through December 31, 2005
was  amended in 2004 and 2005.  The  amended  agreement  provides  for an annual
salary of $200,000 and a bonus of up to $150,000 in each of 2005, 2006, 2007 and
2008, as well as an annual car allowance of $30,000.

The Company has entered into a two-year employment  agreement with Moshe Schnapp
as President  and Director of the Company  starting  from April 15, 2005,  which
grants an annual  compensation  of  $250,000  to be paid in the form of  Euroweb
shares of common  stock.  The number of shares to be received by Mr.  Schnapp is
calculated  based on the average closing price 10 days prior to the commencement
of each  employment  year.  For the year ended April 14, 2006,  Mr. Schnapp will
receive 82,781 Euroweb shares of common stock.

(b) Lease agreements

The Company's subsidiaries have entered into various capital leases for vehicles
and  internet  equipment,  as  well  as  non-cancelable  agreements  for  office
premises.

(c) Indefeasible Right of Use

In 2002,  Euroweb  Romania  provided  an  Indefeasible  Right of Use ("IRU") for
transmission capacity on 12 pairs of fiber over a period of 20 years, commencing
in 2003.  For the duration of the agreement,  Euroweb  Romania is obliged to use
all reasonable  endeavours to ensure the cable system is maintained in efficient
working order and in accordance with industry standards.


                                       12


                           Euroweb International Corp.
         Notes to Unaudited Condensed Consolidated Financial Statements

(d) Legal Proceedings

There are no known  significant  legal  procedures  that have been filed and are
outstanding against the Company.

(e) Elender Rt. acquisition

On June 9, 2004, the Company  acquired all of the outstanding  shares of Elender
Rt. ("Elender"), an internet service provider in Hungary, for $6,500,000 in cash
and 677,201 of the  Company's  shares of common  stock.  Under the terms of this
agreement,  the Company has placed 248,122  unregistered  shares of newly issued
common stock (in the name of the  Company)  with an escrow agent as security for
approximately $1.50 million loans payable to former shareholders of Elender. The
shares will be returned to the Company  from escrow once the  outstanding  loans
have been fully repaid.  However, if there is a default on the outstanding loan,
then the  shares  will be  issued to the other  party  and the  Company  is then
obliged to register these shares.

Pursuant to section 1 of the  Registration  Rights  Agreement  signed on June 1,
2004 with the sellers of Elender,  if the shares of the  Company's  common stock
were not registered within 120 days of closing (closing was on June 9, 2004) for
reasons  attributable  to the  Company,  a penalty  of $2,000 per day is payable
until the shares are  registered.  The  Company  completed  registration  of the
shares of common stock issued in connection with the Elender  acquisition in May
2005. In June 2005, the sellers  renounced  their claims in connection  with the
late registration of shares, and therefore,  the $170,000 penalty accrued during
the year ended  December 31, 2004 was reversed and accounted for as other income
in the second quarter of 2005.

(f) Euroweb Hungary purchase guarantee

In February  2004,  the Company  purchased the remaining 51% of Euroweb  Hungary
from  Pantel.  The  consideration  paid by the  Company  for  the  51%  interest
consisted of EUR 1,650,000  ($2.1  million) in cash,  and a purchase  commitment
that Euroweb Hungary will purchase at least HUF 600 million  (approximately $3.0
million)  worth of services from Pantel in each of 2004-2006.  In the event that
Euroweb Hungary and its subsidiaries do not satisfy this commitment,  Pantel may
charge  a  penalty  equal to 25% of the  commitment  amount  less  any  services
purchased. Purchases in 2004 and year to date 2005 have exceeded this amount.

(g) Indemnities provided upon sale of subsidiaries

On April 13,  2004,  the Company sold its 100%  shareholding  in Neophone Rt. (a
non-operational  subsidiary) for approximately  $60,000.  Under the terms of the
sale the Company  has  indemnified  the buyer for any  unaccrued  costs,  fines,
penalties  and  lawsuits,  which relate to a period prior to the sale. No claims
have been made to date.

Under the terms of the sale agreement for Euroweb  Czech,  the buyer has a right
to make claims against the Company for up to $200,000 under  representation  and
warranties  provisions of the sale  agreement.  This provision is applicable for
claims made within 12 months of closing. No claims have been made to date.


                                       13


                           Euroweb International Corp.
         Notes to Unaudited Condensed Consolidated Financial Statements

On  April  15,  2005,  the  Company  sold  Euroweb  Slovakia.  According  to the
Securities  Purchase Contract (the  "Contract"),  the Company will indemnify the
buyer for all damages  incurred by the buyer as the result of seller's breach of
certain representations,  warranties or obligations as set in the Contract up to
an  aggregate  amount of  $540,000.  The buyer shall not be entitled to make any
claim under this Article 9 of the Contract  after the fourth  anniversary of the
date of the Contract.  No claims have been made to date. The Company has accrued
$35,000 as the  estimated  fair value of any such  representation,  warranty  or
obligation  in favor of the  purchaser,  issued  pursuant to the share  purchase
agreement.


9. Geographic information

The following table summarizes financial  information from continuing operations
by  geographic  area for the three and nine months ended  September 30, 2005 and
2004 after  intercompany  eliminations  and  allocation of certain  salaries and
revenues/direct  cost to the respective countries to more accurately reflect the
utilization of resources:


Geographic information for nine months ended 2005



                                                   Romania          Hungary         Corporate        Total
                                                                                    
Third party revenues                            $ 10,895,290    $ 19,727,196              --    $ 30,622,486
Pantel related revenues (January - February)       1,565,314         203,044              --       1,768,358
Total revenues                                    12,460,604      19,930,240              --      32,390,844

Depreciation                                         599,927       1,279,570              --       1,879,497
Intangible amortization
(customer contract)                                       --         769,833              --         769,833

Interest income                                        6,216          17,655              --          23,871
Interest expense                                     (34,786)       (226,795)             --        (261,581)
Net interest expense                                 (28,570)       (209,140)             --        (237,710)

Income tax                                           137,016              --              --         137,016
Income (loss) from continuing operations           1,070,351         131,430      (1,146,114)         55,667

Long-lived assets                                  3,237,148       3,405,277              --       6,642,425
Intangible - customer contracts                           --       1,283,455              --       1,283,455
Other assets                                              --         383,074              --         383,074
Capital expenditures                               1,324,596         487,511              --       1,812,107
Capital expenditures - discontinued operation             --              --              --          47,084
Goodwill                                             566,000       5,240,181              --       5,806,181


Pantel  related  revenue  for the  nine  months  ended  September  30,  2005 was
$6,269,550 in Romania and $949,620 in Hungary.


                                       14


                           Euroweb International Corp.
         Notes to Unaudited Condensed Consolidated Financial Statements

Geographic information for nine months ended 2004



                                                   Romania         Hungary        Corporate         Total
                                                                                    
Third party revenues                            $  3,679,568    $ 12,313,811              --    $ 15,993,379
Pantel related revenues                            5,412,600         121,018              --       5,533,618
Total revenues                                     9,092,168      12,434,829              --      21,526,997

Depreciation                                         412,075         655,058           2,048       1,069,181
Intangible amortization
(customer contract)                                       --         245,744              --         245,744

Interest income                                       21,063          71,639          48,993         141,695
Interest expense                                     (22,101)       (260,942)             --        (283,043)
Net interest (expense)
income                                                (1,038)       (189,303)         48,993        (141,348)

Income tax                                            50,455              --              --          50,455
Income (loss) from continuing operations             197,180        (102,805)     (1,104,426)     (1,010,051)

Long-lived assets                                  2,207,133       5,012,068              --       7,219,201
Intangible - customer contracts                           --       2,167,015              --       2,167,015
Capital expenditures                               1,064,986         451,237              --       1,516,223
Capital expenditures - discontinued operation             --              --              --          54,515
Goodwill                                             566,000       5,377,821              --       5,943,821


Geographic information for three months ended September 30, 2005



                                              Romania         Hungary           Corporate      Total
                                                                               
Third party revenues                       $  3,833,021    $  6,531,327              --    $ 10,364,348
Pantel related revenues                              --              --              --              --
Total revenues                                3,833,021       6,531,327              --      10,364,348

Depreciation                                    213,039         420,778              --         633,817
Intangible amortization
(customer contract)                                  --         256,611              --         256,611

Interest income                                   1,246           7,167              --           8,413
Interest expense                                (11,192)        (56,085)             --         (67,277)
Net interest expense                             (9,946)        (48,918)             --         (58,864)

Income tax                                        8,678              --              --           8,678
Income (loss) from continuing operations        417,975         360,083        (441,308)        336,750


Geographic information for three months ended September 30, 2004



                                              Romania        Hungary        Corporate      Total
                                                                            
Third party revenues                       $ 1,296,879    $ 6,205,265             --    $ 7,502,144
Pantel related revenues                      1,996,600         99,590             --      2,096,190
Total revenues                               3,293,479      6,304,855             --      9,598,334

Depreciation                                   197,030        364,401             --        561,431
Intangible amortization
(customer contract)                                 --        201,100             --        201,100

Interest income                                  2,665         20,632          1,029         24,326
Interest expense                                (7,116)      (105,474)            --       (112,590)
Net interest (expense)
income                                          (4,451)       (84,842)         1,029        (88,264)

Income tax                                       4,436             --             --          4,436
Income (loss) from continuing operations        20,208       (340,791)      (403,208)      (723,791)



                                       15

                           Euroweb International Corp.
         Notes to Unaudited Condensed Consolidated Financial Statements

10. Subsequent events

On July 21,  2005,  Euroweb  and its  wholly-owned  subsidiary  Euroweb  Hungary
entered into a Sale and  Purchase  Agreement  (the  "Agreement")  with  Marivaux
Investments  Limited  ("Marivaux")  and  Graeton  Holdings  Limited  ("Graeton")
(collectively,   Marivaux  and  Graeton  are  hereinafter  referred  to  as  the
"Sellers"),  which are both registered under the laws of the Cyprus. Pursuant to
the Agreement, the Company has agreed to acquire and, the Sellers have agreed to
sell, 100% of the Seller's interest in Navigator  Informatika Rt. ("Navigator"),
a Hungarian company. The closing of the transaction occurred on October 7, 2005.
In consideration for Marivaux's interest in Navigator, the Company paid Marivaux
$8,500,000  of which  $150,000  was  paid  upon  signing  of the  Agreement  and
$8,350,000  was paid upon  closing.  In  addition,  at closing,  Euroweb  issued
Graeton 441,566 shares of common stock of Euroweb.  Euroweb  Hungary  obtained a
$6,000,000  long  term bank loan from  Commerzbank  Hungary  ("Commerzbank")  to
finance the cash part of purchase  price,  while  $2,500,000  was financed  from
existing cash on hand.  The interest  rate in connection  with the loan is BUBOR
plus 2.5%.  Euroweb Hungary is required to make quarterly  scheduled payments in
connection  with the loan  commencing  March 31, 2006 through June 30, 2010. The
first two payments will be approximately $166,000,  while the remaining payments
will be approximately $354,000.

As security for providing the funds, Euroweb Hungary granted a security interest
in all of its assets,  the  assignment  of its revenue,  the  assignment  of all
future dividends payable by Navigator and the pledge of all of the securities of
Euroweb  Hungary  and  Navigator  held by  Euroweb.  Further,  in the event that
Euroweb Hungary fails to satisfy its  obligations  under the loan agreement with
Commerzbank,  Commerzbank  holds an option to acquire all of the  securities  of
Navigator.

Euroweb  has  entered  into a  registration  rights  agreement,  relating to the
Navigator  share  issue,  dated  July  21,  2005  whereby  it  agreed  to file a
registration  statement  registering  the Shares within 75 days from the closing
and have such registration statement declared effective within 150 days from the
filing  thereof.  In the event that  Euroweb  fails to meet its  obligations  to
register the shares it may be required to pay a penalty equal to 1% of the value
of the shares on a monthly basis.


                                       16


ITEM 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

      Operations

Overview

Euroweb International  Corporation owns and operates Internet Service Providers,
or ISPs, in Hungary and Romania  through its  subsidiaries,  Euroweb Hungary Rt.
("Euroweb  Hungary") and Euroweb Romania S.A. ("Euroweb  Romania").  On December
16, 2004,  the Company sold Euroweb Czech  Republic and no longer has operations
in the Czech  Republic.  On April 15,  2005,  the Company  sold its  interest in
Euroweb Slovakia a.s. ("Euroweb  Slovakia").  Euroweb Czech Republic and Euroweb
Slovakia  is  considered  a  discontinued   operation  for  financial  reporting
purposes.

The Company operates in one industry segment,  providing Internet access, voice,
international/domestic   leased  lines  and  additional   value  added  services
primarily to business customers.

Our revenues come from the following sources:

      o     ISP (Internet access, content, web, hosting and related services );

      o     International  / domestic  leased line and Internet  Protocol ("IP")
            data services;

      o     Voice / Voice over IP ("VOIP") services; and

      o     Facilities  (sale,  rental and  maintenance of optical fiber between
            the Hungarian border and the Romanian City of Timisoara).

For  international  / domestic leased line and IP data services and voice / VOIP
services  in  Romania,  our  main  customer  in 2005 and  2004  was  Pantel  Rt.
("Pantel").  Pantel  was a related  party  until  February  28,  2005,  when the
completion of the sale of KPN NV's 75.1% interest in the Pantel  business to the
Hungarian  Telephone and Cable Corp. was announced.  As a result, as of March 1,
2005,  Pantel  is no longer a  related  party.  Pantel  still  remains  the most
significant customer and supplier of the Company.

We generally  have not built out optical  fibers for our ISP  business,  instead
entering  into a number of  agreements  with  infrastructure  owners and telecom
companies to buy internet and telecom services and resell them to our customers.
Such a structure enables our company to avoid significant  capital  expenditures
on network development. However, without our own infrastructure,  our ability to
compete  with other ISPs and telecom  companies  is limited due to access  costs
charged by third party  telecommunication  companies.  In order to mitigate  the
impact of newly introduced cheaper internet access  technologies (e.g. ADSL) and
competition, we took several steps, including the following:

      o     Built strategic partnerships with telecom companies;

      o     Increased  value  added  services  and  offered  more  comprehensive
            customer solutions;

      o     Introduced voice and international / domestic leased lines services;

      o     Building  of own  optical  fiber  network in  Romania;  and o Making
            acquisitions  to  ensure  economies  of  scale  and  realization  of
            synergies.

This strategy has resulted in increased  revenues,  increased  profitability and
increased cash generating ability of the Company since 2003.


                                       17


Relationship with Pantel

Our  largest  customer  and  supplier  since  early  2001  has  been  Pantel,  a
Hungary-based  alternative  telecommunications  provider. Pantel operates within
the region and has become a  significant  trading  partner for  Euroweb  Romania
through  the  provision  of a  direct  fiber  cable  connection,  which  enables
companies  to  transmit  data to a variety  of  destinations  by  utilizing  the
international  connections of Pantel.  As a result,  Euroweb  Romania became the
preferred,  but not  exclusive,  partner of Pantel for  services in Romania.  In
addition to this,  Euroweb Hungary  utilizes  significant  telecom services from
Pantel.  Due to the fact that a significant  portion of our revenue is generated
by  international / domestic leased line and Voice / VOIP services,  a number of
our  representatives  have moved to the  premises  of Pantel in order to improve
co-operation on international projects.

On February 28, 2005,  KPN Telecom (the majority owner of Pantel and our largest
shareholder),  completed the sale of its entire  interest in Pantel.  Therefore,
Euroweb  is no  longer  related  party  with  Pantel  from  March 1,  2005.  Our
statements of  operations  present  amounts  relating to Pantel in related party
revenues and cost of revenues for the period  January 1 to February 28, 2005 and
from January 1, 2004 to September 30, 2004.

Both Euroweb  Hungary and Euroweb  Romania engage in the following  transactions
with Pantel:

(a) We purchase the following services from Pantel:

- Internet and related services;

- National and international leased and telephone lines;

- VOIP / Voice services; and

- Consulting services

The total amount of these services  purchased from Pantel was $6,161,959  during
the nine months ended  September 30, 2005 (nine months ended September 30, 2004:
$4,454,898).

In  addition,  Pantel  charged  interest  of  $89,510 in the nine  months  ended
September 30, 2005 (nine months ended September 30, 2004:  $141,980) relating to
the loan provided to Euroweb Hungary by Pantel.

(b) We mainly  sell  services to Pantel in areas  where we have  operations  and
Pantel does not, as follows:

- International leased lines and local telephone lines;

- International/national data and VOIP services for Pantel;

- Internet and related services; and

- Consulting services

The total value of these  services sold was  $7,219,170 in the nine months ended
September 30, 2005 (nine months ended September 30, 2004: $5,533,618).

Direct sales to Pantel were 22% of total consolidated revenue in the nine months
ended  September 30, 2005 (nine months ended September 30, 2004:  26%).  Euroweb
Romania is additionally dependent on Pantel for revenue because some third party
international/domestic  line sales involve  Pantel as the  subcontractor/service
provider and some third party customers were introduced to the Company by Pantel
(i.e. their  relationship  with Pantel is stronger than their  relationship with
Euroweb Romania).


                                       18


Direct sales to Pantel and Pantel-related  sales represent  approximately 30% of
total consolidated  revenues of the Company and approximately 78% of total sales
of Euroweb  Romania.  There is no such sales  dependency  in the case of Euroweb
Hungary.

With respect to pricing,  agreements are made at market prices or a split of the
margin  based on the  financial  investment  into the  specific  services by the
Company and Pantel. The Company always considers  alternative suppliers for each
individual project.

We cannot  predict  whether the  disposal by KPN  Telecom of its  investment  in
Pantel will have an influence on the business  relationship  between the Company
and Pantel.  We have not experienced any  deterioration in our relationship with
Pantel in the nine months ended 2005.

Disposals

On April 15, 2005,  the Company  completed  the sale of 100% of the  outstanding
stock  of its  subsidiary  in  Slovakia  for  $2,700,000.  As a  result  of this
transaction,  the Company recorded a gain of $1,701,200 in the second quarter of
2005.

In addition to the decreasing  profitability  of the Slovakian  subsidiary,  the
strategic role of the Slovakian  operations in the Company's  regional  approach
became less significant over the last two years.  This was primarily  because of
the smaller market share presented by our Slovakian  operations  compared to the
other  countries  in which the  Company  operates.  The  Company  continues  the
realization  of its  strategy  to focus  its  efforts  in  countries  where  the
Company's market presence is stronger.  The sale of Euroweb Slovakia resulted in
a cash inflow of $2,700,000 in the nine months ended September 30, 2005.

      Critical Accounting Policies

     The  Company's  discussion  and  analysis of its  financial  condition  and
results of operations are based upon its consolidated  financial statements that
have been prepared in accordance with generally accepted  accounting  principles
in  the  United  States  of  America  ("US  GAAP").  This  preparation  requires
management to make estimates and assumptions that affect the reported amounts of
assets,  liabilities,  revenues and expenses,  and the  disclosure of contingent
assets and liabilities.  US GAAP provides the framework from which to make these
estimates,  assumption and disclosures.  The Company chooses accounting policies
within US GAAP that management believes are appropriate to accurately and fairly
report the Company's  operating  results and financial  position in a consistent
manner.  Management  regularly  assesses  these policies in light of current and
forecasted economic conditions.  Accounting policies that management believes to
be critical to  understanding  the results of  operations  and the effect of the
more  significant  judgments  and  estimates  used  in  the  preparation  of the
consolidated  financial statements are the same as those described in the Annual
Report on Form 10-KSB of the Company for the year ended December 31, 2004.

      Results of Operations

      Nine Months Period Ended September 30, 2005 Compared to Nine Months Period
Ended September 30, 2004

Due to the  acquisition  of  Elender  Rt. on June 9,  2004,  the profit and loss
statements  for the  nine  months  ended  September  30,  2005  and 2004 are not
comparable from an organic growth point of view.


                                       19


On December  16, 2004,  the Company  sold all of its shares in its  wholly-owned
subsidiary,  Euroweb  Czech  Republic,  for cash of  $500,000.  As a part of the
transaction,  the Company  effectively forgave $400,000 of loans receivable from
Euroweb Czech Republic. On April 15, 2005, the Company sold Euroweb Slovakia for
$2,700,000.  The Company  believes that the sale of Euroweb  Czech  Republic and
Euroweb Slovakia meet the criteria for presentation as a discontinued  operation
under the provisions of Statement of Financial  Accounting Standard ("SFAS") No.
144,  "Accounting  for the  Impairment  or Disposal of Long-Lived  Assets".  The
nine-month  period ended September 30, 2004 has been restated to reflect Euroweb
Czech Republic and Euroweb Slovakia as discontinued operations.

Nine months ended September 30,                   2005          2004 (restated)
                                              ------------      ---------------
      Total Revenues                          $ 32,390,844      $    21,526,997

We experienced  50% revenue  growth,  or an increase of $10,863,847 for the nine
months ended  September 30, 2005 compared to the nine months ended September 30,
2004. The increase was mainly due to the  acquisition of Elender Rt.,  increases
in  voice/VOIP  and  international  leased  line  services  and  partly  to  the
depreciation of the US dollar against the Romanian lei and the Hungarian  forint
in the nine months ended  September  30, 2005  compared to the nine months ended
September  30,  2004.  Depreciation  of the US  dollar  increases  our  reported
revenues because our sales are non-US dollar denominated.

The following table  summarizes the origin of changes in revenue compared to the
previous year:



------------------------------------ --------------------- --------------------- --------------
Revenue / services                      Q1-Q3 of 2005         Q1-Q3 of 2004        % change
                                                                (restated)
------------------------------------ --------------------- --------------------- --------------
                                                                             
ISP activity                              $19,371,610           $11,670,806           +66%
------------------------------------ --------------------- --------------------- --------------
International   /  domestic
leased line *(a)                          $ 5,963,186           $ 4,349,618           +37%
------------------------------------ --------------------- --------------------- --------------
Voice / VOIP                              $ 7,016,115           $ 5,413,537           +30%
------------------------------------ --------------------- --------------------- --------------
Facilities (a)                            $    39,933           $    93,036           -58%
------------------------------------ --------------------- --------------------- --------------
Total                                     $32,390,844           $21,526,997           +51%
------------------------------------ --------------------- --------------------- --------------


* - primarily Pantel or Pantel-related sales,

(a) substantially all generated by our Romanian subsidiary

ISP revenue analysis

$6.60 million, or 86%, of the increase in ISP revenue relates to Hungary, mainly
due to the acquisition of Elender Rt. The remaining growth of ISP revenue ($1.14
million) can be attributed to organic growth in Romania compared to the previous
year. In Hungary,  due to economic  conditions and pricing  issues,  customers -
having  access type  (internet  connection)  services - generally  transfer from
higher  monthly fee  subscriptions  (such as leased  line) to lower  monthly fee
subscriptions (e.g. ADSL).  Although the number of total customers has increased
compared  to previous  periods,  mainly due to the new ADSL  customers,  organic
revenue  growth  possibilities  in this segment are limited due to the change in
service types  utilized by the customers.  In Romania,  organic growth is due to
the demand for broadband internet connections by corporate customers. The number
of  corporate  customers  almost  doubled  (compared  to the prior year) and now
exceeds 550.


                                       20


International/national Leased Line revenue analysis

Revenue from international/national  leased lines and IP data services generated
by  Euroweb  Romania  has  increased  compared  to last  year.  This  service is
generally provided to a small number of ISPs, telecommunication firms (including
Pantel), and other international  companies. Due to developments in the Romanian
market in the last few years,  these wholesale prices have dropped.  The Company
was able to  approximately  double the  international  leased line capacity sold
compared to 2004, in addition to winning a new government-related contract. This
increase in volume largely offset the negative price trends in the international
leased line segment.

Voice / VOIP Service revenue analysis



--------------------------------------------- -------------------- --------------------- ---------------
VOIP services revenue                            Q1-Q3 of 2005        Q1-Q3 of 2004         % change
                                                                        (restated)
--------------------------------------------- -------------------- --------------------- ---------------
                                                                                     
Retail voice origination (Ro+Hu)                  $  372,039            $  501,290            -26%
--------------------------------------------- -------------------- --------------------- ---------------
Wholesale voice termination (Ro)                  $4,000,000            $3,463,000            +16%
--------------------------------------------- -------------------- --------------------- ---------------
Neophone prepaid phonecard (Hu)                   $1,216,856            $1,449,247            -16%
--------------------------------------------- -------------------- --------------------- ---------------
Neophone Deal (Hu)                                $1,280,227                     0             N/A
--------------------------------------------- -------------------- --------------------- ---------------
Neophone-X (Hu)                                   $  146,993                     0             N/A
--------------------------------------------- -------------------- --------------------- ---------------
Total                                             $7,016,115            $5,413,537            +30%
--------------------------------------------- -------------------- --------------------- ---------------


Hu- Hungarian related,   Ro- Romanian related

Retail voice  origination is provided to corporate  customers over leased lines.
Such  services  enable  customers to reduce their costs of  international,  long
distance  and local calls that they  initiate.  62% of revenue is  generated  in
Romania,  while the remaining  38% is generated in Hungary.  Revenue from retail
voice  origination  has decreased from $356,217 in the nine months ended 2004 to
$141,013 in the nine months ended September 30, 2005 in Hungary.  From 2005, the
Hungarian subsidiary  introduced a new voice product,  Neophone Deal, which is a
more  convenient  and cheaper way for  companies  to reduce  their voice  costs.
Consequently,  the Company  anticipates  decreases in retail  voice  origination
revenue in Hungary as customers migrate to this new product.  In Romania,  voice
revenue  increased by $85,953 to $231,026 mainly due to increased  volume in the
nine months ended September 30, 2005 compared to the  corresponding  nine months
in  the  previous  year.  Retail  voice   origination   services  are  primarily
denominated  in local  currency.  In US dollar  terms,  the overall  decrease in
revenue is contributed to by the 14%  depreciation  of the US dollar against the
Romanian  lei and the 5%  depreciation  of the US dollar  against the  Hungarian
forint in the nine months ended  September  30, 2005 compared to the nine months
ended September 30, 2004.

Wholesale voice  termination  represents  voice minutes received from Pantel and
forwarded to Romanian  telecommunication  companies.  Revenue from such services
has  increased by 16% mainly due to increased  volume.  The service bears a high
risk that the voice traffic may be completely eliminated if a strategic decision
is made by Pantel to use  alternative  providers or customers  can obtain better
termination  rates from  competitors.  Such volume  reductions  may occur at any
time,  although  the  impact on the  results  of  operations  will be limited as
margins are low.  Approximately  3% of the  increase  can be  attributed  to the
weakening  of the US dollar  from 2004 to 2005  against  the euro,  which is the
denominated currency of this service.

Neophone prepaid phonecards enable private  individuals to make cheaper domestic
or international calls compared to the rates of the incumbent telecom operators.
The cards were first  introduced  in  Hungary  four years ago.  During the first
three years, the number of users and voice traffic has  continuously  increased.
Since  late  2003,   competitors   have  introduced   aggressively  low  prices;
consequently,  the Company also had to reduce its prices,  which has reduced the
revenue generated by this product. For the nine months ended September 30, 2005,
revenues  from phone card  traffic  decreased  by 16%  compared to the  previous
period, while the voice traffic minutes has increased over 6%.


                                       21


Neophone Deal is offered to small- and  medium-sized  companies and is a carrier
pre-selection  product.  The  subscriber  keeps its  existing  phone  number and
remains the client of the previous  telecommunication  company; however outgoing
calls  initiated  by the  customer  will go through the Euroweb  voice  network,
leaving out the previous  telecommunication  company.  The  outgoing  traffic is
invoiced by Euroweb  Hungary with discount  prices  compared to the rates of the
incumbent telecom operator.

Neophone-X,  which was first  introduced  in  February  2005,  provides  a voice
service by making use of users' personal  computers and the Internet  instead of
the  traditional  phone network.  During  computer  based phone calls,  voice is
transmitted in digital data packages and  transformed  into human voice again at
the receiving  party.  Revenue  generated in the nine months ended September 30,
2005 was $146,993.

Facilities revenue analysis

Revenues  from  facilities  are  earned  from the lease and sale of fiber  optic
cables owned by Euroweb Romania and related  maintenance  fees. In 2004, a fiber
optic sale transaction  resulted in revenues of approximately  $34,000.  Revenue
from an indefeasible  right of use ("IRU") sold by the Company for  transmission
capacity  on 12 pairs of fiber  over a period  of 20  years,  was  approximately
$23,000 in 2004, and the balance of facilities revenue was maintenance  revenue.
In 2005, facilities revenue included only revenue from the 20 year IRU contract.

Geographic revenue analysis

The  following  table  summarizes  the main  changes in revenue  compared to the
previous year with respect to the geographical source of revenue:

----------------------- --------------------- --------------------- ------------
Revenue/country            Q1-Q3 of 2005         Q1-Q3 of 2004       Change in
                                                   (restated)            %
----------------------- --------------------- --------------------- ------------
Hungary                      $19,930,240           $12,434,829         +60%
----------------------- --------------------- --------------------- ------------
Romania                      $12,460,604           $ 9,092,168         +37%
----------------------- --------------------- --------------------- ------------
Total                        $32,390,844           $21,526,997         +51%
----------------------- --------------------- --------------------- ------------

Elender  Rt. was  consolidated  from June 9, 2004.  Revenues  for the  Company's
Hungarian  operations  have  increased by 60% or  $7,495,411  mainly due to this
acquisition.  Approximately  4% of the  increase in Hungary is the result of the
strengthening  of the Hungarian  forint against the US dollar when comparing the
nine months ended September 30, 2005 and 2004.

The Romanian operations have experienced a 37%, or $3,368,436,  revenue increase
compared  to the  prior  period.  Approximately  28% or  $0.50  million  of this
increase  can  be  attributed  to the  increased  wholesale  voice  termination,
approximately   $1.60   million   can  be   attributed   to  the   increase   of
domestic/international  leased lines  revenue,  while the remaining  increase is
mainly in  connection  with the organic  growth from ISP  activity  and currency
appreciation of the Romanian lei against the US dollar.


                                       22


Cost of revenues (excluding depreciation and amortization)

The following table summarizes the cost of revenues (excluding  depreciation and
amortization) for the nine months ended September 30, 2005 and 2004:


Nine months ended September 30,                   2005          2004 (restated)
                                              ------------      ---------------
      Total cost of revenues                  $ 21,842,070      $    14,558,505


Cost of revenues  (excluding  depreciation  and  amortization)  comprise  mostly
telecommunication  expenses, which generally increase in line with the volume of
services sold to customers.  The increase of 50% is fairly  consistent  with the
overall increase of revenues of 50%.

Compensation and related costs

The following table  summarizes the  compensation and related costs for the nine
months ended September 30, 2005 and 2004:

Nine months ended September 30,                   2005          2004 (restated)
                                              ------------      ---------------
      Compensation and related costs          $  2,514,864      $     2,137,468


Overall compensation and related costs increased by 18%, or $377,396, mainly due
to  the  acquisition  of  Elender  Rt.  in  June  2004  and  the  effect  of the
appreciation of Hungarian and Romanian  currencies  against the US dollar during
the periods being compared.

Consulting, directors and professional fees

The following table summarizes the consulting,  directors and professional  fees
for the nine months ended September 30, 2005 and 2004:


Nine months ended September 30,                   2005          2004 (restated)
                                              ------------      ---------------
      Consulting, directors and
        professional fees                     $  2,670,795      $     2,012,980

The consulting,  directors and  professional  fees increased by 32% or $657,815,
which can mainly be  attributed to the  acquisition  of Elender Rt. in June 2004
and to  increased  legal and  consultancy  costs  associated  with growth of the
business.

Collection of written-off receivable

The following table summarizes the collection of written-off receivables for the
nine months ended September 30, 2005 and 2004:

Nine months ended September 30,                   2005          2004 (restated)
                                              ------------      ---------------
      Collection of written-off receivable    $    265,630      $             0

In March 2005,  the Company  received a check of $265,630  from  Teleglobe  Inc.
which went  bankrupt  in 2003.  The  Company  had  previously  written  off this
uncollected receivable.

Other selling, general and administrative expenses


                                       23


The following  table  summarizes our other selling,  general and  administrative
expenses for the nine months ended September 30, 2005 and 2004:

Nine months ended September 30,                   2005          2004 (restated)
                                              ------------      ---------------
      Other selling, general and 
        administrative expenses               $  2,719,022      $     2,350,118

Overall other  selling,  general and  administrative  expenses  increased by 15%
($368,904),  as a result of higher levels of business in general,  mainly due to
the  acquisition  of  Elender  Rt. in June 2004.  Increases  were  primarily  in
telecommunication and local taxes in Hungary and Romania ($189,253) and bad debt
provisions ($107,307). The appreciation of the Hungarian and Romanian currencies
against the US dollar in the nine months ended  September  30, 2005  compared to
the nine months ended September 30, 2004 also had an effect.

Depreciation and amortization

The following table  summarizes our  depreciation  and amortization for the nine
months ended September 30, 2005 and 2004:

Nine months ended September 30,                   2005          2004 (restated)
                                              ------------      ---------------
      Depreciation                            $  1,879,497      $     1,069,181
      Amortization of intangibles             $    769,833      $       245,744
                                              ------------      ---------------
            Total depreciation and 
              amortization                    $  2,649,330      $     1,314,925
                                              ============      ===============

Depreciation  increased by $810,316 in the nine months ended  September 30, 2005
compared to the same period in 2004,  due to the  Company's  increased  tangible
assets following the acquisition and consolidation of Elender Rt.

Amortization  of intangibles of $769,833 in the nine months ended  September 30,
2005 (2004: $245,744) relates to certain customer contracts of Elender Rt, which
were recognized as intangible assets upon acquisition.

Net interest expense

The  following  table  summarizes  our net interest  expense for the nine months
ended September 30, 2005 and 2004:

Nine months ended September 30,                   2005          2004 (restated)
                                              ------------      ---------------
      Interest income                         $     23,871      $       141,695
      Interest expense                        $   (261,581)     $      (283,043)
                                              ------------      ---------------
            Net interest expense              $   (237,710)     $      (141,348)
                                              ============      ===============

The  increase  in  net  interest  expense  is due to the  fact  that  (i)  fewer
interest-generating  funds were available in this period than in the same period
of  the  previous  year  because  funds  were   disbursed  in  connection   with
acquisitions,  (ii) interest rates on these  investments have decreased over the
periods in question,  (iii) securities matured on February 15, 2004, without new
investments  being made due to cash being needed to fund  acquisitions  in 2004,
and (iv) consolidation of Elender Rt. has increased interest expense due to bank
loans and notes payable outstanding.


                                       24


Other income

The  following  table  summarizes  our other  income for the nine  months  ended
September 30, 2005 and 2004:

Nine months ended September 30,                   2005          2004 (restated)
                                              ------------      ---------------
      Other income                            $    170,000                   --

In June 2005,  the sellers of Elender Rt.  renounced  their claims in connection
with the late  registration  of shares,  and  therefore,  the  $170,000  penalty
accrued  during the year ended  December 31, 2004 was reversed and accounted for
as other income in the second quarter of 2005.

Income tax expense

The  following  table  summarizes  our  provision  for income taxes for the nine
months ended September 30, 2005 and 2004:

Nine months ended September 30,                   2005          2004 (restated)
                                              ------------      ---------------
      Income tax expense                      $   (137,016)     $       (50,455)

Income tax expense increased due to the profits generated in Romania,  which are
not offset by losses carried forward from previous years.

      Liquidity and Capital Resources

In  recent  years,  we  maintained  approximately  $11  million  invested  in US
government securities,  which matured in February 2004. The main source of these
funds was capital injections by KPN in previous years.

As of September 30, 2005, our cash and cash  equivalents  were $4.9 million,  an
increase of  approximately  $1.9 million  from the end of fiscal year 2004.  The
change is mainly due to the sale of Euroweb Slovakia.

Cash flow from  operations  in the nine  months  ended  September  30,  2005 was
$2,624,140,  an increase of $1,979,704  from the nine months ended September 30,
2004  (restated).  The change is due to the  increased  cash  generation  of the
Romanian subsidiary and the acquisition of Elender Rt.

Investing  activities  increased  the cash at hand of the Company by $569,001 in
the nine months  ended  September  30, 2005 due to sale of Euroweb  Slovakia for
$2,700,000,  which was  partly  offset by  capital  expenditures  in  Romania in
connection with certain fiber network expansion and backbone equipment.

Cash used for  financing  activities  was  $1,237,491  in the nine months  ended
September 30, 2005.  $1,009,080  was used to make payments on bank loans, a loan
due to Pantel and notes payable,  while $228,411 was used to repay capital lease
obligations.  At September  30, 2005,  the Company had an  unutilized  overdraft
facility for $730,000.

Although we cannot  provide  guarantees,  management  believes  that the synergy
effects and potential  business  opportunities of the merged Hungarian  entities
can  contribute to improving our cash  generating  ability  during 2005 compared
with  2004,  which  can  already  be seen by the  increase  in  cash  flow  from
operations. We intend to repay loans of our Company with cash from operations.


                                       25


The Company may use its excess  cash at hand,  additional  bank loans or capital
raisings  to finance  any future  acquisitions  its makes in Central and Eastern
Europe.  The  Company  may  also  consider  the  sale  of  strategic  assets  or
subsidiaries.  Due to our  strategy of  aggressive  acquisition,  we may seek to
incur additional material debts.

We signed a share purchase  agreement on July 21, 2005 to acquire  Navigator Rt.
Closing occurred on October 7, 2005.  Based on the terms of that agreement,  the
financial position of the Company will change significantly.  The short and long
term liquidity position of the Company will be affected as follows:  (1) cash at
hand will be reduced by  $2,500,000  (2) long term bank loans will  increase  by
$6,000,000  (3) the  estimated  net  working  capital  of  Navigator  group will
increase the  liabilities of the Company by more than  $1,500,000.  In addition,
the Company expects  transaction  costs in excess of $250,000 in connection with
the acquisition  related to advisory and consulting  fees,  financial  reporting
requirements and registration costs.

      Inflation and Foreign Currency

We maintain our books in local currencies:  Hungarian forint for Euroweb Hungary
and the Romanian lei for Euroweb Romania.

Our  operations  are primarily  outside of the United States  through our wholly
owned  subsidiaries.  As a result,  fluctuations in currency  exchange rates may
significantly  affect our revenues,  net income and financial  position when the
foreign  currencies  of our  international  operations  are  translated  into US
dollars for financial  reporting.  In addition,  we are also subject to currency
fluctuation   risk  with  respect  to  certain  foreign   currency   denominated
receivables  and  payables.  Although  we  cannot  predict  the  extent to which
currency fluctuations may affect our business and financial position, there is a
risk  that  such  fluctuations  will have an  adverse  impact  on the  Company's
revenues,  net income and financial position.  Because differing portions of our
revenues and costs are denominated in foreign currencies, movements could impact
our margins by, for example,  decreasing  our foreign  revenues  when the dollar
strengthens and not  correspondingly  decreasing our expenses.  The Company does
not currently hedge its foreign currency exposure.  In the future, we may engage
in hedging transactions to mitigate foreign exchange risk.

During the nine months ended 2005, the Romanian lei  appreciated 14% against the
US dollar  and the  Hungarian  forint  appreciated  5%  against  the US  dollar,
compared to the nine months ended 2004.

      Effect of Recent Accounting Pronouncements

In December 2004, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 123 (revised  2004),  "Share-Based  Payment"  ("SFAS  123(R)").  SFAS 123(R)
requires an entity to recognize the  grant-date  fair value of stock options and
other equity-based compensation issued to employees in the income statement, but
expresses  no  preference  for a type of  valuation  model.  For small  business
issuers,  the SFAS 123(R) is effective as of the  beginning of the first interim
or annual  reporting  period that begins after December 15, 2005. Early adoption
is encouraged  for interim or annual periods for which  financial  statements or
interim  reports have not been issued.  The Company is currently  assessing  the
impact SFAS 123(R) will have on its financial statements.


                                       26


In  December  2004,  the FASB issued SFAS No.  153,  "Exchanges  of  Nonmonetary
Assets:  an amendment of APB Opinion No. 29" ("SFAS 153"). SFAS 153 eliminates a
company's  ability to use the similar  productive  assets concept to account for
nonmonetary  exchanges at book value  without  recognizing  a gain.  Nonmonetary
exchanges  will  have to be  accounted  for at  fair  value,  with  gain or loss
recognized,  if the transactions meet a commercial-substance  criterion and fair
value is determinable.  SFAS 153 is effective for nonmonetary asset exchanges in
fiscal periods beginning after June 15, 2005, and early application is permitted
for  nonmonetary  asset  exchanges  occurring in fiscal periods  beginning after
December 16, 2004.  The Company is currently  assessing  the impact SFAS 153 may
have on its financial statements.

In December 2004, the FASB issued SFAS No. 151,  "Inventory Costs - an amendment
of ARB No. 43,  Chapter 4" ("SFAS  151").  SFAS 151 amends  Accounting  Research
Bulletin No. 43, Chapter 4, "Inventory  Pricing" ("ARB 43") to eliminate the "so
abnormal"  criterion  in ARB 43 and requires  companies  to  recognize  abnormal
freight,   handling  costs,  and  amounts  of  wasted  material   (spoilage)  as
current-period charges.  Additionally,  SFAS 151 clarifies that fixed production
overhead cost should be allocated to inventory  based on the normal  capacity of
the  production  facility.  SFAS 151 is effective for inventory  costs  incurred
during annual  periods  beginning  after June 15, 2005. The Company is currently
assessing the impact SFAS 151 may have on its financial statements.

            In May 2005, the FASB issued SFAS No. 154,  "Accounting  Changes and
Error  Corrections" which replaces  Accounting  Principles Board Opinions No. 20
"Accounting  Changes" and SFAS No. 3, "Reporting  Accounting  Changes in Interim
Financial  Statements."  This  statement  applies  to all  voluntary  changes in
accounting  principle and changes  resulting  from adoption of a new  accounting
pronouncement that does not specify transition  requirements.  SFAS 154 requires
retrospective  application to prior periods' financial statements for changes in
accounting  principle  unless  it  is  impracticable  to  determine  either  the
period-specific  effects or the cumulative  effect of the change.  SFAS 154 also
requires that retrospective  application of a change in accounting  principle be
limited to the direct  effects of the  change.  Indirect  effects of a change in
accounting  principle  should be  recognized  in the  period  of the  accounting
change.  SFAS 154 is effective for accounting  changes and corrections of errors
made in fiscal years beginning after December 15, 2005 with early implementation
permitted for accounting  changes and corrections of errors made in fiscal years
beginning after the date this statement was issued. SFAS 154 is effective for us
as of  January  1, 2006 and is not  expected  to have a  material  impact on our
financial statements.



                                       27


      Forward-Looking Statements

When  used in this  Form  10-QSB,  in  other  filings  by the  Company  with the
Securities and Exchange  Commission  ("SEC"), in the Company's press releases or
other public or stockholder communications,  or in oral statements made with the
approval of an authorized executive officer of the Company, the words or phrases
"would be," "will allow," "intends to," "will likely result," "are expected to,"
"will continue," "is anticipated," "estimate," "project," or similar expressions
are intended to identify "forward-looking  statements" within the meaning of the
Private Securities Litigation Reform Act of 1995.

The Company cautions readers not to place undue reliance on any  forward-looking
statements,  which  speak  only  as of the  date  made,  are  based  on  certain
assumptions  and  expectations  which may or may not be valid or actually occur,
and which involve various risks and uncertainties.  In addition, sales and other
revenues  may not  commence  and/or  continue  as  anticipated  due to delays or
otherwise.  As a result,  the Company's  actual results for future periods could
differ materially from those anticipated or projected.

Unless otherwise required by applicable law, the Company does not undertake, and
specifically disclaims any obligation, to update any forward-looking  statements
to reflect  occurrences,  developments,  unanticipated  events or  circumstances
after  the  date of such  statement.  The  Company  advises  you to  review  any
additional  disclosures  made in its 10-QSB,  8-K, and 10-KSB reports filed with
the SEC.

Item 3.  Controls and Procedures

As of the end of the period covered by this report,  we conducted an evaluation,
under the supervision and with the  participation of our chief executive officer
and chief accounting  officer  (principal  financial  officer) of our disclosure
controls and  procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the
Exchange Act). Based upon this evaluation, our chief executive officer and chief
accounting officer  (principal  financial officer) concluded that our disclosure
controls and procedures are effective to ensure that information  required to be
disclosed  by us in the  reports  that we file or submit  under  the  Securities
Exchange  Act of 1934,  as  amended,  is  recorded,  processed,  summarized  and
reported,  within the time  periods  specified  in the  Securities  and Exchange
Commission's rules and forms. There was no change in our internal controls or in
other factors that could affect these  controls  during our last fiscal  quarter
that has materially affected,  or is reasonably likely to materially affect, our
internal control over financial reporting.


                                       28


                                    PART II

ITEM 1.     LEGAL PROCEEDINGS

            From time to time,  the Company may become a party to  litigation or
            other  legal  proceedings  that  it  considers  to be a part  of the
            ordinary  course  of its  business.  The  Company  is  not  involved
            currently in legal  proceedings that could reasonably be expected to
            have a material adverse effect on its business, prospects, financial
            condition or results of operations.  The Company may become involved
            in material legal proceedings in the future.

ITEM  2.    CHANGES IN SECURITIES

            On October 7, 2005,  the  Company  issued  441,566  shares of common
            stock to Graeton  Holdings Limited in exchange for the 15% ownership
            in Navigator  Rt, based on the share  purchase  agreement  signed on
            July 21, 2005.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

            None.

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

            None.

ITEM 5.     OTHER INFORMATION

            None.

ITEM 6.  EXHIBITS

Exhibits (numbers below reference Regulation S-B, Item 601)

      (3)   (a)   Certificate of Incorporation filed November 9, 1992(1)

            (b)   Amendment  to  Certificate  of  Incorporation  filed  July  9,
                  1997(2)

            (c)   Restated Certificate of Incorporation filed May 29, 2003

            (d)   Restated  By-laws  (filed as an exhibit to the Form 10-QSB for
                  the quarter ended September 30, 2004)

      (31)  (a)   Certification  of  the  Chief  Executive  Officer  of  Euroweb
            International  Corp.  pursuant to Section 302 of the  Sarbanes-Oxley
            Act of 2002.


      (31)  (b)  Certification  of  the  Chief  Accounting   Officer  (principal
            financial  officer)  of  Euroweb  International  Corp.  pursuant  to
            Section 302 of the Sarbanes-Oxley Act of 2002.


      (32)  (a)   Certification  of  the  Chief  Executive  Officer  of  Euroweb
            International  Corp.  pursuant to Section 906 of the  Sarbanes-Oxley
            Act of 2002.


      (32)  (b)  Certification  of  the  Chief  Accounting   Officer  (principal
            financial  officer)  of  Euroweb  International  Corp.  pursuant  to
            Section 906 of the Sarbanes-Oxley Act of 2002.

----------
(1)  Exhibits  are  incorporated  by  reference  to  Registrant's   Registration
Statement  on Form SB-2 dated May 12, 1993  (Registration  No.  33-62672-NY,  as
amended)


                                       29


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934, as amended, the Registrant has duly caused this Report to be signed
on its behalf by the  undersigned,  thereunto  duly  authorized,  in the City of
Budapest, Hungary, on the 14th day of November 2005.

                                EUROWEB INTERNATIONAL CORP.


                                By /s/ Csaba Toro
                                   ------------------------
                                   Csaba Toro
                                   Chief Executive Officer


                                       30