| Nevada                                         |   | 000-27467                |   | 76-0196431                        |
|------------------------------------------------|--------|--------------------------|--------|-----------------------------------|
| (State or other jurisdiction of incorporation) |   | (Commission File Number) |   | (IRS Employer Identification No.) |

----

|                                                                                                                                                                                                      |   | March 31,   |    |   | December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|---------|--------|--------------|--------|
|                                                                                                                                                                                                      |   | 2011        |    |   | 2010         |   |
|                                                                                                                                                                                                      |   | (unaudited) |    |   |         |   |
| ASSETS                                                                                                                                                                                                    |   |
| Current assets                                                                                                                                                                                            |   |        |    |   |         |   |
| Cash and cash equivalents                                                                                                                                                                                 |   | $           | 758     |   |         | $      | 43 |   |
| Securities held for resale                                                                                                                                                                                |   |        | 40      |   |         |   | - |   |
| Accounts receivable, net                                                                                                                                                                                  |   |        | 424     |   |         |   | 392 |   |
| Accounts receivable, other                                                                                                                                                                                |   |        | 518     |   |         |   | 124 |   |
| Inventories                                                                                                                                                                                               |   |        | 218     |   |         |   | 255 |   |
| Prepaid expenses and other current assets                                                                                                                                                                 |   |        | 172     |   |         |   | 105 |   |
| Total current assets                                                                                                                                                                                      |   |        | 2,130   |   |         |   | 919 |   |
|                                                                                                                                                                                                      |   |        |    |   |         |   |   |   |
| Property and equipment                                                                                                                                                                                    |   |        |    |   |         |   |   |   |
| Property and equipment                                                                                                                                                                                    |   |        | 8,425   |   |         |   | 10,001 |   |
| Less: accumulated depreciation                                                                                                                                                                            |   |        | (4,637  | )      |         |   | (5,987 | ) |
| Net property and equipment                                                                                                                                                                                |   |        | 3,788   |   |         |   | 4,014 |   |
|                                                                                                                                                                                                      |   |        |    |   |         |   |   |   |
| Goodwill                                                                                                                                                                                                  |   |        | 176     |   |         |   | 1,255 |   |
| Intangible assets, net                                                                                                                                                                                    |   |        | -       |   |         |   | 134 |   |
| Other assets                                                                                                                                                                                              |   |        | 59      |   |         |   | 170 |   |
|                                                                                                                                                                                                      |   |        |    |   |         |   |   |   |
| Total assets                                                                                                                                                                                              |   | $           | 6,153   |   |         | $      | 6,492 |   |
| LIABILITIES AND SHAREHOLDERS’ DEFICIT                                                                                                                                                               |   |
| Current liabilities:                                                                                                                                                                                      |   |        |    |   |         |   |   |   |
| Notes payable and current portion of long-term debt                                                                                                                                                       |   | $           | 220     |   |         | $      | 598 |   |
| Current portion of long-term capital leases                                                                                                                                                               |   |        | 228     |   |         |   | 446 |   |
| Accounts payable                                                                                                                                                                                          |   |        | 767     |   |         |   | 872 |   |
| Accrued expenses                                                                                                                                                                                          |   |        | 709     |   |         |   | 1,139 |   |
| Derivative liabilities                                                                                                                                                                                    |   |        | -       |   |         |   | 13 |   |
| Deferred liability and revenue                                                                                                                                                                            |   |        | 291     |   |         |   | 500 |   |
| Total current liabilities                                                                                                                                                                                 |   |        | 2,215   |   |         |   | 3,568 |   |
|                                                                                                                                                                                                      |   |        |    |   |         |   |   |   |
| Line of credit                                                                                                                                                                                            |   |        | 5,086   |   |         |   | 5,225 |   |
| Long-term debt, net of current portion                                                                                                                                                                    |   |        | -       |   |         |   | 78 |   |
| Long-term capital leases, net of current portion                                                                                                                                                          |   |        | 308     |   |         |   | 343 |   |
| Total liabilities                                                                                                                                                                                         |   |        | 7,609   |   |         |   | 9,214 |   |
|                                                                                                                                                                                                      |   |        |    |   |         |   |   |   |
| Commitments                                                                                                                                                                                               |   |        |    |   |         |   |   |   |
|                                                                                                                                                                                                      |   |        |    |   |         |   |   |   |
| Shareholders’ deficit:                                                                                                                                                                              |   |        |    |   |         |   |   |   |
| Preferred stock  -  $.001 par value Series A authorized 25,000,000 shares Issued and outstanding at March 31, 2011, and December 31, 2010, 4,412,583 and 4,612,583, respectively |   |        | 5       |   |         |   | 5 |   |
| Common stock  -  $.001 par value Authorized 975,000,000 shares Issued and outstanding at March 31, 2011, and December 31, 2010, 469,253,146 and 392,402,346, respectively             |   |        | 469     |   |         |   | 392 |   |
| Additional paid in capital                                                                                                                                                                                |   |        | 45,722  |   |         |   | 44,700 |   |
| Accumulated deficit                                                                                                                                                                                       |   |        | (47,652 | )      |         |   | (47,819 | ) |
| Total shareholders’ deficit                                                                                                                                                                         |   |        | (1,456  | )      |         |   | (2,722 | ) |
|                                                                                                                                                                                                      |   |        |    |   |         |   |   |   |
| Total liabilities and shareholders' deficit                                                                                                                                                               |   | $           | 6,153   |   |         | $      | 6,492 |   |

----

|                                              |   | 2011   |   |   | 2010   |   |
|---------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                              |   |   |   |   |   |   |
| Sales:                                            |   |   |   |   |   |   |
| Products                                          |   | $      | 28     |   |   | $      | 13 |   |
| Services                                          |   |   | 1,101  |   |   |   | 899 |   |
| Total sales                                       |   |   | 1,129  |   |   |   | 912 |   |
|                                              |   |   |   |   |   |   |   |   |
| Costs of goods sold:                              |   |   |   |   |   |   |   |   |
| Products and integration services                 |   |   | 306    |   |   |   | 267 |   |
| Rent, repairs and maintenance                     |   |   | 75     |   |   |   | 96 |   |
| Depreciation                                      |   |   | 342    |   |   |   | 334 |   |
| Total costs of goods sold                         |   |   | 723    |   |   |   | 697 |   |
| Gross profit                                      |   |   | 406    |   |   |   | 215 |   |
| Operating expenses:                               |   |   |   |   |   |   |   |   |
| Selling, general and administrative               |   |   | 1,095  |   |   |   | 1,784 |   |
| Depreciation and amortization                     |   |   | 69     |   |   |   | 94 |   |
| Total operating expenses                          |   |   | 1,164  |   |   |   | 1,878 |   |
| Operating loss from continuing operations         |   |   | (758   | )      |   |   | (1,663 | ) |
| Other income (expenses):                          |   |   |   |   |   |   |   |   |
| Interest expense, net                             |   |   | (197   | )      |   |   | (393 | ) |
| Gain on sale of assets, net and other income      |   |   | 1,179  |   |   |   | 3 |   |
| Unrealized gain on investment                     |   |   | 8      |   |   |   | - |   |
| Derivative income                                 |   |   | 13     |   |   |   | 169 |   |
| Total other income (expense)                      |   |   | 1,003  |   |   |   | (221 | ) |
| Income (loss) from continuing operations          |   |   | 245    |   |   |   | (1,884 | ) |
| Loss from discontinued operations                 |   |   | (78    | )      |   |   | (191 | ) |
| Net income (loss)                                 |   | $      | 167    |   |   | $      | (2,075 | ) |
| Basic and diluted income (loss) per common share: |   |   |   |   |   |   |   |   |
| Loss from continuing operations                   |   | $      | (0.00  | )      |   | $      | (0.01 | ) |
| Loss from discontinued operations                 |   | $      | (0.00  | )      |   | $      | (0.00 | ) |
| Net income (loss)                                 |   | $      | 0.00   |   |   | $      | (0.01 | ) |

----

|                                                                                 |   | 2011   |   |   | 2010   |   |
|--------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                                 |   |   |   |   |   |   |
| Cash flows from operating activities                                                 |   |   |   |   |   |   |
| Net income (loss) from continuing operations and other revenue, net                  |   | $      | 245    |   |   | $      | (1,884 | ) |
| Loss from discontinued operations                                                    |   |   | (78    | )      |   |   | (191 | ) |
| Net income (loss)                                                                    |   |   | 167    |   |   |   | (2,075 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Adjustments to reconcile net income (loss) to net cash used by operating activities: |   |   |   |   |   |   |   |   |
| Gain on sale of assets                                                               |   |   | (1,176 | )      |   |   | - |   |
| Amortization of debt discount                                                        |   |   | -      |   |   |   | 82 |   |
| Depreciation and amortization                                                        |   |   | 466    |   |   |   | 756 |   |
| Stock based compensation                                                             |   |   | -      |   |   |   | 13 |   |
| Stock issued for services rendered, interest  and compensation             |   |   | 547    |   |   |   | 421 |   |
| Derivative (income)                                                                  |   |   | (13    | )      |   |   | (169 | ) |
| Unrealized gain on investment                                                        |   |   | (8     | )      |   |   | - |   |
| Bad debt expense                                                                     |   |   | -      |   |   |   | 32 |   |
| Changes in:                                                                          |   |   |   |   |   |   |   |   |
| Accounts receivable, net                                                             |   |   | (26    | )      |   |   | 33 |   |
| Accounts receivable, other                                                           |   |   | (94    | )      |   |   | (7 | ) |
| Inventories                                                                          |   |   | (16    | )      |   |   | (24 | ) |
| Prepaid expenses                                                                     |   |   | (67    | )      |   |   | 51 |   |
| Costs and profits in excess of billings                                              |   |   | -      |   |   |   | (1 | ) |
| Accounts payable                                                                     |   |   | (94    | )      |   |   | 191 |   |
| Accrued expenses                                                                     |   |   | (426   | )      |   |   | 201 |   |
| Deferred liability and revenue                                                       |   |   | (209   | )      |   |   | (78 | ) |
| Total adjustment                                                                     |   |   | (1,116 | )      |   |   | 1,501 |   |
| Net cash used by operating activities                                                |   |   | (949   | )      |   |   | (574 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Cash flows from investing activities                                                 |   |   |   |   |   |   |   |   |
| Purchase of property and equipment                                                   |   |   | (717   | )      |   |   | (370 | ) |
| Proceeds from sale of assets, net of cash received                                   |   |   | 2,700  |   |   |   | - |   |
| Change in other assets                                                               |   |   | (23    | )      |   |   | 18 |   |
| Net cash provided and (used by) investing activities                                 |   |   | 1,960  |   |   |   | (352 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Cash flows from financing activities                                                 |   |   |   |   |   |   |   |   |
| Net proceeds from line of credit                                                     |   |   | 328    |   |   |   | 750 |   |
| Proceeds from long-term debt obligations                                             |   |   | -      |   |   |   | 605 |   |
| Payment of long-term debt obligations                                                |   |   | (371   | )      |   |   | (608 | ) |
| Payment on capital lease obligations                                                 |   |   | (253   | )      |   |   | (226 | ) |
| Proceeds from sale of common stock, net                                              |   |   | -      |   |   |   | 252 |   |
| Net cash (used) and provided by financing activities                                 |   |   | (296   | )      |   |   | 773 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Net change in cash                                                                   |   |   | 715    |   |   |   | (153 | ) |
| Cash and cash equivalents at the beginning of the period                             |   |   | 43     |   |   |   | 228 |   |
| Cash and cash equivalents at the end of the period                                   |   | $      | 758    |   |   | $      | 75 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                                    |   |   |   |   |   |
| Net cash paid during the year for:                                                   |   |   |   |   |   |   |   |   |
| Interest                                                                             |   | $      | 36     |   |   | $      | 91 |   |
| Income taxes                                                                         |   | $      | -      |   |   | $      | - |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Supplemental non-cash investing and financing activities:                            |   |   |   |   |   |
|    Conversion of debt through issuance of common stock                |   | $      | 85     |   |   | $      | 124 |   |
|    Conversion of LOC and interest through issuance of Common stock    |   | $      | 600    |   |   | $      | - |   |

----

|           |   | March 31, |   |   | December 31, |   |
|----------------|--------|-----------|--------|--------|--------------|--------|
|           |   | 2011      |   |   | 2010         |   |
| Raw material   |   | $         | 49     |   |         | $      | 48 |   |
| Finished goods |   |      | 169    |   |         |   | 207 |   |
|           |   | $         | 218    |   |         | $      | 255 |   |

----

|                            |   | March 31, |   |   | December 31, |   |
|---------------------------------|--------|-----------|--------|--------|--------------|--------|
|                            |   | 2011      |   |   | 2010         |   |
| Accounts receivable             |   | $         | 540    |   |         | $      | 508 |   |
| Allowance for doubtful accounts |   |      | (116   | )      |         |   | (116 | ) |
| Accounts receivable, net        |   | $         | 424    |   |         | $      | 392 |   |

|                           |   | March 31, |   |   | December 31, |   |
|--------------------------------|--------|-----------|--------|--------|--------------|--------|
|                           |   | 2011      |   |   | 2010         |   |
| Automobiles                    |   | $         | 295    |   |         | $      | 326 |   |
| Operating equipment            |   |      | 6,404  |   |         |   | 8,342 |   |
| Office furniture and equipment |   |      | 223    |   |         |   | 253 |   |
| Leasehold improvements         |   |      | 66     |   |         |   | 67 |   |
| Computer equipment             |   |      | 291    |   |         |   | 376 |   |
| Building                       |   |      | 29     |   |         |   | 29 |   |
| Land                           |   |      | 37     |   |         |   | 37 |   |
| Construction in progress       |   |      | 1,080  |   |         |   | 571 |   |
| Total property and equipment   |   |      | 8,425  |   |         |   | 10,001 |   |
| Less accumulated depreciation  |   |      | (4,637 | )      |         |   | (5,987 | ) |
| Net property and equipment     |   | $         | 3,788  |   |         | $      | 4,014 |   |

|   | ● | On June 1, 2009, the Company acquired assets from Frontier Internet, LLC and iTEXAS Net and recognized goodwill of $819,000, which is not subject to amortization.  In February 2011the Company divested Goodwill as part of the sale of the North Texas network to Keyon. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | On January 11, 2008, the Company acquired assets (deemed to be a business) from Crosswind, Inc. and recognized goodwill of $176,000, which is not subject to amortization. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | On November 30, 2007, the Company acquired assets from Tstar, Inc. and recognized goodwill of $35,000, which is not subject to amortization.  In February 2011the Company divested goodwill as part of the sale of the Central Texas network to Keyon. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ● | On October 31, 2007, the Company acquired assets (deemed to be a business) from Momentum, Inc. and recognized goodwill of $225,000, which is not subject to amortization.  In February 2011the Company divested goodwill as part of the sale of the Central Texas network to Keyon. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   |   |                  |   |   | March 31, 2011            |                |
|------------------------|--------|-----------------------|--------|--------|---------------------------|---------------------|
|                   |   | Useful Life(in years) |   |   |  GrossCarryingAmount |                |   |   AccumulatedAmortization |   |   | NetCarryingAmount |   |
|                   |   |                  |   |   |                      |                |   |   |   |   |   |   |
| Customer relationships |   |                  | 3.0    |   |                      | $                   | 2,311 |   |   | $ | 2,311 |   |   | $ | - |   |
| Workforce in place     |   |                  | 3.0    |   |                      |                | 125 |   |   |   | 125 |   |   |   | - |   |
| Non-compete agreement  |   |                  | 3.0    |   |                      |                | 100 |   |   |   | 100 |   |   |   | - |   |
| Developed technology   |   |                  | 3.0    |   |                      |                | 20 |   |   |   | 20 |   |   |   | - |   |
|                   |   |                  |   |   |                      | $                   | 2,556 |   |   | $ | 2,556 |   |   | $ | - |   |
|                   |   |                  |   |   |                      |                |   |   |   |   |   |   |   |   |   |   |
|                   |   |                  |   |   |                      |                |   |   |   |   |   |   |   |   |   |   |
|                   |   |                  |   |   |                      | December 31, 2010   |   |
|                   |   | Useful Life(in years) |   |   |                      | GrossCarryingAmount |   |   |   | AccumulatedAmortization |   |   | NetCarryingAmount |   |
|                   |   |                  |   |   |                      |                |   |   |   |   |   |   |   |   |   |   |
| Customer relationships |   |                  | 3.0    |   |                      | $                   | 2,311 |   |   | $ | 2,177 |   |   | $ | 134 |   |
| Workforce in place     |   |                  | 3.0    |   |                      |                | 125 |   |   |   | 125 |   |   |   | - |   |
| Non-compete agreement  |   |                  | 3.0    |   |                      |                | 100 |   |   |   | 100 |   |   |   | - |   |
| Developed technology   |   |                  | 3.0    |   |                      |                | 20 |   |   |   | 20 |   |   |   | - |   |
|                   |   |                  |   |   |                      | $                   | 2,556 |   |   | $ | 2,422 |   |   | $ | 134 |   |

----

| March 31, 2011                                                   |   | Supplemental Non-Cash Disclosure |   |
|------------------------------------------------------------------|--------|----------------------------------|--------|
| Professional fees                                                |   | $                                | 96     |   |
| Settlements                                                      |   |                             | 170    |   |
| Services and compensation                                        |   |                             | 122    |   |
| Interest expense                                                 |   |                             | 145    |   |
| Other services rendered                                          |   |                             | 14     |   |
|  Total for services, interest, liabilities and compensation |   | $                                | 547    |   |
|                                                             |   |                             |   |   |
| Notes payable                                                    |   | $                                | 85     |   |
| Line of credit, principal                                        |   | $                                | 467    |   |

----

|                                                      |   | 2011Plan |       |
|-----------------------------------------------------------|--------|----------|------------|
| Shares initially reserved                                 |   |     | 25,000,000 |   |
|                                                      |   |     |       |   |
| Shares issued during 2011                                 |   |     | 9,796,699  |   |
|                                                      |   |     |       |   |
| Remaining shares available to be issued at March 31, 2011 |   |     | 15,203,301 |   |
|                                                      |   |     |       |   |
| Shares issued and outstanding as of March 31, 2011        |   |     | 9,796,699  |   |

|                                                      |   | 2010Plan |       |
|-----------------------------------------------------------|--------|----------|------------|
| Shares Initially Reserved                                 |   |     | 25,000,000 |   |
|                                                      |   |     |       |   |
| Remaining shares January 01, 2011                         |   |     | 4,374,409  |   |
|                                                      |   |     |       |   |
| Shares issued during 2011                                 |   |     | 4,374,409  |   |
|                                                      |   |     |       |   |
| Remaining shares available to be issued at March 31, 2011 |   |     | -          |   |
|                                                      |   |     |       |   |
| Shares issued and outstanding as of March 31, 2011        |   |     | 25,000,000 |   |

|                             |   | Shares |    |   | Weighted-Average Exercise Price |   |
|----------------------------------|--------|--------|---------|--------|---------------------------------|--------|
| Outstanding at beginning of year |   |   | 325,000 |   |                            | $      | 0.27 |   |
| Granted                          |   |   | -       |   |                            |   | - |   |
| Exercised                        |   |   | -       |   |                            |   | - |   |
| Forfeited/cancelled              |   |   | -       |   |                            |   | - |   |
|                             |   |   |    |   |                            |   |   |   |
| Outstanding at the end of period |   |   | 325,000 |   |                            | $      | 0.27 |   |
|                             |   |   |    |   |                            |   |   |   |
| Exercisable at March 31, 2011    |   |   | 325,000 |   |                            | $      | 0.27 |   |

----

|           |   |        |   | Remaining Weighted  |   |                                              |   |   | Remaining Weighted |   |
|----------------|--------|-------------|--------|---------------------|--------|---------------------------------------------------|--------|--------|--------------------|--------|
| Class          |   | Number      |   | Average Contractual |   | Number                                            |   |   | Average Exercise   |   |
| Exercise Price |   | Outstanding |   | Life in Years       |   | Exercisable                                       |   |   | Price              |   |
|           |   |        |   |                |   |                                              |   |   |               |   |
| $0.17          |   | 200,000     |   | 4.00                |   |        200,000 |   | $      | 0.17               |   |
| $0.43          |   | 125,000     |   | 2.33                |   |        125,000 |   | $      | 0.43               |   |
|           |   |        |   |                |   |                                              |   |   |               |   |
|           |   | 325,000     |   | 3.17                |   | 325,000                                           |   | $      | 0.27               |   |
|           |   |        |   |                |   |                                              |   |   |               |   |

|                             | March 31, 2011 |                                                    |   | December 31, 2010 |    |
|----------------------------------|----------------|---------------------------------------------------------|--------|-------------------|---------|
|                             |           |                                                    |   |              |    |   |   |
| U. S. Federal statutory tax rate | %              |       34                  |   |              |  % |          34 |   |
| U.S. valuation difference        |           |     (34)                            |   |              |    | (34) |   |
| Effective U. S. tax rate         |           |          - |   |              |    |             - |   |

|                                    |   | March 31, 2011 |                                                                   |   | December 31, 2010 |   |
|-----------------------------------------|--------|----------------|------------------------------------------------------------------------|--------|-------------------|--------|
| Computed expected tax expense (benefit) |   | $              | 57                                                                     |   |              | $      | (2,894) |   |
| Change in valuation allowance           |   |           |            (57) |   |              |   |           2,894 |   |
| Income tax expense                      |   | $              | -                                                                      |   |              | $      | - |   |

|                              |   | March 31, 2011 |                                 |   | December 31, 2010 |
|-----------------------------------|--------|----------------|--------------------------------------|--------|-------------------|
| Deferred tax assets:              |   |           |                                 |   |              |   |   |   |
| Net operating loss carry forwards |   | $              | (15,447)                             |   |              | $ | (15,504) |   |
| Less valuation allowance          |   |           |      15,447 |   |              |   |       15,504 |   |
| Net deferred tax assets           |   | $              | -                                    |   |              | $ | - |   |

----

|                                    |   | For the three months ended March 31, 2011 |   |
|-----------------------------------------|--------|-------------------------------------------|--------|
|                                    |   | Income                                    |   |   | Shares |   |   | Per-Share |   |
|                                    |   | (Numerator)                               |   |   | (Denominator) |   | Amount |   |
| Basic EPS:                              |   |                                      |   |   |   |   |   |   |   |
| Income from continuing operations       |   | $                                         | 245    |   |   |   | 445,507 |   |   | $ | 0.00 |   |
| Loss from discontinued operations       |   | $                                         | (78    | ) |   |   | 445,507 |   |   | $ | (0.00 | ) |
| Income available to common stockholders |   | $                                         | 167    |   |   |   | 445,507 |   |   | $ | 0.00 |   |
| Effect of dilutive securities           |   |                                      | -      |   |   |   | 84,470 |   |   |   | - |   |
| Diluted EPS:                            |   |                                      |   |   |   |   |   |   |   |   |   |   |
| Income from continuing operations       |   | $                                         | 245    |   |   |   | 529,977 |   |   | $ | 0.00 |   |
| Loss from discontinued operations       |   | $                                         | (78    | ) |   |   | 529,977 |   |   | $ | (0.00 | ) |
| Income available to common stockholders |   | $                                         | 167    |   |   |   | 529,977 |   |   | $ | 0.00 |   |
|                                    |   |                                      |   |   |   |   |   |   |   |   |   |   |
|                                    |   | For the three months ended March 31, 2010 |   |
|                                    |   | Income                                    |   |   | Shares |   |   | Per-Share |   |
|                                    |   | (Numerator)                               |   |   | (Denominator) |   | Amount |   |
| Basic EPS:                              |   |                                      |   |   |   |   |   |   |   |   |   |   |
| Loss from continuing operations         |   | $                                         | (1,884 | ) |   |   | 152,709 |   |   | $ | (0.01 | ) |
| Loss from discontinued operations       |   | $                                         | (191   | ) |   |   | 152,709 |   |   | $ | (0.00 | ) |
| Loss available to common stockholders   |   | $                                         | (2,075 | ) |   |   | 152,709 |   |   | $ | (0.01 | ) |
| Effect of dilutive securities           |   |                                      | -      |   |   |   | - |   |   |   | - |   |
| Diluted EPS:                            |   |                                      |   |   |   |   |   |   |   |   |   |   |
| Loss available to common stockholders   |   | $                                         | (2,075 | ) |   |   | 152,709 |   |   | $ | (0.01 | ) |

|                                | Terms                                         |   | Maturity Date |   | Interest Rate |   |   | Balance |   |
|-------------------------------------|-----------------------------------------------|--------|---------------|--------|---------------|--------|--------|---------|--------|
| Bancleasing, Inc.                   | $10,660 / Month including interest            |   | October-14    |   |          | 11.62% |   |    | $      | 394 |   |
| Agility Capital Lease               | $16,997 / Month including interest            |   | Various       |   |          | 18.82% |   |    |   | 142 |   |
| Centramedia                         | $56,342 / Quarterly including interest        |   | December-11   |   |          | 7.50%  |   |    |   | 215 |   |
| Premium Assignment, Insurance notes | $2,434 / Month including interest             |   | September-11  |   |          | 7.54%  |   |    |   | 5 |   |
| Line of credit                      |  2 years/ Quarterly interest (See below) |   | December-13   |   |          | 12.00% |   |    |   | 5,086 |   |
| Total debt                          |                                          |   |          |   |          |   |   |    |   | 5,842 |   |
| Less current maturities             |                                          |   |          |   |          |   |   |    |   | (448 | ) |
| Long-term debt                      |                                          |   |          |   |          |   |   |    | $      | 5,394 |   |

----

| Description                               |   | Bridge Note |   |   | Warrant Liabilities |   |   | Total  |   |
|-------------------------------------------|--------|-------------|--------|--------|---------------------|--------|--------|--------|--------|
| Fair value at December 31, 2010           |   | $           | 225    |   |                | $      | 13     |   |   | $ | 238 |   |
| 01-01-11 to 03-31-11 change in fair value |   |        | -      |   |                |   |   |   |   |   | - |   |
| Repayment                                 |   |        | (225   | )      |                |   | (13    | )      |   |   | (238 | ) |
| Fair value at March 31, 2011              |   | $           | -      |   |                | $      | -      |   |   | $ | - |   |

----

| Period EndingDecember 31, |   | Amount |   |
|---------------------------|--------|--------|--------|
| 2011                      |   | $      | 289    |   |
| 2012                      |   |   | 53     |   |
| 2013                      |   |   | 12     |   |
| 2014                      |   |   | 8      |   |
| 2015                      |   |   | 7      |   |
| Thereafter                |   |   | 16     |   |
| Total                     |   | $      | 385    |   |

----

| Three Months Ended March 31, 2011 |   | WMS    |   |   | WBS    |   |   | EBI    |   |   | ENS   |   |   | Total  |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-------|--------|--------|--------|--------|
| Revenue                           |   | $      | 3      |   |   | $      | 544    |   |   | $      | 535   |   |   | $      | 47     |   |   | $ | 1,129 |   |
| Segment (loss) income             |   |   | (8     | )      |   |   | (121   | )      |   |   | 34    |   |   |   | (31    | ) |   |   | (126 | ) |
| Segment assets                    |   |   | 2      |   |   |   | 2,110  |   |   |   | 1,795 |   |   |   | 1,254  |   |   |   | 5,161 |   |
| Capital expenditures              |   |   | -      |   |   |   | 121    |   |   |   | 591   |   |   |   | -      |   |   |   | 712 |   |
| Depreciation and amortization     |   |   | -      |   |   |   | 255    |   |   |   | 83    |   |   |   | 53     |   |   |   | 391 |   |

| Three Months Ended March 31, 2010 |   | WMS    |   |   | WBS    |   |   | EBI    |   |   | ENS |   |   | Total  |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----|--------|--------|--------|--------|
| Revenue                           |   | $      | 22     |   |   | $      | 666    |   |   | $      | 172 |   |   | $      | 52     |   |   | $ | 912 |   |
| Segment (loss) income             |   |   | (46    | )      |   |   | (347   | )      |   |   | (96 | )      |   |   | (150   | ) |   |   | (639 | ) |
| Segment assets                    |   |   | 33     |   |   |   | 6,082  |   |   |   | 644 |   |   |   | 1,505  |   |   |   | 8,264 |   |
| Capital expenditures              |   |   | -      |   |   |   | 93     |   |   |   | 275 |   |   |   | -      |   |   |   | 368 |   |
| Depreciation and amortization     |   |   | 4      |   |   |   | 316    |   |   |   | 29  |   |   |   | 55     |   |   |   | 404 |   |

| Reconciliation of Segment Loss from Operations |   | Three Months EndedMarch 31, 2011 |   | Three Months EndedMarch 31, 2010 |   |
|------------------------------------------------|--------|----------------------------------|--------|----------------------------------|--------|
| Total segment loss from operations             |   | $                                | (126   | )                                |   | $ | (639 | ) |
| Total corporate overhead                       |   |                             | (632   | )                                |   |   | (1,024 | ) |
| Consolidated loss from operations              |   | $                                | (758   | )                                |   | $ | (1,663 | ) |

----

| Reconciliation of Segment Assets to Total Assets |   | March 31, 2011 |   |   | December 31, 2010 |   |
|--------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
| Total segment assets                             |   | $              | 5,161  |   |              | $      | 6,294 |   |
| Total corporate assets                           |   |           | 992    |   |              |   | 198 |   |
| Consolidated  assets                   |   | $              | 6,153  |   |              | $      | 6,492 |   |

| Keyon Communications asset sale                              |   |   |   |
|--------------------------------------------------------------|--------|--------|--------|
|                                                         |   |   |   |
| Gain on sale of assets to Keyon Communications Holdings Inc. |   | $      | 1,176  |   |
| Accounts receivable                                          |   |   | (6     | ) |
| Inventory                                                    |   |   | 53     |   |
| Deposits                                                     |   |   | 134    |   |
| Property and equipment                                       |   |   | 489    |   |
| Goodwill                                                     |   |   | 1,079  |   |
| Identifiable intangible assets                               |   |   | 122    |   |
| Accounts payable                                             |   |   | (11    | ) |
| Accounts expenses                                            |   |   | (4     | ) |
| Asset selling price                                          |   |   | 3,032  |   |
| Holdback settlement receivable                               |   |   | (300   | ) |
| Equity securities                                            |   |   | (32    | ) |
| Proceeds from sale of assets                                 |   | $      | 2,700  |   |

----

|   | ● | The Company’s financial condition improved dramatically as compared to the most recent fiscal year ended December 31, 2010 and the prior year same quarterly reporting period ended March 31, 2010 including but not limited to the following attributes: |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | The Company reported a Net Income of $167,000 for the quarter ended March 31, 2011 as compared to a Net Loss of ($2,075,000) for the same prior quarter ended March 31, 2010; including a $1,176,000 gain associated with the recent divestiture of certain non-core wireless broadband assets and operations. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | The Company reported a Loss from continuing operations of ($758,000) for the quarter ended March 31, 2011 as compared to a Loss from continuing operations of ($1,663,000) for the same prior quarter ended March 31, 2010; an improvement of $905,000. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | The Company’s Energy Broadband, Inc. subsidiary reported revenues of $535,000 for the quarter ended March 31, 2011 as compared to revenues of $172,000 for the same prior year quarter ended March 31, 2010; an increase of $363,000 or 211%. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | The Company’s overall revenues increased by 24% as compared to the same prior year quarter; comprised of a decline of $122,000 in wireless internet services associated with the divestiture of certain non-core wireless broadband assets and operations, a $19,000 decline in wireless messaging services, a $5,000 decline in enterprise network services; offset by the $363,000 increase in revenues in our oil and gas operations subsidiary, Energy Broadband, Inc. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | The Company reported a reduction of $714,000 or 38% decline in Operating Expenses in the quarter ended March 31, 2011 as compared to the same prior year quarter ended March 31, 2010. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | The Company reported a $1,266,000 improvement in Shareholders’ Equity for the quarter ended March 31, 2011 as compared to the most recent balance sheet at fiscal year ended December 31, 2010. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | The Company’s liquidity position improved by $2,564,000 for the quarter ended March 31, 2011 as compared to the most recent balance sheet at fiscal year ended December 31, 2010; including a $1,211,000 increase in Current Assets, a $1,353,000 decrease in Current Liabilities that included $624,000 retirement of Long-term debt and Capital Lease obligations. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Lastly, the Company invested $717,000 in cash during the quarter ended March 31, 2011for the purchase of assets in its Energy Broadband, Inc. subsidiary for the continued expansion of networks and infrastructure, including increasing its Mobile Broadband Trailer, (“MBT”) fleet associated with the increased oil and gas business growth being experienced. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ● | The completion, closing and funding associated with the divestiture of certain wireless broadband assets and operations that were not core to the Company’s vertical market focus in oil and gas through its subsidiary, Energy Broadband, Inc.  ERF received $3 million in cash and 100,000 shares of KeyOn Communications Holdings, Inc. stock for two wireless networks that were sold, specifically the Central Texas network west of Austin and the smaller North Texas network in Granbury.  The primary allocation of the cash proceeds will be used to retire certain liabilities and to provide for aggressive growth for our oil and gas vertical subsidiary, Energy Broadband. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The Company recently announced that it has entered into four separate contractual agreements with four Texas Independent School Districts to design, engineer, and construct wireless broadband networks utilizing the respective districts’ 2.5GHz Education Broadband Service (EBS) licenses.  Three of the four contracts represent one-time revenues to be recorded in the second fiscal quarter to end on June 30, 2011, while the fourth contract represents a five-year agreement for providing Direct Internet Access and Internet Protocol bandwidth circuits connecting all of the campuses in that school district under a Master Capacity Services Agreement.  These agreements mark the Company’s entry into a new strategic education vertical market that has been under development for some time. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The completion of a Master Services Agreement with KeyOn Communications to deliver digital oilfield solutions in 4 of the 11 states where KeyOn has networks, with initial focus in Texas and Kansas. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The completion of a Master Services Agreement with Bluebird Broadband Services to deliver digital oilfield solutions in the Haynesville Shale market covering northwest Louisiana and northeast Texas. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The completion of a Master Services Agreement with Advanced Data Technologies to deliver digital oilfield solutions in the western Eagle Ford Shale formation in South Texas. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The Company received correspondence from the U.S. Patent Office that the second patent previously applied for relating other aspects of the CryptoVue encrypted security device has been approved and that the patent will be issued as soon as the forms are submitted. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                      |   | Three Months Ended March 31, |   |
|-------------------------------------------|--------|------------------------------|--------|
| ($ in thousands)                          |   | 2011                         |   |   | 2010 |   |   | $ Change |   |   | % Change |   |
| Total sales                               |   | $                            | 1,129  |   |   | $ | 912 |   |   | $ | 217 |   |   |   | 24 | % |
| Cost of goods sold                        |   |                         | 723    |   |   |   | 697 |   |   |   | 26 |   |   |   | 4 | % |
| Gross profit                              |   |                         | 406    |   |   |   | 215 |   |   |   | 191 |   |   |   | 89 | % |
| Gross margin %                            |   |                         | 36     | % |   |   | 24 | % |   |   |   |   |   |   |   |   |
| Operating expenses                        |   |                         | 1,164  |   |   |   | 1,878 |   |   |   | (714 | ) |   |   | -38 | % |
| Operating loss from continuing operations |   |                         | (758   | ) |   |   | (1,663 | ) |   |   | 905 |   |   |   | 54 | % |
| Other income/(expense)                    |   |                         | 1,003  |   |   |   | (221 | ) |   |   | 1,224 |   |   |   | 554 | % |
| Income (loss) from continuing operations  |   |                         | 245    |   |   |   | (1,884 | ) |   |   | 2,129 |   |   |   | 113 | % |
| Loss from discontinued operations         |   |                         | (78    | ) |   |   | (191 | ) |   |   | 113 |   |   |   | 59 | % |
| Net income (loss)                         |   | $                            | 167    |   |   | $ | (2,075 | ) |   |   | 2,242 |   |   |   | 108 | % |

| ($ in thousands)            |   | Three Months Ended March 31, |
|-----------------------------|--------|------------------------------|
| Business Segment            |   |                         | 2011 |   | % of Total |   |   | 2010 |   | % of Total |   | $ Change |   | % Change |
| Wireless Messaging Services |   | $                            |            3 |   | 0% |   | $ |          22 |   | 2% |   | $ |        (19) |   | -86% |
| Wireless Bundled Services   |   |                         |        544 |   | 48% |   |   |        666 |   | 73% |   |   |      (122) |   | -18% |
| Enterprise Network Services |   |                         |          47 |   | 4% |   |   |          52 |   | 6% |   |   |          (5) |   | -10% |
| Energy Broadband, Inc.      |   |                         |        535 |   | 48% |   |   |        172 |   | 19% |   |   |        363 |   | 211% |
| Total Sales                 |   | $                            |     1,129 |   | 100% |   | $ |        912 |   | 100% |   | $ |        217 |   | 24% |

----

| ($ in thousands)            |   | Three Months Ended March 31, |
|-----------------------------|--------|------------------------------|
| Business Segment            |   |                         | 2011 |   |   | % of Total |   |   | 2010 |   | % of Total |   |   |   | $ Change |   |   | % Change |
| Wireless Messaging Services |   | $                            | - |   |   | 0% |   | $ | 17 |   | 2% |   |   | $ | (17) |   |   | -100% |
| Wireless Bundled Services   |   |                         | 327 |   |   | 45% |   |   | 494 |   | 71% |   |   |   | (167) |   |   | -34% |
| Enterprise Network Services |   |                         | 75 |   |   | 10% |   |   | 98 |   | 14% |   |   |   | (23) |   |   | -23% |
| Energy Broadband, Inc.      |   |                         | 321 |   |   | 45% |   |   | 88 |   | 13% |   |   |   | 233 |   |   | 265% |
| Total cost of sales         |   | $                            |  723 |   |   | 100% |   | $ | 697 |   | 100% |   |   | $ | 26 |   |   | 4% |

|                             |   |  Three Months Ended March 31, |   |   |   |   |   |     |
|----------------------------------|--------|------------------------------------|--------|--------|--------|--------|--------|----------|
| ($ in thousands)                 |   | 2011                               |   |   | 2010   |   |   | $ Change |   |   | % Change |   |
|                             |   |                               |   |   |   |   |   |     |   |   |   |   |
| Products and integration service |   | $                                  | 306    |   |   | $      | 267    |     |   | $ | 39 |   |   |   | 15 | % |
| Rent and maintenance             |   |                               | 75     |   |   |   | 96     |     |   |   | (21 | ) |   |   | -22 | % |
| Depreciation                     |   |                               | 342    |   |   |   | 334    |     |   |   | 8 |   |   |   | 2 | % |
| Total cost of sales              |   | $                                  | 723    |   |   | $      | 697    |     |   | $ | 26 |   |   |   | 4 | % |

|                             |   | Three Months Ended March 31, |   |
|----------------------------------|--------|------------------------------|--------|
| ($ in thousands)                 |   | 2011                         |   |   | 2010 |   |   | $ Change |   |   | % Change |   |
|                             |   |                         |   |   |   |   |   |   |   |   |   |   |
| Employment expenses              |   | $                            | 586    |   |   | $ | 1,016 |   |   | $ | (430 | ) |   |   | -42 | % |
| Professional services            |   |                         | 209    |   |   |   | 405 |   |   |   | (196 | ) |   |   | -48 | % |
| Rent and maintenance             |   |                         | 74     |   |   |   | 93 |   |   |   | (19 | ) |   |   | -20 | % |
| Depreciation and amortization    |   |                         | 69     |   |   |   | 94 |   |   |   | (25 | ) |   |   | -27 | % |
| Other general and administrative |   |                         | 226    |   |   |   | 270 |   |   |   | (44 | ) |   |   | -16 | % |
| Total operating expenses         |   | $                            | 1,164  |   |   | $ | 1,878 |   |   | $ | (714 | ) |   |   | -38 | % |

|   | ● | A $430,000 decrease in employment expense. The decrease is primarily attributable to the centralization of our operations thus reducing our employee headcount to 52 at March 31, 2011 from 82 at March 31, 2010; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | A $196,000 decreased in professional services. The decrease is primarily attributable to a reduction in consulting expense of $93,000, investor relations expense of $35,000 and legal of $30,000. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | A $25,000 decrease in depreciation and amortization; and |
|--------|---------|----------------------------------------------------------|

|   | ● | A $44,000 decrease in other general and administrative expense. |
|--------|---------|-----------------------------------------------------------------|

----

----

|   | ● | a significant decrease in the market price of the asset; |
|--------|---------|----------------------------------------------------------|

|   | ● | a significant change in the extent or manner in which the asset is being used; |
|--------|---------|--------------------------------------------------------------------------------|

|   | ● | a significant change in the business climate that could affect the value of the asset; |
|--------|---------|----------------------------------------------------------------------------------------|

|   | ● | a current period loss combined with projection of continuing loss associated with use of the asset; |
|--------|---------|-----------------------------------------------------------------------------------------------------|

|   | ● | a current expectation that, more likely than not, the asset will be sold or otherwise disposed of before the end of its previously estimated useful life; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| Exhibit 31.1 | Certification of Chief Executive officer pursuant to Rules 13a-14 (a) and 15d-14 (a), as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002 |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit 31.2 | Certification of Chief Financial officer pursuant to Rules 13a-14 (a) and 15d-14 (a), as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002 |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit 32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit 32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | By:    | /s/ H. Dean Cubley                    |
|--------|--------|---------------------------------------|
|   |   | H. Dean CubleyChief Executive Officer |
|   | Date:  | May 23, 2011                          |

----