----

----

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

|   | Large accelerated filer o | Accelerated filer o         |   |
|--------|---------------------------|-----------------------------|--------|
|   |                      |                        |   |
|   | Non-accelerated filer o   | Smaller reporting company x |   |

----

----

|                                                                                                                                                                                                                            |   | September 30, |    |   | December 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|--------------|--------|
|                                                                                                                                                                                                                            |   | 2010          |    |   | 2009         |   |
|                                                                                                                                                                                                                            |   | (unaudited)   |    |   |         |   |
| ASSETS                                                                                                                                                                                                                          |   |          |    |   |         |   |
| Current assets                                                                                                                                                                                                                  |   |          |    |   |         |   |
| Cash and cash equivalents                                                                                                                                                                                                       |   | $             | 36      |   |         | $      | 228 |   |
| Accounts receivable, net                                                                                                                                                                                                        |   |          | 440     |   |         |   | 485 |   |
| Accounts receivable, other                                                                                                                                                                                                      |   |          | 122     |   |         |   | 87 |   |
| Inventories                                                                                                                                                                                                                     |   |          | 234     |   |         |   | 222 |   |
| Costs and profits in excess of billings                                                                                                                                                                                         |   |          | 18      |   |         |   | 17 |   |
| Prepaid expenses and other current assets                                                                                                                                                                                       |   |          | 120     |   |         |   | 242 |   |
| Total current assets                                                                                                                                                                                                            |   |          | 970     |   |         |   | 1,281 |   |
|                                                                                                                                                                                                                            |   |          |    |   |         |   |   |   |
| Property and equipment                                                                                                                                                                                                          |   |          |    |   |         |   |   |   |
| Property and equipment                                                                                                                                                                                                          |   |          | 10,017  |   |         |   | 9,347 |   |
| Less: accumulated depreciation                                                                                                                                                                                                  |   |          | (5,526  | )      |         |   | (3,712 | ) |
| Net property and equipment                                                                                                                                                                                                      |   |          | 4,491   |   |         |   | 5,635 |   |
|                                                                                                                                                                                                                            |   |          |    |   |         |   |   |   |
| Goodwill                                                                                                                                                                                                                        |   |          | 1,255   |   |         |   | 1,255 |   |
| Intangible assets, net                                                                                                                                                                                                          |   |          | 197     |   |         |   | 701 |   |
| Other assets                                                                                                                                                                                                                    |   |          | 198     |   |         |   | 245 |   |
|                                                                                                                                                                                                                            |   |          |    |   |         |   |   |   |
| Total assets                                                                                                                                                                                                                    |   | $             | 7,111   |   |         | $      | 9,117 |   |
|                                                                                                                                                                                                                            |   |          |    |   |         |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ DEFICIT                                                                                                                                                                                     |   |          |    |   |         |   |   |   |
| Current liabilities:                                                                                                                                                                                                            |   |          |    |   |         |   |   |   |
| Notes payable and current portion of long-term debt                                                                                                                                                                             |   | $             | 939     |   |         | $      | 1,881 |   |
| Current portion of long-term capital leases                                                                                                                                                                                     |   |          | 543     |   |         |   | 854 |   |
| Accounts payable                                                                                                                                                                                                                |   |          | 779     |   |         |   | 586 |   |
| Accrued expenses                                                                                                                                                                                                                |   |          | 842     |   |         |   | 486 |   |
| Derivative liabilities                                                                                                                                                                                                          |   |          | 42      |   |         |   | 269 |   |
| Deferred liability and revenue                                                                                                                                                                                                  |   |          | 559     |   |         |   | 585 |   |
| Total current liabilities                                                                                                                                                                                                       |   |          | 3,704   |   |         |   | 4,661 |   |
|                                                                                                                                                                                                                            |   |          |    |   |         |   |   |   |
| Line of credit                                                                                                                                                                                                                  |   |          | 5,776   |   |         |   | 5,449 |   |
| Long-term debt, net of current portion                                                                                                                                                                                          |   |          | 171     |   |         |   | 442 |   |
| Long-term capital leases, net of current portion                                                                                                                                                                                |   |          | 426     |   |         |   | 789 |   |
| Deferred liability and revenue, net of current portion                                                                                                                                                                          |   |          | 37      |   |         |   | 150 |   |
| Total liabilities                                                                                                                                                                                                               |   |          | 10,114  |   |         |   | 11,491 |   |
|                                                                                                                                                                                                                            |   |          |    |   |         |   |   |   |
| Commitments                                                                                                                                                                                                                     |   |          |    |   |         |   |   |   |
|                                                                                                                                                                                                                            |   |          |    |   |         |   |   |   |
| Shareholders’ deficit:                                                                                                                                                                                                    |   |          |    |   |         |   |   |   |
| Preferred stock  -  $.001 par value, Authorized 25,000,000 Series A authorized 5,000,000 shares; issued and outstanding at September 30, 2010, and December 31, 2009, 2,600,706 and 3,043,580, respectively |   |          | 3       |   |         |   | 3 |   |
| Common stock  -  $.001 par value Authorized 475,000,000 shares issued and outstanding at September 30, 2010, and December 31, 2009, 298,701,509 and 145,575,735, respectively                               |   |          | 299     |   |         |   | 146 |   |
| Additional paid in capital                                                                                                                                                                                                      |   |          | 42,233  |   |         |   | 36,785 |   |
| Accumulated deficit                                                                                                                                                                                                             |   |          | (45,538 | )      |         |   | (39,308 | ) |
| Total shareholders’ deficit                                                                                                                                                                                               |   |          | (3,003  | )      |         |   | (2,374 | ) |
|                                                                                                                                                                                                                            |   |          |    |   |         |   |   |   |
| Total liabilities and shareholders' deficit                                                                                                                                                                                     |   | $             | 7,111   |   |         | $      | 9,117 |   |

----

|                                 |   | For the Three Months |   |   | For the Nine Months |   |
|--------------------------------------|--------|----------------------|--------|--------|---------------------|--------|
|                                 |   | Ended September 30,  |   |   | Ended September 30, |   |
|                                 |   | 2010                 |   |   | 2009                |   |   | 2010 |   |   | 2009 |   |
| Sales:                               |   |                 |   |   |                |   |   |   |   |   |   |   |
| Products                             |   | $                    | 26     |   |                | $      | 75 |   |   | $ | 126 |   |   | $ | 230 |   |
| Services                             |   |                 | 1,410  |   |                |   | 1,429 |   |   |   | 4,366 |   |   |   | 3,875 |   |
| Total sales                          |   |                 | 1,436  |   |                |   | 1,504 |   |   |   | 4,492 |   |   |   | 4,105 |   |
|                                 |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Costs of goods sold:                 |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Products and integration services    |   |                 | 325    |   |                |   | 378 |   |   |   | 1,076 |   |   |   | 1,116 |   |
| Rent, repairs and maintenance        |   |                 | 127    |   |                |   | 124 |   |   |   | 396 |   |   |   | 330 |   |
| Depreciation                         |   |                 | 516    |   |                |   | 333 |   |   |   | 1,515 |   |   |   | 894 |   |
| Total costs of goods sold            |   |                 | 968    |   |                |   | 835 |   |   |   | 2,987 |   |   |   | 2,340 |   |
|                                 |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit                         |   |                 | 468    |   |                |   | 669 |   |   |   | 1,505 |   |   |   | 1,765 |   |
|                                 |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                  |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative  |   |                 | 2,108  |   |                |   | 2,422 |   |   |   | 6,048 |   |   |   | 6,761 |   |
| Depreciation and amortization        |   |                 | 262    |   |                |   | 379 |   |   |   | 810 |   |   |   | 1,101 |   |
| Total operating expenses             |   |                 | 2,370  |   |                |   | 2,801 |   |   |   | 6,858 |   |   |   | 7,862 |   |
|                                 |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Loss from operations                 |   |                 | (1,902 | )      |                |   | (2,132 | ) |   |   | (5,353 | ) |   |   | (6,097 | ) |
|                                 |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):              |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense, net                |   |                 | (318   | )      |                |   | (347 | ) |   |   | (1,134 | ) |   |   | (890 | ) |
| Sale of assets, net and other income |   |                 | (20    | )      |                |   | 3 |   |   |   | (14 | ) |   |   | 8 |   |
| Loss on extinguishment of debt       |   |                 | (63    | )      |                |   | - |   |   |   | (63 | ) |   |   | - |   |
| Derivative income (expense)          |   |                 | 7      |   |                |   | (47 | ) |   |   | 334 |   |   |   | (2 | ) |
| Total other income (expense)         |   |                 | (394   | )      |                |   | (391 | ) |   |   | (877 | ) |   |   | (884 | ) |
|                                 |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                             |   | $                    | (2,296 | )      |                | $      | (2,523 | ) |   | $ | (6,230 | ) |   | $ | (6,981 | ) |
|                                 |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Net loss per common share:           |   |                 |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                |   | $                    | (0.01  | )      |                | $      | (0.02 | ) |   | $ | (0.03 | ) |   | $ | (0.06 | ) |
| Diluted                              |   | $                    | (0.01  | )      |                | $      | (0.02 | ) |   | $ | (0.03 | ) |   | $ | (0.06 | ) |

----

|                                                                        |   | 2010   |   |   | 2009   |   |
|-----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                        |   |   |   |   |   |   |
| Cash flows from operating activities                                        |   |   |   |   |   |   |
| Net loss                                                                    |   | $      | (6,230 | )      |   | $      | (6,981 | ) |
|                                                                        |   |   |   |   |   |   |   |   |
| Adjustments to reconcile net loss to net cash used by operating activities: |   |   |   |   |   |   |   |   |
| Loss on sale of assets                                                      |   |   | 1      |   |   |   | - |   |
| Loss on foreign exchange translation                                        |   |   | 2      |   |   |   | - |   |
| Loss on extinguishment of debt                                              |   |   | 63     |   |   |   | - |   |
| Amortization of debt discount                                               |   |   | 162    |   |   |   | 149 |   |
| Depreciation and amortization                                               |   |   | 2,325  |   |   |   | 1,996 |   |
| Stock based compensation                                                    |   |   | 13     |   |   |   | - |   |
| Stock issued for services rendered and interest                             |   |   | 1,460  |   |   |   | 1,976 |   |
| Derivative (income) expense                                                 |   |   | (334   | )      |   |   | 2 |   |
| Bad debt expense                                                            |   |   | 100    |   |   |   | 90 |   |
| Changes in:                                                                 |   |   |   |   |   |   |   |   |
| Accounts receivable, net                                                    |   |   | (55    | )      |   |   | (131 | ) |
| Accounts receivable, other                                                  |   |   | (35    | )      |   |   | (110 | ) |
| Inventories                                                                 |   |   | (12    | )      |   |   | (80 | ) |
| Prepaid expenses                                                            |   |   | 122    |   |   |   | 182 |   |
| Costs and profits in excess of billings                                     |   |   | (1     | )      |   |   | 341 |   |
| Accounts payable                                                            |   |   | 191    |   |   |   | (112 | ) |
| Accrued expenses                                                            |   |   | 762    |   |   |   | 304 |   |
| Deferred liability and revenue                                              |   |   | (139   | )      |   |   | 167 |   |
| Total adjustment                                                            |   |   | 4,625  |   |   |   | 4,774 |   |
| Net cash used by operating activities                                       |   |   | (1,605 | )      |   |   | (2,207 | ) |
|                                                                        |   |   |   |   |   |   |   |   |
| Cash flows from investing activities                                        |   |   |   |   |   |   |   |   |
| Proceeds from sale of assets                                                |   |   | 8      |   |   |   | - |   |
| Purchase of property and equipment                                          |   |   | (687   | )      |   |   | (645 | ) |
| Business acquisitions, net of cash acquired                                 |   |   | -      |   |   |   | (167 | ) |
| Change in other assets                                                      |   |   | 47     |   |   |   | 19 |   |
| Net cash used by investing activities                                       |   |   | (632   | )      |   |   | (793 | ) |
|                                                                        |   |   |   |   |   |   |   |   |
| Cash flows from financing activities                                        |   |   |   |   |   |   |   |   |
| Net proceeds from line of credit                                            |   |   | 2,296  |   |   |   | 1,960 |   |
| Proceeds from notes payable                                                 |   |   | -      |   |   |   | 150 |   |
| Proceeds from long-term debt obligations                                    |   |   | 759    |   |   |   | 1,390 |   |
| Payment of long-term debt obligations                                       |   |   | (768   | )      |   |   | (364 | ) |
| Payment on capital lease obligations                                        |   |   | (674   | )      |   |   | (656 | ) |
| Proceeds from sale of common stock, net                                     |   |   | 432    |   |   |   | 334 |   |
| Net cash provided by financing activities                                   |   |   | 2,045  |   |   |   | 2,814 |   |
|                                                                        |   |   |   |   |   |   |   |   |
| Net change in cash                                                          |   |   | (192   | )      |   |   | (186 | ) |
| Cash and cash equivalents at the beginning of the period                    |   |   | 228    |   |   |   | 348 |   |
| Cash and cash equivalents at the end of the period                          |   | $      | 36     |   |   | $      | 162 |   |
|                                                                        |   |   |   |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                           |   |   |   |   |   |
| Net cash paid during the year for:                                          |   |   |   |   |   |   |   |   |
| Interest                                                                    |   | $      | 203    |   |   | $      | 254 |   |
| Income taxes                                                                |   | $      | -      |   |   | $      | - |   |
|                                                                        |   |   |   |   |   |   |   |   |
| Supplemental non-cash investing and financing activities:                   |   |   |   |   |   |
| Conversion of debt through issuance of common stock                         |   | $      | 1,789  |   |   | $      | 320 |   |
| Conversion of debt through issuance of preferred stock                      |   | $      | 1,904  |   |   | $      | - |   |
| Issuance of shares for asset acquisition                                    |   | $      | -      |   |   | $      | 884 |   |
| Property acquired under capital lease                                       |   | $      | -      |   |   | $      | 68 |   |
| Note payable for acquisition                                                |   | $      | -      |   |   | $      | 444 |   |

----

|           |   | September 30, |   |   | December 31, |   |
|----------------|--------|---------------|--------|--------|--------------|--------|
|           |   | 2010          |   |   | 2009         |   |
| Raw material   |   | $             | 57     |   |         | $      | 63 |   |
| Finished goods |   |          | 177    |   |         |   | 159 |   |
|           |   | $             | 234    |   |         | $      | 222 |   |

----

| September 30, 2010                                         |   | SupplementalNon-CashDisclosure |   |
|------------------------------------------------------------|--------|--------------------------------|--------|
| Professional fees                                          |   | $                              | 528    |   |
| Settlements                                                |   |                           | 81     |   |
| Salary and compensation                                    |   |                           | 525    |   |
| Interest and other services rendered                       |   |                           | 326    |   |
| Total for services, interest, liabilities and compensation |   | $                              | 1,460  |   |
|                                                       |   |                           |   |   |
| Notes payable                                              |   | $                              | 1,789  |   |

----

----

|                                                          |   | 2010   |       |
|---------------------------------------------------------------|--------|--------|------------|
|                                                          |   | Plan   |       |
| Shares initially reserved                                     |   |   | 25,000,000 |   |
|                                                          |   |   |       |   |
| Shares issued during 2010                                     |   |   | 7,821,283  |   |
|                                                          |   |   |       |   |
| Remaining shares available to be issued at September 30, 2010 |   |   | 17,178,717 |   |
|                                                          |   |   |       |   |
| Shares issued and outstanding as of September 30, 2010        |   |   | 7,821,283  |   |

|                              |   | Shares |    |   | Weighted-Average Exercise Price |   |
|-----------------------------------|--------|--------|---------|--------|---------------------------------|--------|
| Outstanding at beginning of year  |   |   | 125,000 |   |                            | $      | 0.43 |   |
| Granted                           |   |   | 200,000 |   |                            |   | 0.17 |   |
| Exercised                         |   |   | -       |   |                            |   | - |   |
| Forfeited/cancelled               |   |   | -       |   |                            |   | - |   |
|                              |   |   |    |   |                            |   |   |   |
| Outstanding at the end of period  |   |   | 325,000 |   |                            | $      | 0.27 |   |
|                              |   |   |    |   |                            |   |   |   |
| Exercisable at September 30, 2010 |   |   | 325,000 |   |                            | $      | 0.27 |   |

|                    |   | 3/31/2010 |   |
|-------------------------|--------|-----------|--------|
| Assumptions             |   | Options   |   |
| Dividend yield          |   | 0.00%     |   |
| Risk-free rate for term |   | 0.20%     |   |
| Volatility              |   | 84.00%    |   |
| Expected life           |   | 5.0       |   |

|           |   |   |        |    |   | Remaining Weighted  |   |   |        |   |   | Remaining Weighted |   |
|----------------|--------|--------|-------------|---------|--------|---------------------|--------|--------|-------------|--------|--------|--------------------|--------|
| Class          |   |   | Number      |    |   | Average Contractual |   |   | Number      |   |   | Average Exercise   |   |
| Exercise Price |   |   | Outstanding |    |   | Life in Years       |   |   | Exercisable |   |   | Price              |   |
|           |   |   |        |    |   |                |   |   |        |   |   |               |   |
| $0.17          |   |   |        | 200,000 |   |                |   | 4.50   |        |   |   | 200,000            |   |   | $0.17 |   |
| $0.43          |   |   |        | 125,000 |   |                |   | 2.83   |        |   |   | 125,000            |   |   | $0.43 |   |
|           |   |   |        |    |   |                |   |   |        |   |   |               |   |   |   |   |
|           |   |   |        | 325,000 |   |                |   | 3.67   |        |   |   | 325,000            |   |   | $0.27 |   |

----

|                                                          |   | For the nine months ended September 30, 2010 |   |
|---------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                          |   | Net loss                                     |   |   | Shares |   |   | Per-Share |   |
|                                                          |   | (Numerator)                                  |   |   | (Denominator) |   |   | Amount |   |
| Basic EPS:                                                    |   |                                         |   |   |   |   |   |   |   |
| Loss available to common stockholders                         |   | $                                            | (6,230 | ) |   |   | 193,890 |   |   | $ | (0.03 | ) |
| Effect of dilutive securities                                 |   |                                         | -      |   |   |   | - |   |   |   | - |   |
| Diluted EPS:                                                  |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Loss available to common stockholders and assumed conversions |   | $                                            | (6,230 | ) |   |   | 193,890 |   |   | $ | (0.03 | ) |
|                                                          |   |                                         |   |   |   |   |   |   |   |   |   |   |
|                                                          |   |                                         |   |   |   |   |   |   |   |   |   |   |
|                                                          |   | For the nine months ended September 30, 2009 |   |
|                                                          |   | Net loss(Numerator)                          |   |   | Shares(Denominator) |   |   | Per-ShareAmount |   |
| Basic EPS:                                                    |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Loss available to common stockholders                         |   | $                                            | (6,981 | ) |   |   | 116,908 |   |   | $ | (0.06 | ) |
| Effect of dilutive securities                                 |   |                                         | -      |   |   |   | - |   |   |   | - |   |
| Diluted EPS:                                                  |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Loss available to common stockholders                         |   | $                                            | (6,981 | ) |   |   | 116,908 |   |   | $ | (0.06 | ) |

|                                                          |   | For the three months ended September 30, 2010 |   |
|---------------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                          |   | Income(Numerator)                             |   |   | Shares (Denominator) |   |   | Per-Share Amount |   |
| Basic EPS:                                                    |   |                                          |   |   |   |   |   |   |   |
| Loss available to common stockholders                         |   | $                                             | (2,296 | ) |   |   | 247,065 |   |   | $ | (0.01 | ) |
| Effect of dilutive securities                                 |   |                                          | -      |   |   |   |   |   |   |   | - |   |
| Diluted EPS:                                                  |   |                                          |   |   |   |   |   |   |   |   |   |   |
| Loss available to common stockholders and assumed conversions |   | $                                             | (2,296 | ) |   |   | 247,065 |   |   | $ | (0.01 | ) |
|                                                          |   |                                          |   |   |   |   |   |   |   |   |   |   |
|                                                          |   |                                          |   |   |   |   |   |   |   |   |   |   |
|                                                          |   | For the three months ended September 30, 2009 |   |
|                                                          |   | Income(Numerator)                             |   |   | Shares(Denominator) |   |   | Per-ShareAmount |   |
| Basic EPS:                                                    |   |                                          |   |   |   |   |   |   |   |   |   |   |
| Loss available to common stockholders                         |   | $                                             | (2,523 | ) |   |   | 130,312 |   |   | $ | (0.02 | ) |
| Effect of dilutive securities                                 |   |                                          | -      |   |   |   |   |   |   |   | - |   |
| Diluted EPS:                                                  |   |                                          |   |   |   |   |   |   |   |   |   |   |
| Loss available to common stockholders and assumed conversions |   | $                                             | (2,523 | ) |   |   | 130,312 |   |   | $ | (0.02 | ) |

----

|                      | Terms                                         |   | Maturity Date |   | Interest Rate |   |   | Net Balance |   |
|---------------------------|-----------------------------------------------|--------|---------------|--------|---------------|--------|--------|-------------|--------|
| Bancleasing, Inc.         | $10,660 / Month including interest            |   | October-14    |   |          | 11.62  | %      |        | $      | 434 |   |
| Agility Capital Lease     | $70,456 / Month including interest            |   | Various       |   |          | 18.82  | %      |        |   | 531 |   |
| De Lage Landen Lease      | $691 / Month including interest               |   | April-11      |   |          | 19.12  | %      |        |   | 5 |   |
| Toyota                    | $517 / Month including interest               |   | December-10   |   |          | 8.01   | %      |        |   | 3 |   |
| Robert McClung, Momentum  | $23,476 / Quarterly including interest        |   | October-10    |   |          | 7.50   | %      |        |   | 23 |   |
| Shane Griffths, Crosswind | $13,911 / Quarterly including interest        |   | December-10   |   |          | 7.50   | %      |        |   | 29 |   |
| Centramedia               | $56,342 / Quarterly including interest        |   | December-11   |   |          | 7.50   | %      |        |   | 316 |   |
| Frontier Internet LLC     | $33,846 / Quarterly including interest        |   | May-12        |   |          | 6.00   | %      |        |   | 223 |   |
| Ronnie D Franklin         | $6,054 / Quarterly including interest         |   | May-12        |   |          | 6.00   | %      |        |   | 40 |   |
| Bridge Financing          |  1 year                                  |   | Demand        |   |          | 10.00  | %      |        |   | 475 |   |
| Line of credit            |  3 years/ Quarterly interest (See below) |   | December-13   |   |          | 12.00  | %      |        |   | 5,776 |   |
| Total debt                |                                          |   |          |   |          |   |   |        |   | 7,855 |   |
| Less current maturities   |                                          |   |          |   |          |   |   |        |   | (1,482 | ) |
| Long-term debt            |                                          |   |          |   |          |   |   |        | $      | 6,373 |   |

| Description                               |   | Bridge Note |   |   | Warrant Liabilities |   |   | Total  |   |
|-------------------------------------------|--------|-------------|--------|--------|---------------------|--------|--------|--------|--------|
|                                      |   |        |   |   |                |   |   |   |   |
| Fair value at December 31, 2009           |   | $           | 1,273  |   |                | $      | 268    |   |   | $ | 1,541 |   |
| 01-01-10 to 03-31-10 change in fair value |   |        | 77     |   |                |   | (134   | )      |   |   | (57 | ) |
| 04-01-10 to 06-30-10 change in fair value |   |        | 23     |   |                |   | (85    | )      |   |   | (62 | ) |
| 07-01-10 to 09-30-10 change in fair value |   |        | 17     |   |                |   | (7     | )      |   |   | 10 |   |
| Conversions during period                 |   |        | (915   | )      |                |   | -      |   |   |   | (915 | ) |
| Fair value at September 30, 2010          |   | $           | 475    |   |                | $      | 42     |   |   | $ | 517 |   |

----

| Description                               |   | Convertible Note |   |   | Compound Derivative Liability |   |   | Total  |   |
|-------------------------------------------|--------|------------------|--------|--------|-------------------------------|--------|--------|--------|--------|
|                                      |   |             |   |   |                          |   |   |   |   |
| Fair value issuance at inception          |   | $                | 355    |   |                          | $      | 250    |   |   | $ | 605 |   |
| 03-19-10 to 03-31-10 change in fair value |   |             | 33     |   |                          |   | (62    | )      |   |   | (29 | ) |
| 04-01-10 to 06-30-10 change in fair value |   |             | 120    |   |                          |   | (154   | )      |   |   | (34 | ) |
| 07-01-10 to 09-30-10 change in fair value |   |             | 97     |   |                          |   | (34    | )      |   |   | 63 |   |
| Conversions during period                 |   |             | (605   | )      |                          |   | -      |   |   |   | (605 | ) |
| Fair value at September 30, 2010          |   | $                | -      |   |                          | $      | -      |   |   | $ | - |   |

| Year Ending  December 31,             |   |   |   |
|-------------------------------------------------|--------|--------|--------|
| 2010                                            |   | $      | 214    |   |
| 2011                                            |   |   | 524    |   |
| 2012                                            |   |   | 141    |   |
| 2013                                            |   |   | 128    |   |
| 2014                                            |   |   | 128    |   |
| Thereafter                                      |   |   | 11     |   |
| Total minimum lease payments                    |   |   | 1,146  |   |
| Less amount representing interest               |   |   | (177   | ) |
| Present value of net minimum lease payments     |   |   | 969    |   |
| Current maturities of capital lease obligations |   |   | (543   | ) |
| Long-term portion of capital lease obligations  |   | $      | 426    |   |

----

| Period Ending December 31, |   | Amount |   |
|----------------------------|--------|--------|--------|
| 2010                       |   | $      | 148    |   |
| 2011                       |   |   | 424    |   |
| 2012                       |   |   | 71     |   |
| 2013                       |   |   | 25     |   |
| 2014                       |   |   | 12     |   |
| Thereafter                 |   |   | 25     |   |
| Total                      |   | $      | 705    |   |

----

| Three Months Ended September 30, 2010 |   | WMS    |   |   | WBS    |   |   | EBI    |   |   | ENS   |   |   | Total  |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-------|--------|--------|--------|--------|
| Revenue                               |   | $      | 16     |   |   | $      | 1,119  |   |   | $      | 251   |   |   | $      | 50     |   |   | $ | 1,436 |   |
| Segment loss                          |   |   | (45    | )      |   |   | (365   | )      |   |   | (105  | )      |   |   | (133   | ) |   |   | (648 | ) |
| Segment assets                        |   |   | 25     |   |   |   | 4,398  |   |   |   | 1,066 |   |   |   | 1,428  |   |   |   | 6,917 |   |
| Capital expenditures                  |   |   | -      |   |   |   | 141    |   |   |   | 24    |   |   |   | -      |   |   |   | 165 |   |
| Depreciation and amortization         |   |   | 4      |   |   |   | 637    |   |   |   | 60    |   |   |   | 54     |   |   |   | 755 |   |

| Three Months Ended September 30, 2009 |   | WMS    |   |   | WBS    |   |   | EBI    |   |   | ENS |   |   | Total  |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----|--------|--------|--------|--------|
| Revenue                               |   | $      | 45     |   |   | $      | 1,290  |   |   | $      | 114 |   |   | $      | 55     |   |   | $ | 1,504 |   |
| Segment (loss) income                 |   |   | (30    | )      |   |   | (655   | )      |   |   | 40  |   |   |   | (263   | ) |   |   | (908 | ) |
| Segment assets                        |   |   | -      |   |   |   | 6,980  |   |   |   | 284 |   |   |   | 1,797  |   |   |   | 9,061 |   |
| Capital expenditures                  |   |   | -      |   |   |   | 153    |   |   |   | -   |   |   |   | 79     |   |   |   | 232 |   |
| Depreciation and amortization         |   |   | 4      |   |   |   | 666    |   |   |   | 16  |   |   |   | 4      |   |   |   | 690 |   |

|                                           |   |  Three Months Ended |   |   | Three Months Ended |   |
|------------------------------------------------|--------|--------------------------|--------|--------|--------------------|--------|
| Reconciliation of Segment Loss from Operations |   | September 30, 2010       |   |   | September 30, 2009 |   |
| Total segment loss from operations             |   | $                        | (648   | )      |               | $      | (908 | ) |
| Total corporate overhead                       |   |                     | (1,254 | )      |               |   | (1,224 | ) |
| Consolidated loss from operations              |   | $                        | (1,902 | )      |               | $      | (2,132 | ) |

| Nine Months Ended September 30, 2010 |   | WMS    |   |   | WBS    |   |   | EBI    |   |   | ENS   |   |   | Total  |   |
|--------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-------|--------|--------|--------|--------|
| Revenue                              |   | $      | 100    |   |   | $      | 3,525  |   |   | $      | 629   |   |   | $      | 238    |   |   | $ | 4,492 |   |
| Segment loss                         |   |   | (85    | )      |   |   | (1,345 | )      |   |   | (262  | )      |   |   | (377   | ) |   |   | (2,069 | ) |
| Segment assets                       |   |   | 25     |   |   |   | 4,398  |   |   |   | 1,066 |   |   |   | 1,428  |   |   |   | 6,917 |   |
| Capital expenditures                 |   |   | -      |   |   |   | 316    |   |   |   | 350   |   |   |   | -      |   |   |   | 666 |   |
| Depreciation and amortization        |   |   | 11     |   |   |   | 1,959  |   |   |   | 122   |   |   |   | 165    |   |   |   | 2,257 |   |

| Nine Months Ended September 30, 2009 |   | WMS    |   |   | WBS    |   |   | EBI    |   |   | ENS |   |   | Total  |   |
|--------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----|--------|--------|--------|--------|
| Revenue                              |   | $      | 136    |   |   | $      | 3,537  |   |   | $      | 134 |   |   | $      | 298    |   |   | $ | 4,105 |   |
| Segment loss                         |   |   | (100   | )      |   |   | (1,962 | )      |   |   | (40 | )      |   |   | (642   | ) |   |   | (2,744 | ) |
| Segment assets                       |   |   | -      |   |   |   | 6,980  |   |   |   | 284 |   |   |   | 1,797  |   |   |   | 9,061 |   |
| Capital expenditures                 |   |   | -      |   |   |   | 767    |   |   |   | -   |   |   |   | 233    |   |   |   | 1,000 |   |
| Depreciation and amortization        |   |   | 11     |   |   |   | 1,874  |   |   |   | 36  |   |   |   | 11     |   |   |   | 1,932 |   |

----

|                                           |   | Nine Months Ended  |   |   | Nine Months Ended  |   |
|------------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|
| Reconciliation of Segment Loss from Operations |   | September 30, 2010 |   |   | September 30, 2009 |   |
| Total segment loss from operations             |   | $                  | (2,069 | )      |               | $      | (2,744 | ) |
| Total corporate overhead                       |   |               | (3,284 | )      |               |   | (3,353 | ) |
| Consolidated loss from operations              |   | $                  | (5,353 | )      |               | $      | (6,097 | ) |

| Reconciliation of Segment Assets to Total Assets |   | September 30, 2010 |   |   | December 31, 2009 |   |
|--------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
| Total segment assets                             |   | $                  | 6,917  |   |              | $      | 8,745 |   |
| Total corporate assets                           |   |               | 194    |   |              |   | 372 |   |
| Consolidated  assets                   |   | $                  | 7,111  |   |              | $      | 9,117 |   |

----

|   | ● | The Company announced that it ranked number 137 on Deloitte’s 2010 Technology Fast 500TM, an annual ranking Deloitte LLP of the 500 fastest growing technology, media, telecommunications, life sciences and clean technology companies in North America.  Rankings were based on percentage of fiscal year revenue growth during the five-year period from 2005-2009.  ERF grew by 760 during this period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | ● | The Company announced that the growth of Energy Broadband, its wholly owned subsidiary, continues to support the commitment that ERF Wireless has made to become the dominant provider of terrestrial wireless broadband communications to the North American oil and gas industry. The ERF Wireless acquisition and contracting activities over the past several years has already established ERF Wireless as the owner of the largest wireless broadband network connectivity covering most major oil and gas regions in North America. Energy Broadband is now continuing our thrust to become this market's leader. So far In 2010, we have seen our oil, gas, and energy business grow from a smaller portion of our overall revenue base to a significant portion of our overall revenue and all indications are that it will grow to dominate the overall ERF Wireless business plan as we continue our existing contracts, sign new contracts, and expand our geographical footprint into new markets.                                                                                                                                                                                                                                                                                                                                           |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | ● | The Company announced that Energy Broadband continues expansion of its energy industry business base with new contracts to provide communications service, equipment, and infrastructure to a number of oil, gas, and related energy sector companies throughout North America and has been providing wireless broadband connectivity to numerous oil, gas, and energy companies in this same area since 2008. These service offerings have been especially concentrated throughout western Texas for the past two years and more recently some of Energy Broadband's larger customers have been expanding their holdings in this area. These events have contributed to the decision by Energy Broadband to open a new office in Midland before the end of 2010. This office will provide both additional sales as well as technical support personnel to this area of Texas. Energy Broadband and ERF Wireless already have service personnel stationed in four other regions of western and northwestern Texas and operate extensive wireless broadband networks as well as a bank network in the region. ERF Wireless has been developing "brand awareness" for its Energy Broadband subsidiary for the past year and, although reported on public filings under ERF Wireless, it operates this segment of its business as a wholly owned subsidiary. |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | ● | The Company participated in the Developing Unconventional Gas (DUC) Eagle Ford Conference & Exhibition show held in early October 2010 in San Antonio, Texas.  The exhibition was sponsored by Hart Energy Publishing and showcased some of the latest technologies that are being applied to successfully develop unconventional gas plays. Based on early results, the Eagle Ford Shale in South Texas may turn out to be the most economic high-return shale play in the U.S. and activity is increasing rapidly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | ● | The Company announced that the company's patent attorney recently received correspondence from the U.S. Patent Office that one of the patents the company had previously applied for in connection with its CryptoVue(R) encrypted security device has been approved and that a patent will be issued as soon as the proper forms are submitted. The company also noted that other CryptoVue patent applications that cover different functions are still under review.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

----

|                   |   | Three Months Ended September 30, |   |   | Nine Months Ended September 30, |   |
|------------------------|--------|----------------------------------|--------|--------|---------------------------------|--------|
| ($ in thousands)       |   | 2010                             |   |   | 2009                            |   |   | $ Change |   |   | % Change |   |   | 2010 |   |   | 2009 |   |   | $ Change |   |   | % Change |   |
| Total sales            |   | $                                | 1,436  |   |                            | $      | 1,504 |   |   | $ | (68 | ) |   |   | -5 | % |   | $ | 4,492 |   |   | $ | 4,105 |   |   | $ | 387 |   |   |   | 9 | % |
| Cost of goods sold     |   |                             | 968    |   |                            |   | 835 |   |   |   | 133 |   |   |   | 16 | % |   |   | 2,987 |   |   |   | 2,340 |   |   |   | 647 |   |   |   | 28 | % |
| Gross profit           |   |                             | 468    |   |                            |   | 669 |   |   |   | (201 | ) |   |   | -30 | % |   |   | 1,505 |   |   |   | 1,765 |   |   |   | (260 | ) |   |   | -15 | % |
| Percent of total sales |   |                             | 33     | %      |                            |   | 44 | % |   |   |   |   |   |   |   |   |   |   | 34 | % |   |   | 43 | % |   |   |   |   |   |   |   |   |
| Operating expenses     |   |                             | 2,370  |   |                            |   | 2,801 |   |   |   | (431 | ) |   |   | -15 | % |   |   | 6,858 |   |   |   | 7,862 |   |   |   | (1,004 | ) |   |   | -13 | % |
| Loss from operations   |   |                             | (1,902 | )      |                            |   | (2,132 | ) |   |   | 230 |   |   |   | -11 | % |   |   | (5,353 | ) |   |   | (6,097 | ) |   |   | 744 |   |   |   | -12 | % |
| Other income/(expense) |   |                             | (394   | )      |                            |   | (391 | ) |   |   | (3 | ) |   |   | 1 | % |   |   | (877 | ) |   |   | (884 | ) |   |   | 7 |   |   |   | -1 | % |
| Net loss               |   | $                                | (2,296 | )      |                            | $      | (2,523 | ) |   | $ | 227 |   |   |   | -9 | % |   | $ | (6,230 | ) |   | $ | (6,981 | ) |   | $ | 751 |   |   |   | -11 | % |

----

| ($ in thousands)            |   | Three Months Ended September 30, |   |
|-----------------------------|--------|----------------------------------|--------|
| Business Segment            |   | 2010                             |   |   | % of Total |   |   | 2009 |   |   | % of Total |   |   | $ Change |   |   | % Change |   |
| Wireless Messaging Services |   | $                                | 16     |   |   |   | 1 | % |   | $ | 45 |   |   |   | 3 | % |   | $ | (29 | ) |   |   | -64 | % |
| Wireless Bundled Services   |   |                             | 1,119  |   |   |   | 78 | % |   |   | 1,290 |   |   |   | 86 | % |   |   | (171 | ) |   |   | -13 | % |
| Enterprise Network Services |   |                             | 50     |   |   |   | 3 | % |   |   | 55 |   |   |   | 3 | % |   |   | (5 | ) |   |   | -9 | % |
| Energy Broadband, Inc.      |   |                             | 251    |   |   |   | 18 | % |   |   | 114 |   |   |   | 8 | % |   |   | 137 |   |   |   | 120 | % |
| Total Sales                 |   | $                                | 1,436  |   |   |   | 100 | % |   | $ | 1,504 |   |   |   | 100 | % |   | $ | (68 | ) |   |   | -5 | % |

| ($ in thousands)            |   | Nine Months Ended September 30, |   |
|-----------------------------|--------|---------------------------------|--------|
| Business Segment            |   | 2010                            |   |   | % of Total |   |   | 2009 |   |   | % of Total |   |   | $ Change |   |   | % Change |   |
| Wireless Messaging Services |   | $                               | 100    |   |   |   | 2 | % |   | $ | 136 |   |   |   | 4 | % |   | $ | (36 | ) |   |   | -26 | % |
| Wireless Bundled Services   |   |                            | 3,525  |   |   |   | 79 | % |   |   | 3,537 |   |   |   | 86 | % |   |   | (12 | ) |   |   | 0 | % |
| Enterprise Network Services |   |                            | 238    |   |   |   | 5 | % |   |   | 298 |   |   |   | 7 | % |   |   | (60 | ) |   |   | -20 | % |
| Energy Broadband, Inc.      |   |                            | 629    |   |   |   | 14 | % |   |   | 134 |   |   |   | 3 | % |   |   | 495 |   |   |   | 369 | % |
| Total Sales                 |   | $                               | 4,492  |   |   |   | 100 | % |   | $ | 4,105 |   |   |   | 100 | % |   | $ | 387 |   |   |   | 9 | % |

----

| ($ in thousands)            |   | Three Months Ended September 30, |   |
|-----------------------------|--------|----------------------------------|--------|
| Business Segment            |   | 2010                             |   |   | % of Total |   |   | 2009 |   |   | % of Total |   |   | $ Change |   |   | % Change |   |
| Wireless Messaging Services |   | $                                | 21     |   |   |   | 2 | % |   | $ | 40 |   |   |   | 5 | % |   | $ | (19 | ) |   |   | -48 | % |
| Wireless Bundled Services   |   |                             | 671    |   |   |   | 70 | % |   |   | 737 |   |   |   | 88 | % |   |   | (66 | ) |   |   | -9 | % |
| Enterprise Network Services |   |                             | 81     |   |   |   | 8 | % |   |   | 52 |   |   |   | 6 | % |   |   | 29 |   |   |   | 56 | % |
| Energy Broadband, Inc.      |   |                             | 195    |   |   |   | 20 | % |   |   | 6 |   |   |   | 1 | % |   |   | 189 |   |   |   | 3150 | % |
| Total cost of sales         |   | $                                | 968    |   |   |   | 100 | % |   | $ | 835 |   |   |   | 100 | % |   | $ | 133 |   |   |   | 16 | % |

|                             |   | Three Months EndedSeptember 30, |   |   |   |   |   |     |   |
|----------------------------------|--------|---------------------------------|--------|--------|--------|--------|--------|----------|--------|
| ($ in thousands)                 |   | 2010                            |   |   | 2009   |   |   | $ Change |   |   | % Change |   |
|                             |   |                            |   |   |   |   |   |     |   |   |   |   |
| Products and integration service |   | $                               | 325    |   |   | $      | 378    |     |   | $ | (53 | ) |   |   | -14 | % |
| Rent and maintenance             |   |                            | 127    |   |   |   | 124    |     |   |   | 3 |   |   |   | 2 | % |
| Depreciation                     |   |                            | 516    |   |   |   | 333    |     |   |   | 183 |   |   |   | 55 | % |
| Total cost of sales              |   | $                               | 968    |   |   | $      | 835    |     |   | $ | 133 |   |   |   | 16 | % |

| ($ in thousands)            |   | Nine Months Ended September 30, |   |
|-----------------------------|--------|---------------------------------|--------|
| Business Segment            |   | 2010                            |   |   | % of Total |   |   | 2009 |   |   | % of Total |   |   | $ Change |   |   | % Change |   |
| Wireless Messaging Services |   | $                               | 57     |   |   |   | 2 | % |   | $ | 139 |   |   |   | 6 | % |   | $ | (82 | ) |   |   | -59 | % |
| Wireless Bundled Services   |   |                            | 2,239  |   |   |   | 75 | % |   |   | 1,949 |   |   |   | 83 | % |   |   | 290 |   |   |   | 15 | % |
| Enterprise Network Services |   |                            | 319    |   |   |   | 11 | % |   |   | 216 |   |   |   | 9 | % |   |   | 103 |   |   |   | 48 | % |
| Energy Broadband, Inc.      |   |                            | 372    |   |   |   | 12 | % |   |   | 36 |   |   |   | 2 | % |   |   | 336 |   |   |   | 933 | % |
| Total Cost of Goods         |   | $                               | 2,987  |   |   |   | 100 | % |   | $ | 2,340 |   |   |   | 100 | % |   | $ | 647 |   |   |   | 28 | % |

|                             |   | Nine Months EndedSeptember 30, |   |   |   |   |   |     |   |
|----------------------------------|--------|--------------------------------|--------|--------|--------|--------|--------|----------|--------|
| ($ in thousands)                 |   | 2010                           |   |   | 2009   |   |   | $ Change |   |   | % Change |   |
|                             |   |                           |   |   |   |   |   |     |   |   |   |   |
| Products and integration service |   | $                              | 1,076  |   |   | $      | 1,116  |     |   | $ | (40 | ) |   |   | -4 | % |
| Rent and maintenance             |   |                           | 396    |   |   |   | 330    |     |   |   | 66 |   |   |   | 20 | % |
| Depreciation                     |   |                           | 1,515  |   |   |   | 894    |     |   |   | 621 |   |   |   | 69 | % |
| Total Operating Expenses         |   | $                              | 2,987  |   |   | $      | 2,340  |     |   | $ | 647 |   |   |   | 28 | % |

----

|                             |   | Three Months Ended September 30, |   |   | Nine Months Ended September 30, |   |
|----------------------------------|--------|----------------------------------|--------|--------|---------------------------------|--------|
| ($ in thousands)                 |   | 2010                             |   |   | 2009                            |   |   | $ Change |   |   | % Change |   |   | 2010 |   |   | 2009 |   |   | $ Change |   |   | % Change |   |
|                             |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Employment expenses              |   | $                                | 1,048  |   |                            | $      | 1,332 |   |   | $ | (284 | ) |   |   | -21 | % |   | $ | 3,344 |   |   | $ | 3,664 |   |   | $ | (320 | ) |   |   | -9 | % |
| Professional services            |   |                             | 672    |   |                            |   | 538 |   |   |   | 134 |   |   |   | 25 | % |   |   | 1,383 |   |   |   | 1,493 |   |   |   | (110 | ) |   |   | -7 | % |
| Rent and maintenance             |   |                             | 100    |   |                            |   | 111 |   |   |   | (11 | ) |   |   | -10 | % |   |   | 309 |   |   |   | 335 |   |   |   | (26 | ) |   |   | -8 | % |
| Depreciation and amortization    |   |                             | 262    |   |                            |   | 379 |   |   |   | (117 | ) |   |   | -31 | % |   |   | 810 |   |   |   | 1,101 |   |   |   | (291 | ) |   |   | -26 | % |
| Other general and administrative |   |                             | 288    |   |                            |   | 441 |   |   |   | (153 | ) |   |   | -35 | % |   |   | 1,012 |   |   |   | 1,269 |   |   |   | (257 | ) |   |   | -20 | % |
| Total operating expenses         |   | $                                | 2,370  |   |                            | $      | 2,801 |   |   | $ | (431 | ) |   |   | -15 | % |   | $ | 6,858 |   |   | $ | 7,862 |   |   | $ | (1,004 | ) |   |   | -13 | % |

|   | ● | A $284,000 decrease in employment expense. The decrease is primarily attributable to the centralization of our operations; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                       |
|   | ● | A $134,000 increase in professional services.                                                                              |
|   |    |                                                                                                                       |
|   | ● | A $117,000 decrease in depreciation and amortization; and                                                                  |
|   |    |                                                                                                                       |
|   | ● | A $153,000 decrease in other general and administrative expense.                                                           |

|   | ● | A $320,000 decrease in employment expense. The decrease is primarily attributable to the centralization of our operations;                                            |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                  |
|   | ● | A $110,000 decrease in professional services. The decrease is primarily related to a reduction of outside consultants for investor relations and accounting expenses; |
|   |    |                                                                                                                                                                  |
|   | ● | A $291,000 decrease in depreciation and amortization; and                                                                                                             |
|   |    |                                                                                                                                                                  |
|   | ● | A $257,000 decrease in other general and administrative expense.                                                                                                      |

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|   | ● | 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; |

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| Exhibit 31 | Certification of Chief Executive officer and 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 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                | ERF Wireless, Inc. |                    |
|-------------------------------------|--------------------|-------------------------|
|                                |               |                    |   |
| Date:   November 22, 2010 | By:                | /s/ H. Dean Cubley |   |
|                                |               | H. Dean Cubley          |   |
|                                |               | Chief Executive Officer |   |
|                                |               |                    |   |

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