Frequently Asked Questions

Question: Why is ERF Wireless still acquiring wireless broadband businesses in addition to building its own wireless networks?

Answer: Although ERF Wireless is continuing to construct a portion of its existing footprint in selected regions, in many cases it’s more economical and time-efficient to acquire large blocks of wireless broadband coverage than to construct a similar footprint. In addition, the acquisitions eliminate potential competitors in the geographical areas where they are acquired.

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Question: Where will ERF Wireless find wireless broadband companies to acquire?

Answer: ERF Wireless continues to compile a database of wireless broadband companies and their demographics that are strategic to the ERF Wireless strategic plan of providing “critical communications infrastructure communications” services to the enterprise rural broadband vertical market sector of North America. This database continues to be refined and is the basis for selecting specific acquisition targets.

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Question: Why would a potential acquisition target have an interest in selling its company to ERF Wireless?

Answer: Most wireless broadband networks are privately funded and have a few hundred or, at most, a few thousand customers. Most of these companies have not grown to the size where the economies of scale are possible for all of their overhead functions and, therefore, still require some cash infusion by their investors. These investors are locked into their investment and have no near-term path to liquidity without selling to ERF Wireless or someone doing a similar rollup. By combining a number of these networks and utilizing the network infrastructure to serve a number of vertical market enterprise customers in the same area, ERF Wireless can reach the economies of scale that produce positive cash flow and profitability. In this case, one plus one can actually equal three.

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Question: Since ERF Wireless has its corporate headquarters located near Houston, Texas, will the acquisition strategy initially focus on the southern United States?

Answer: Not necessarily, although many of the broadband networks in the southern U.S. are more familiar to ERF Wireless and offer excellent acquisition opportunities. As of January 2012, ERF Wireless has acquired sixteen companies and now has the largest terrestrial broadband wireless network covering oil and gas territories in North America.

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Question: What wireless broadband technology does ERF Wireless primarily utilize in its national wireless broadband footprint?

Answer: ERF Wireless utilizes a combination of high-capacity, point-to-point, proprietary wireless technology, plus industry standard, point-to-multipoint technology, including Wi-Fi, WiMax and Meshing Technology. Both licensed and un-licensed technology is utilized throughout the networks.

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Question: How is ERF Wireless currently financed?

Answer: ERF Wireless currently has as customers a large number of major oil and gas and energy companies, financial institutions, healthcare facilities, educational institutions, as well as almost 3,000 wireless commercial and residential customers throughout Texas, New Mexico, Arkansas, Oklahoma, Colorado, Wyoming, North Dakota and Louisiana. These recurring-revenue customers provide much of the operating overhead cash flow needed by ERF Wireless. Additional operational and growth cash needs are also provided by private investment from various individuals, institutional investors and other entities.

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Question: Will ERF Wireless do an IPO in the future?

Answer: ERF Wireless cannot do an IPO in the future since it is already a fully reporting public company. However, ERF Wireless does plan to move from trading on the NASDAQ Bulletin Board Exchange to a larger national exchange, such as the NASDAQ Small Cap Exchange or the American Stock Exchange, as soon as it achieves all of the listing requirements.

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Question: Does ERF Wireless utilize public or private financing to fund its acquisition and growth campaigns?

Answer: ERF Wireless is utilizing public financing. In addition, ERF Wireless is receiving private financing from high-net-worth individuals who recognize the potential from an investment in ERF Wireless before the acquisition and growth activity is fully reflected in the ERF Wireless stock pricing.

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Question: When ERF Wireless issues stock in a Private Placement to raise capital, will the stock that is issued be immediately tradable?

Answer: No. Any new public stock issued as part of a Private Placement must first be issued as SEC Rule 144 restricted stock. It will then either be registered by the company or the holder may sell under Rule 144 after holding the stock for six months.

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The information contained herein is believed to be accurate and is based upon sources which are considered reliable but are not guaranteed by the company. This information is subject to change without notice and the company assumes no responsibility for the information contained herein. This does not represent an offer to buy or sell any security. This profile is protected by applicable copyright laws. No permission is granted to copy, distribute, modify, or post any text, graphics, design or logos.

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