My response from the CEO last week:
Thank you for your interest in ERF Wireless, Inc. As you are likely already aware ERF Wireless, Inc. is a small wireless based business with its headquarters in League City, Texas and has approximately forty employees serving oil and gas customers primarily in Texas, Louisiana, New Mexico, and Oklahoma. We have had in excess of $7M in revenue the past two years so it is safe to say that we are a real operating company and not a “shell” company as some of our distractors are fond of saying. Our stock has seen constant downward pressure for the past year or more due to a small number of convertible debentures that the company has from earlier periods when we needed to raise approximately $1.5M in extra cash to pay the expenses of a contract arbitration with a very large company(SLB) that we had contracted with in 2009. I take full responsibility for making the decision to borrow the money in an attempt to complete the arbitration and receive a significant award. Unfortunately the outcome of the arbitration was that neither side take anything so we were left owing the borrowed funds and have been able to repay a portion but not all of the convertibles to date. The downward pressure will likely continue until we complete the repayment of all of the convertibles by either cash payments or their conversion to stock. Both of these have been happening over the past weeks and months.
As far as the management decisions I take full responsibility. However, you mention the perceived “price manipulation” and I fully reject that any such manipulation exists on the part of myself, the company, or anyone associated with the company. I buy some stock personally to show my support of the company but do so directly from the company to remove the potential that my purchases could be construed as influencing the open market. No one in my family other than myself , to the best of my knowledge, even owns any of the ERF Wireless common stock. I hold the voting proxy to most of the preferred stock in ERF Wireless but do not own any myself and the preferred stock does not trade in the marketplace. If there is any manipulation of the ERF Wireless stock then in my opinion it is coming from outside sources and neither the company or anyone associated with the company has any control or visibility into its source. I would guess that any such concerns will quickly disappear with the complete elimination of the downward pressure on the stock.
My plans for the near-term future of the company are to attempt to continue to optimize our operational business model to both grow the business and improve our margins while also seeking to take advantage of new opportunities that we see in our oil and gas marketplace. At the same time, we will continue to attempt to eliminate the artificial downward pressure that the convertibles present as available funding allows. I cannot guarantee a specific timeline for these events, as many shareholders would like, but can guarantee that these objectives will remain our major focus.
If you have additional questions I will be glad to answer to the extent that SEC Selective Disclosure Rules permit. Everything I have told you here is already in the public realm from previous filings.
Dr. H. Dean Cubley
CEO, ERF Wireless, Inc.
AI
