Document_And_Entity_Informatio
Document And Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 18, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'ERF Wireless, Inc. | ' |
Entity Central Index Key | '0001020646 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'Yes | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 8,176,523 |
Document Fiscal Period Focus | 'Q2 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONSOLIDATED_BALANCE_SHEETS_Un
CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $190 | $42 |
Accounts receivable, net | 361 | 1,001 |
Accounts receivable, other | 409 | 489 |
Inventories | 262 | 264 |
Prepaid expenses and other current assets | 179 | 286 |
Total current assets | 1,401 | 2,082 |
Property and equipment | ' | ' |
Property and equipment | 12,200 | 12,142 |
Less: accumulated depreciation | -10,225 | -9,365 |
Net property and equipment | 1,975 | 2,777 |
Goodwill | 176 | 176 |
Other assets | 43 | 37 |
Total assets | 3,595 | 5,072 |
Current liabilities: | ' | ' |
Notes payable and current portion of long-term debt | 3,782 | 3,183 |
Current portion of long-term capital leases | 193 | 252 |
Accounts payable | 1,058 | 1,299 |
Accrued expenses | 1,254 | 1,158 |
Derivative liabilities | 315 | 677 |
Deferred revenue | 1 | 13 |
Total current liabilities | 6,603 | 6,582 |
Line of credit (LOC) | 4,347 | 4,281 |
Long-term debt, net of current portion | 639 | 1,024 |
Long-term capital leases, net of current portion | 108 | 174 |
Total liabilities | 11,697 | 12,061 |
Commitments | ' | ' |
Shareholders' deficit: | ' | ' |
Preferred stock - $0.001 par value, 25,000,000 authorized Series A designated 10,000,000 shares Issued and outstanding at June 30, 2014 and December 31, 2013, 9,215,129 and 9,930,982 shares, respectively | 9 | 10 |
Common stock - $0.001 par value Authorized 975,000,000 shares Issued and outstanding at June 30, 2014 and December 31, 2013, 4,335,115 and 111,633 shares, respectively | 4 | 0 |
Additional paid in capital | 57,099 | 56,177 |
Accumulated deficit | -65,314 | -63,276 |
Accumulated other comprehensive loss | -32 | -32 |
Total ERF wireless, Inc. shareholders' deficit | -8,234 | -7,121 |
Noncontrolling interest | 132 | 132 |
Total shareholders' deficit | -8,102 | -6,989 |
Total liabilities and shareholders' deficit | $3,595 | $5,072 |
CONSOLIDATED_BALANCE_SHEETS_Un1
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Shareholders' deficit: | ' | ' |
Preferred stock par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock authorized | 25,000,000 | 25,000,000 |
Preferred stock Series A shares issued | 9,215,129 | 9,930,982 |
Preferred stock Series A shares outstanding | 9,215,129 | 9,930,982 |
Common stock par value (in Dollars per share) | $0.00 | $0.00 |
Common stock shares authorized | 975,000,000 | 975,000,000 |
Common stock shares issued | 4,335,115 | 111,633 |
Common stock shares outstanding | 4,335,115 | 111,633 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Sales: | ' | ' | ' | ' |
Products | $22 | $0 | $39 | $11 |
Services | 1,613 | 1,563 | 3,187 | 3,466 |
Total sales | 1,635 | 1,563 | 3,226 | 3,477 |
Costs of goods sold: | ' | ' | ' | ' |
Products and integration services | 329 | 366 | 640 | 759 |
Rent, repairs and maintenance | 206 | 198 | 416 | 393 |
Depreciation | 404 | 435 | 814 | 872 |
Total costs of goods sold | 939 | 999 | 1,870 | 2,024 |
Gross profit | 696 | 564 | 1,356 | 1,453 |
Operating expenses: | ' | ' | ' | ' |
Selling, general and administrative | 1,232 | 1,859 | 2,573 | 3,836 |
Depreciation | 23 | 52 | 46 | 104 |
Total operating expenses | 1,255 | 1,911 | 2,619 | 3,940 |
Loss from operations | -559 | -1,347 | -1,263 | -2,487 |
Other income (expenses): | ' | ' | ' | ' |
Interest expense, net | -466 | -1,030 | -911 | -1,789 |
Derivative income | 38 | 104 | 244 | 339 |
Loss on extinguishment of debt | 0 | 0 | -108 | 0 |
Gain on sale of assets | 0 | 13 | 0 | 24 |
Total other (expense) income | -428 | -913 | -775 | -1,426 |
Consolidated net loss | -987 | -2,260 | -2,038 | -3,913 |
Net income (loss) attributable to non-controlling interest | -1 | 4 | 0 | 1 |
Net loss attributable to ERF Wireless Inc. | ($988) | ($2,256) | ($2,038) | ($3,912) |
Basic and diluted loss per common share: | ' | ' | ' | ' |
Net loss | ($0.37) | ($94.17) | ($1.34) | ($186) |
Net loss attributable to ERF Wireless, Inc. | ($0.37) | ($94.17) | ($1.34) | ($186) |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities | ' | ' |
Net loss | ($2,038) | ($3,913) |
Adjustments to reconcile net loss to net cash used by operating activities: | ' | ' |
Gain on sale of assets | 0 | -24 |
Loss on extinguishment of debt | 108 | 0 |
Amortization of debt discount | 299 | 892 |
Depreciation | 860 | 976 |
Stock issued for services rendered, interest and compensation | 188 | 709 |
Derivative income | -244 | -339 |
Bad debt expense | 31 | 17 |
Changes in: | ' | ' |
Accounts receivable, net | 609 | 86 |
Accounts receivable, other | 80 | 2 |
Inventories | 2 | 7 |
Prepaid expenses and other current assets | 107 | 167 |
Costs and profits in excess of billings | 0 | 35 |
Accounts payable | -241 | -181 |
Accrued expenses | 191 | -97 |
Deferred revenue | -12 | -12 |
Total adjustment | 1,978 | 2,238 |
Net cash used by operating activities | -60 | -1,675 |
Cash flows from investing activities | ' | ' |
Purchase of property and equipment | -58 | -168 |
Proceeds from sale of assets | 0 | 34 |
Change in other assets | -6 | 1 |
Net cash used by investing activities | -64 | -133 |
Cash flows from financing activities | ' | ' |
Net proceeds from line of credit | 482 | 774 |
Proceeds from long-term debt obligations | 100 | 2,916 |
Payment of long-term debt obligations | -185 | -632 |
Payment on capital lease obligations | -125 | -81 |
Net cash provided by financing activities | 272 | 2,977 |
Net change in cash and cash equivalents | 148 | 1,169 |
Cash and cash equivalents at the beginning of the period | 42 | 118 |
Cash and cash equivalents at the end of the period | 190 | 1,287 |
Supplemental disclosure of cash flow information: | ' | ' |
Net cash paid during the period for: Interest | 113 | 125 |
Net cash paid during the period for: Income taxes | 0 | 0 |
Supplemental non-cash investing and financing activities: | ' | ' |
Conversion of debt, principal through issuance of common stock | 128 | 1,139 |
Conversion of LOC, principal through issuance of common stock | 415 | 1,113 |
Property and equipment financed with debt and capital leases | $0 | $148 |
1_BASIS_OF_PRESENTATION
1. BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
NOTE 1 - BASIS OF PRESENTATION | ' |
Nature of the Company | |
ERF Wireless, Inc. (“Company” or “ERF Wireless”) provides critical infrastructure wireless broadband communications products and services to a broad spectrum of customers in primarily rural oil and gas exploration areas of North America. We also provide high quality broadband services and critical communications services to residential, oil and gas, educational, health care, and regional banks in rural areas utilizing our Company owned and operated wireless networks. As a total comprehensive solutions provider we offer a wide array of critical communications services including high speed broadband, voice over Internet Protocol (VOIP) telephone and facsimile service, and video security. | |
Historically, our revenues have been generated primarily from wireless internet and network construction services. Our Internet revenues have resulted from our offering of broadband and basic communications services to residential and enterprise customers. Our construction revenues typically have consisted of revenues generated from the construction of bank, educational, and healthcare networks and other services associated with providing wireless products and services to the regional banking, educational and healthcare industries. | |
Our internet revenues are recorded in “ERF Wireless Bundled Services, Inc. (WBS)”, revenues from construction of bank, healthcare and educational networks in our “ERF Enterprise Network Services, Inc. (ENS)” and wireless broadband products and services to rural oil and gas locations are recorded in “Energy Broadband, Inc. (EBI)”. Please refer to segment footnote 9 for additional information regarding segment operations. | |
Basis of Accounting | |
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's annual report for the year ended December 31, 2013 filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for the most recent fiscal year ended December 31, 2013 as reported in form 10-K have been omitted. | |
Non-controlling Interest | |
Non-controlling interest in our majority owned subsidiary EBI, is included in the equity section of the consolidated balance sheets. Non-controlling interest represents 3.63% of the equity of EBI and any transfer of value from ERF to non-controlling interest holders. Non-controlling interest is adjusted for the non-controlling interest holders’ proportionate share of the earnings or losses of EBI. Any excess losses applicable to the non-controlling interests have been and are borne by the Company as there is no obligation of the non-controlling interests to fund any losses in excess of their original investment. There is also no obligation or commitment on the part of the Company to fund operating losses of any subsidiary whether wholly-owned or majority-owned. | |
Reclassification | |
Certain amounts in the 2013 financial statements have been reclassified to conform to the 2014 financial presentation. These reclassifications have no impact on net loss. | |
Recent Accounting Pronouncements | |
Management does not anticipate that the recently issued but not yet effective accounting pronouncements will materially impact the Company’s financial condition. | |
2_DEBT_CONVERSION
2. DEBT CONVERSION | 6 Months Ended |
Jun. 30, 2014 | |
Debt Conversion | ' |
NOTE 2 - DEBT CONVERSION | ' |
(a) LINE OF CREDIT | |
During the six months ended June 30, 2014, the Company issued 2,017,000 shares of its common stock for the settlement of $415,938 of principal owed to Angus Capital Partners. The Company issued common stock at an average price of $.21 per share calculated based on the closing price the day the debt was settled. Of the 2,017,000 shares of common stock issued a total of 662,000 were issued to third parties that had acquired a portion of the Angus Capital Partners debt in a private transaction. | |
(b) Other Debt | |
During the six months ended June 30, 2014, the Company issued 624,845 and 346,207 shares of its Common Stock for the settlement of principal amount of $127,512 and $86,951 of accrued interest, respectively, for a total of $214,463. The Company issued Common Stock at an average price of $.22 per share calculated based on the closing price the day the debt was settled. |
3_COMMON_STOCK_PREFERRED_STOCK
3. COMMON STOCK, PREFERRED STOCK, AND WARRANTS | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Equity [Abstract] | ' | ||||
NOTE 3 - COMMON STOCK , PREFERRED STOCK AND WARRANTS | ' | ||||
The total number of shares of stock of all classes which the Company shall have the authority to issue is 1,000,000,000, of which 25,000,000 shall be shares of preferred stock with a par value of $0.001 per share ("Preferred Stock"), and 975,000,000 shall be shares of common stock with a par value of $0.001 per share ("Common Stock"). | |||||
Common Stock | |||||
As of June 30, 2014 and December 31, 2013, there were 4,335,115 and 111,633 shares of its Common Stock issued and outstanding, respectively. | |||||
During the six months ended June 30, 2014, the Company issued 3,544,415 shares of Common Stock, which was valued at the closing market price on the date of issuance of such shares, which were issued in lieu of cash as payment for the following (in thousands): | |||||
30-Jun-14 | Supplemental Non-Cash Disclosure | ||||
Professional fees | $ | 121 | |||
Other services rendered | 67 | ||||
Total for services, compensation and interest | $ | 188 | |||
Notes payable, principal | $ | 128 | |||
Line of credit, principal | $ | 415 | |||
Preferred Stock | |||||
The Company has 25,000,000 shares of Preferred Stock authorized of which 10,000,000 shares had been designated as Series A Preferred Stock (“Series A Preferred Stock”). There were 9,215,129 shares of Series A Preferred Shares issued and outstanding at June 30, 2014 and 9,930,982 at December 31, 2013. With respect to the Series A Preferred Stock outstanding at June 30, 2014, the Company would be required to issue 9,215,129 shares of its Common Stock upon conversion. | |||||
During the period ended June 30, 2014, 715,583 Series A Preferred Stock were converted into 679,068 shares of common stock. | |||||
ERF Wireless, Inc Distribution of EBI Equities to Non-controlling Interest | |||||
As of June 30, 2014, the Company had issued 725,611 shares of EBI as a stock dividend and three year warrant expiring December 31, 2014, to purchase 725,611 shares of EBI Common Stock at an exercise price of $4.00 per share and three year warrant expiring December 31, 2014, to purchase 725,611 shares of EBI Common Stock at an exercise price of $6.00; such issuances are valued at $107,000. The Company expects to issue the remaining stock dividends during calendar year 2014. No stock dividends were issued during the six months ended June 30, 2014. |
4_EARNINGS_PER_SHARE
4. EARNINGS PER SHARE | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
NOTE 4 - EARNINGS PER SHARE | ' | ||||||||||||
The following table sets forth the computation of basic and diluted earnings per share of Common Stock (in thousands, except per share amount): | |||||||||||||
For the three months ended June 30, 2014 | |||||||||||||
Net loss | Shares | Per-Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Basic EPS: | |||||||||||||
Net loss | $ | (987 | ) | 2,645 | $ | (0.37 | ) | ||||||
Net loss attributable to ERF Wireless, Inc. | $ | (988 | ) | 2,645 | $ | (0.37 | ) | ||||||
For the three months ended June 30, 2013 | |||||||||||||
Net loss | Shares | Per-Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Basic EPS: | |||||||||||||
Net loss | $ | (2,260 | ) | 24 | $ | (94.17 | ) | ||||||
Net loss attributable to ERF Wireless, Inc. | $ | (2,256 | ) | 24 | $ | (94.00 | ) | ||||||
For the six months ended June 30, 2014 | |||||||||||||
Net loss | Shares | Per-Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Basic and diluted EPS: | |||||||||||||
Net loss | $ | (2,038 | ) | 1,521 | $ | (1.34 | ) | ||||||
Net loss attributable to ERF Wireless, Inc. | $ | (2,038 | ) | 1,521 | $ | (1.34 | ) | ||||||
For the six months ended June 30, 2013 | |||||||||||||
Net loss | Shares | Per-Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Basic and diluted EPS: | |||||||||||||
Net loss | $ | (3,913 | ) | 21 | $ | (186.33 | ) | ||||||
Net loss attributable to ERF Wireless, Inc. | $ | (3,912 | ) | 21 | $ | (186.29 | ) | ||||||
For the six months ended June 30, 2014, dilutive securities existed, but due to the Company’s net loss there is an anti-dilutive effect. Diluted earnings per share reflect the potential dilution of security that could share in the earnings of an entity, such as convertible preferred stock, stock options, warrants or convertible securities. | |||||||||||||
The calculation of diluted earnings per share for the six months ended June 30, 2014 does not include 2,392,308 shares of Common Stock underlying the Bonds (as define below); 529 of warrants underlying promissory convertible debt, 18,796,124 shares of Common stock underlying promissory convertible debt and 9,215,129 shares of Common Stock underlying the Series A Preferred Stock, due to their anti-dilutive effect. | |||||||||||||
5_MAJOR_CUSTOMERS
5. MAJOR CUSTOMERS | 6 Months Ended |
Jun. 30, 2014 | |
Risks and Uncertainties [Abstract] | ' |
NOTE 5 - MAJOR CUSTOMERS | ' |
The Company had gross sales of $3,226,000 and $3,477,000 for the six months ended June 30, 2014 and 2013, respectively. The Company had two customers that met the required disclosure of 10% that represented 30% and 11% of the gross sales during the six months ended June 30, 2014. Additionally, the Company had two customers that met the required disclosure of 10% that represented 33% and 12% of the gross sales during the six months ended June 30, 2013. |
6_NOTES_PAYABLE_LONGTERM_DEBT_
6. NOTES PAYABLE, LONG-TERM DEBT AND CAPITAL LEASES | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||||||
NOTE 6 - NOTES PAYABLE, LONG-TERM DEBT AND CAPITAL LEASES | ' | ||||||||||||||||||||
Notes payable, long-term debts and capital leases consist of the following as of June 30, 2014 (in thousands): | |||||||||||||||||||||
Terms | Maturity Date | Interest Rate | Gross Balance | Debt Discount | Balance | ||||||||||||||||
Banc leasing, Inc. | $10,660 / Month including interest | 15-Jan | 11.62% | $ | 72 | $ | – | $ | 72 | ||||||||||||
Advantage leasing associates | $8,269 / Month including interest | Various | Various | 71 | – | 71 | |||||||||||||||
Legacy laser services Dallas, LLC | $9,947 / Month including interest | 16-May | 42.00% | 158 | – | 158 | |||||||||||||||
KBM World Wide, Inc. | $103,500 / Month including interest | 15-Mar | 8.00% | 104 | 91 | 13 | |||||||||||||||
Tonaquint | $950,400 / Lump sum payment including interest | Immediately due and payable | 12.00% | 764 | – | 764 | |||||||||||||||
JMJ Financial | $330,000 / Lump sum payment including interest | 14-Mar | 12.00% | 187 | 25 | 162 | |||||||||||||||
Vista capital | $72,600 / Lump sum payment including interest | Immediately due and payable | 12.00% | 64 | – | 64 | |||||||||||||||
Willow creek capital | $293,040 / Lump sum payment including interest | Immediately due and payable | 12.00% | 182 | – | 182 | |||||||||||||||
TCA global line of credit | $149,609 / Month including interest | 14-Jul | 12.00% | 1,007 | 56 | 951 | |||||||||||||||
Group 10 | $157,500 / Month including interest | 14-Jul | 12.00% | 136 | 85 | 51 | |||||||||||||||
Investor financing | $495,000 / Lump sum payment including interest | 14-Apr | 12.00% | 548 | – | 548 | |||||||||||||||
Premium assignment | $2,063 / Month including interest | 14-Sep | 5.68% | 6 | – | 6 | |||||||||||||||
Dakota capital equipment financing | $178,031 / Quarterly including interest | 16-Mar | 12.00% | 1,518 | 6 | 1,512 | |||||||||||||||
E-bond investor notes | 3 years/ Semiannual interest (See below) | Various | 7.50% | 311 | 143 | 168 | |||||||||||||||
Line of credit | 2 years/ Quarterly interest (See below) | 16-Dec | 3.00% | 4,347 | – | 4,347 | |||||||||||||||
Total debt | $ | 9,475 | $ | 406 | 9,069 | ||||||||||||||||
Less current maturities | (3,975 | ) | |||||||||||||||||||
Long-term debt | $ | 5,094 | |||||||||||||||||||
Notes payable, long-term debts and capital leases consist of the following as of December 31, 2013 (in thousands): | |||||||||||||||||||||
Terms | Maturity Date | Interest Rate | Gross Balance | Debt Discount | Balance | ||||||||||||||||
Banc leasing, Inc. | $10,660 / Month including interest | 15-Jan | 11.62% | $ | 130 | $ | – | $ | 130 | ||||||||||||
Advantage leasing associates | $8,269 / Month including interest | Various | Various | 115 | – | 115 | |||||||||||||||
Legacy laser services Dallas, LLC | $9,947 / Month including interest | 16-May | 42.00% | 181 | – | 181 | |||||||||||||||
MP Nexlevel LLC | $7,043 / Month including interest | 14-May | 10.00% | 34 | – | 34 | |||||||||||||||
Tonaquint | $950,400 / Lump sum payment including interest | Immediately due and payable | 12.00% | 793 | – | 793 | |||||||||||||||
JMJ Financial | $330,000 / Lump sum payment including interest | 14-Mar | 12.00% | 232 | 174 | 58 | |||||||||||||||
Vista capital | $72,600 / Lump sum payment including interest | Immediately due and payable | 12.00% | 51 | – | 51 | |||||||||||||||
Willow creek capital | $293,040 / Lump sum payment including interest | Immediately due and payable | 12.00% | 228 | – | 228 | |||||||||||||||
TCA global line of credit | $139,523 / Month including interest | 14-Jul | 12.00% | 1,019 | 104 | 915 | |||||||||||||||
Group 10 | $157,500 / Month including interest | 14-Jul | 12.00% | 157 | 143 | 14 | |||||||||||||||
Investor financing | $495,000 / Lump sum payment including interest | 14-Apr | 12.00% | 473 | – | 473 | |||||||||||||||
Premium assignment | $2,063 / Month including interest | 14-Sep | 5.68% | 18 | – | 18 | |||||||||||||||
Dakota capital equipment financing | $178,031 / Quarterly including interest | 16-Mar | 12.00% | 1,519 | 25 | 1,494 | |||||||||||||||
E-bond investor notes | 3 years/ Semiannual interest (See below) | Various | 7.50% | 311 | 182 | 129 | |||||||||||||||
Line of credit | 2 years/ Quarterly interest (See below) | 16-Dec | 3.00% | 4,281 | – | 4,281 | |||||||||||||||
Total debt | $ | 9,542 | $ | 628 | 8,914 | ||||||||||||||||
Less current maturities | (3,435 | ) | |||||||||||||||||||
Long-term debt | $ | 5,479 | |||||||||||||||||||
Line of Credit | |||||||||||||||||||||
In December 2013, the maturity date of the $12.0 million unsecured revolving credit facility with Angus Capital Partners, a related party, was extended from December 31, 2015 to December 31, 2017. The Company also renegotiated the interest rate from 12% per annum to 3% per annum retroactive to January 1, 2013. The Company in consideration has accepted the return and cancellation of 36,784 common shares (post-split) of Company common stock issued for the Line of Credit conversions during 2013. The Company has accordingly reversed the payment of principal and interest of $2,158,000 in December 2013 and subsequently received the canceled shares in February 2014. The terms of the unsecured revolving credit facility allow the Company to draw upon the facility as financing requirements dictate and provide for quarterly interest payments at a 3% rate per annum. The payment of principal may be paid in cash, common shares or preferred shares at the Lender’s election. The payment of interest may only be paid in cash. At June 30, 2014, the outstanding balance on the line of credit totaled $4,347,000 leaving a remaining line of credit available of $7,653,000. | |||||||||||||||||||||
During the six months ended June 30, 2014, the Company issued 2,017,000 shares of its common stock for the settlement of $415,938 of principal owed to Angus Capital Partners. The Company issued common stock at an average price of $.21 per share calculated based on the closing price the day the debt was settled. Of the 2,017,000 shares of common stock issued a total of 662,000 were issued to third parties that had acquired a portion of the Angus Capital Partners debt in a private transaction. | |||||||||||||||||||||
E-Series Bond Investor Note | |||||||||||||||||||||
During the six months ended June 30, 2014, the outstanding principal balance of the Bonds totaled $311,000. The Bonds are due and payable upon maturity, a three-year period from the issuance date. Interest on the Bonds is payable at the rate of 7.5% per annum, and is payable semiannually. The Bondholder may require the Company to convert the Bond (including any unpaid interest) into shares of Common Stock at any time only during the first year. If the Bonds are converted under this option, the Company will issue shares representing 100% of the Bond principal and unpaid interest calculated through maturity. The Common Stock issued under this option will be valued at the average closing price of the common shares for the five days prior to the notification. If the Bond is converted within the first year the Company will issue a three-year warrant to purchase one share of EBI Common Stock at a price of $4.00 for every $2.00 of Bond principal. | |||||||||||||||||||||
At the Company's discretion at any time after the first year, the Bonds, including the interest payments calculated through the date of conversion may be redeemed in cash or in shares of our Common Stock, valued at the average last sales price over the 20-trading-day period preceding any payment date. If the Company chooses to issue Common Stock as redemption of the Bond principal, we will issue shares representing a value equal to 125% of the Bond principal and shares representing a value equal to 100% of the Bond interest through redemption date. | |||||||||||||||||||||
The Bonds were determined to include various embedded derivative liabilities. The derivative liabilities are the conversion feature and the redemption option (compound embedded derivative liability). At the date of issuance of the Bond, compound embedded derivative liabilities were measured at fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. These derivative liabilities will be marked-to-market each quarter with the change in fair value recorded in the statement of operations. The Company uses the effective interest method to record interest expense from the accretion of the debt discount and from the accretion of unamortized discount upon conversion, which totaled $39,000 for the six months ended June 30, 2014. The estimated debt accretion for subsequent years is $54,000 and $89,000 for years ending December 31, 2014, and 2015, respectively. | |||||||||||||||||||||
The following table summarizes the convertible debt activity for the period from January 1, 2014 through June 30, 2014: | |||||||||||||||||||||
Description | Bonds | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value at December 31, 2013 | $ | 128,762 | $ | 39,730 | $ | 168,492 | |||||||||||||||
Change in fair value | 39,064 | (32,250 | ) | 6,814 | |||||||||||||||||
Fair value at June 30, 2014 | $ | 167,826 | $ | 7,480 | $ | 175,306 | |||||||||||||||
The Company recorded derivative income of $32,250 for the six months ended June 30, 2014. | |||||||||||||||||||||
Dakota Capital Fund LLC Equipment Financing | |||||||||||||||||||||
In November 2011, the Company entered into debt financing agreement with Dakota Capital Fund LLC, for financing of up to $3,000,000. During the fourth quarter of 2011, the Company received proceeds of $2,000,000 and had the option of additional funding of $1,000,000 for equipment purchases. This debt facility is secured by certain ERF Wireless assets and there is no prepayment penalty. At June 30, 2014, the outstanding balance on the debt financing agreement totaled $1,518,000 and the Company has elected not to request any additional funds under this credit facility. The payment terms are $178,031 per quarter including interest, at an annual rate of 18% per annum plus 10% of positive operational cash flow as determined on a quarterly basis for repayment of additional principal beginning July 1, 2012. The funding was utilized to purchase equipment to build out networks in oil and gas exploration regions of North America. | |||||||||||||||||||||
The Company issued 30,000 shares of Common Stock for the consummation of the initial $2,000,000 debt financing agreement from Dakota Capital Fund LLC resulting in a debt discount of $93,600. The Company uses the effective interest method to record interest expense from the accretion of the debt discount and accretes the unamortized discount upon conversion which totaled $18,156 for the six months ended June 30, 2014. The estimated debt accretion for the remainder of 2014 is $6,455. | |||||||||||||||||||||
Investor Financing Loan | |||||||||||||||||||||
On July 13, 2012, the Company entered into a three-month secured debt financing agreement with certain individuals for $1,000,000 with an interest rate of 12% per annum. Under a subsequent modified agreement dated April 2014, as amended, the maturity date has been extended from April 15, 2014 to October 15, 2014. Both parties under the amendment agreed to apply the Dakota Capital Fund payment of $181,235 including interest as a subset to the bridge note. The Company has also renegotiated the subset interest rate from .5% interest per day on a 360 day calendar year to 12% rate per annum retroactive to March 23, 2013. The Company in consideration has accepted the return and cancellation of 796 common shares (post-split) of Company common stock issued during the third quarter of 2013 for interest. The Company also agreed to additional consideration of 5,000 of preferred A shares to be issued as long as the note remains unpaid and to be remitted once the note is paid in full. The Company has agreed to add a $50,000 penalty to principal in January 2014 for the consideration of the extension of the note. The Company has accordingly reversed the payment of interest of $159,259 in December 2013. The Company has agreed to add an additional $25,000 penalty to principal in April 2014 for the extension of the note to October 2015. In addition, the Company will pay $1,500 toward the bridge loan interest on the 1st and 15th of each month beginning May 15, 2014 until loan is fully paid. At June 30, 2014, the outstanding principal balance totaled $548,000. | |||||||||||||||||||||
Tonaquint Convertible Promissory Note | |||||||||||||||||||||
On March 5, 2013, the Company entered into a six-month secured convertible promissory note secured debt financing agreement with Tonaquint, Inc. (“holder”), for $791,500, bearing interest at a rate of 12% per annum and matured on September 5, 2013. At June 30, 2014, the outstanding principal balance of the Tonaquint convertible promissory note totaled $764,000. The note includes an original issue discount (“OID”) of $65,000 based on the consideration funded, prepaid interest of $71,500 and $5,000 in legal and other expense. The Company also paid holder an origination fee in the amount of $227,500 in 144 Stock (711 post-split shares) at the closing bid price on March 5, 2013, plus 125 post-split shares (valued at $40,000) of the Company’s common stock. The holder may require the Company to convert the outstanding principal balance (including any unpaid interest) into shares of restricted common stock at any time after the six-month term of the note. The common stock issued will be valued using a conversion factor of 80% of the average of the lowest two (2) trading prices for common shares during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date. If the average two (2) lowest trading prices is less than $0.33, then the conversion factor will be reduced to 70%. The holder received the option to purchase five-year warrants expiring March 5, 2018 to purchase 371 shares of ERF common stock at an exercise price of $320.00 or the per-share price at which the common stock is sold in an underwritten public offering that closes on or before the date that is six (6) months from the issue date, as may be adjusted from time to time pursuant to the terms and conditions of this warrant. The Company is not in compliance with all the provisions of the note causing an automatic acceleration of the outstanding balance of $791,500 to $949,800. The note will accrue interest at a rate of 12% from September 5, 2013 until March 4, 2014 and thereafter at a rate of 18% per annum. The note is recorded as a current liability. | |||||||||||||||||||||
The Tonaquint promissory note was determined to include various embedded derivative liabilities. The derivative liabilities are the conversion feature, conversion price reset feature and the redemption option (compound embedded derivative liability). At the date of issuance of the Tonaquint note, compound embedded derivative liabilities were measured at fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. These derivative liabilities will be marked-to-market each quarter with the change in fair value recorded in the statement of operations. The Company used the effective interest method to record interest expense from the accretion of the debt discount. | |||||||||||||||||||||
The following table summarizes the convertible debt activity for the period from January 1, 2014 through June 30, 2014: | |||||||||||||||||||||
Description | Tonaquint | Warrant Compound Derivative Liability | Compound Derivative Liability | Total | |||||||||||||||||
Fair value at December 31, 2013 | $ | 793,368 | $ | 96 | $ | 80,569 | $ | 874,033 | |||||||||||||
Change in fair value | – | (93 | ) | (164,693 | ) | (164,786 | ) | ||||||||||||||
Conversions | (28,841 | ) | – | – | (28,841 | ) | |||||||||||||||
Fair value at June 30, 2014 | $ | 764,527 | $ | 3 | $ | (84,124 | ) | $ | 680,406 | ||||||||||||
The Company recorded derivative expense of $29,489 for the six months ended June 30, 2014. | |||||||||||||||||||||
JMJ Financial Convertible Promissory Note | |||||||||||||||||||||
On March 20, 2013, the Company entered into a one year unsecured promissory note debt financing agreement with JMJ Financial for (“JMJ”) up to $500,000 at the sole discretion of additional consideration with the Lender. The note includes a 10% original issue discount that is prorated based on the consideration funded. The Company also paid holder an origination fee in the amount of $40,500 in 144 Stock (125 post-split shares) at the closing bid price of the Company’s common stock. As of June 30, 2014 the Company has received funding of $300,000, bearing interest at a rate of 12% per annum and maturing in one year from the effective date of each payment. At June 30, 2014, the outstanding principal balance of the JMJ Financial convertible promissory note totaled $187,000 including OID. The conversion price is the lesser of $0.59 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The note is recorded as a current liability. | |||||||||||||||||||||
The JMJ promissory note was determined to include various embedded derivative liabilities. The derivative liabilities are the conversion feature, conversion price reset feature and the redemption option (compound embedded derivative liability). At the date of issuance of the JMJ note, compound embedded derivative liabilities were measured at fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. These derivative liabilities will be marked-to-market each quarter with the change in fair value recorded in the statement of operations. The Company uses the effective interest method to record interest expense from the accretion of the debt discount and from the accretion of unamortized discount upon conversion, which totaled $154,148 for the six months ended June 30, 2014. The estimated debt accretion for the remainder of 2014 is $24,611. | |||||||||||||||||||||
The following table summarizes the convertible debt activity for the period from January 1, 2014 through June 30, 2014: | |||||||||||||||||||||
Description | JMJ | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value at December 31, 2013 | $ | 58,363 | $ | 134,113 | $ | 192,476 | |||||||||||||||
Change in fair value | 148,706 | (125,422 | ) | 23,284 | |||||||||||||||||
Conversions | (45,372 | ) | – | (45,372 | ) | ||||||||||||||||
Fair value at June 30, 2014 | $ | 161,697 | $ | 8,691 | $ | 170,388 | |||||||||||||||
The Company recorded derivative income of $95,942 for the six months ended June 30, 2014. | |||||||||||||||||||||
Willow Creek Capital Convertible Promissory Note | |||||||||||||||||||||
On April 2, 2013, the Company entered into a nine-month secured convertible promissory note debt financing agreement with Willow Creek Capital, LLC, for $244,200, bearing interest at a rate of 12% per annum and matured on October 1, 2013. At June 30, 2014, the outstanding principal balance of the Willow Creek convertible promissory note totaled $182,000. The note also includes a 10% OID of $20,000 based on the consideration funded, prepaid interest of $22,200 and $2,000 in legal and other expense. The Company also paid holder an origination fee in the amount of $109,890 in 144 Stock (366 post-split shares) at the closing bid price of the Company’s common stock. The holder may require the Company to convert the outstanding principal balance (including any unpaid interest) into shares of restricted common stock at any time after the six months term of the note. The common stock issued will be valued using a conversion factor of 80% the average of the lowest two (2) trading prices common shares during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date. If the average two (2) lowest trading prices is less than $0.33, then the conversion factor will be reduced to 70%. The holder will be entitled to purchase from the Company five year warrants expiring April 2, 2018 to purchase 122 post-split shares of ERF common stock at an exercise price of $300.00 or the per-share price at which the common stock is sold in an underwritten public offering that closes on or before the date that is six (6) months from the issue date, as may be adjusted from time to time pursuant to the terms and conditions of this Warrant. | |||||||||||||||||||||
The Willow Creek promissory note was determined to include various embedded derivative liabilities. The derivative liabilities are the conversion feature; conversion price full ratchet reset feature and the redemption option (compound embedded derivative liability). At the date of issuance of the Willow Creek note, compound embedded derivative liabilities were measured at fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. These derivative liabilities will be marked-to-market each quarter with the change in fair value recorded in the statement of operations. The Company used the effective interest method to record interest expense from the accretion of the debt discount and from the accretion of unamortized discount upon conversion. The Company is not in compliance with all the provisions of the note causing an automatic acceleration of the outstanding balance of $244,200 to $293,040. The note will accrue interest at a rate of 12% from October 1, 2013 until April 1, 2014 and thereafter at a rate of 18% per annum. The note is recorded as a current liability. | |||||||||||||||||||||
The following table summarizes the convertible debt activity for the period from January 1, 2014 through June 30, 2014: | |||||||||||||||||||||
Description | Willowcreek | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value at December 31, 2013 | $ | 227,800 | $ | 51,276 | $ | 279,076 | |||||||||||||||
Change in fair value | – | (27,462 | ) | (27,462 | ) | ||||||||||||||||
Conversions | (26,183 | ) | – | (26,183 | ) | ||||||||||||||||
Fair value at June 30, 2014 | $ | 201,617 | $ | 23,814 | $ | 225,431 | |||||||||||||||
The Company recorded derivative expense of $27,305 for the six months ended June 30, 2014. | |||||||||||||||||||||
Vista Capital Convertible Promissory Note | |||||||||||||||||||||
On April 4, 2013, the Company entered into a six-month secured convertible promissory note debt financing agreement with Vista Capital Investments, LLC, for $60,500, bearing interest at a rate of 12% per annum and matured on October 4, 2013. The note also includes a 10% OID of $5,000 based on the consideration funded and prepaid interest of $5,500. The Company also paid holder an origination fee in the amount of $21,175 in 144 Stock (84 post-split shares) at the closing bid price of the Company’s common stock. The holder may require the Company to convert the outstanding principal balance (including any unpaid interest) into shares of restricted common stock at any time after the six months term of the note. The common stock issued will be valued using a conversion factor of 80% the average of the lowest two (2) trading prices common shares during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date. If the average two (2) lowest trading prices is less than $0.33, then the conversion factor will be reduced to 70%. The holder will be entitled to purchase from the Company five year warrants expiring April 4, 2018 to purchase 36 post-split shares of ERF common stock at an exercise price of $320.00 or the per-share price at which the common stock is sold in an underwritten public offering that closes on or before the date that is six (6) months from the issue date, as may be adjusted from time to time pursuant to the terms and conditions of this Warrant. | |||||||||||||||||||||
The Vista promissory note was determined to include various embedded derivative liabilities. The derivative liabilities are the conversion feature; conversion price full ratchet reset feature and the redemption option (compound embedded derivative liability). At the date of issuance of the Vista note, compound embedded derivative liabilities were measured at fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. These derivative liabilities will be marked-to-market each quarter with the change in fair value recorded in the statement of operations. The Company used the effective interest method to record interest expense from the accretion of the debt discount and from the accretion of unamortized discount upon conversion. The Company is not in compliance with all the provisions of the note causing an automatic acceleration of the outstanding balance of $60,500 to $72,600. The note will accrue interest at a rate of 12% from October 4, 2013 until April 3, 2014 and thereafter at a rate of 18% per annum. At June 30, 2014, the outstanding principal balance of the Vista Capital convertible promissory note totaled $64,000. | |||||||||||||||||||||
The following table summarizes the convertible debt activity for the period from January 1, 2014 through June 30, 2014: | |||||||||||||||||||||
Description | Vista | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value at December 31, 2013 | $ | 50,558 | $ | 37,516 | $ | 88,074 | |||||||||||||||
Change in fair value | – | (26,508 | ) | (26,508 | ) | ||||||||||||||||
Conversions | 13,887 | – | 13,887 | ||||||||||||||||||
Fair value at June 30, 2014 | $ | 64,445 | $ | 11,008 | $ | 75,453 | |||||||||||||||
The Company recorded derivative income of $26,508 for the six months ended June 30, 2014. | |||||||||||||||||||||
TCA Global Convertible Promissory Note | |||||||||||||||||||||
On June 28, 2013, the Company entered into a twelve-month secured convertible promissory note debt financing agreement with TCA Global Credit Master Fund (TCA) for $1,500,000, bearing interest at a rate of 12% per annum and maturing July 28, 2014. Under a subsequent modified agreement dated March 25, 2014, TCA has agreed to restructure the agreement and extend the maturity date to November 15, 2014. The Company in consideration has agreed to a $75,000 and a $50,000 restructuring and advisory fee to be added to the sum of the principal balance including a $40,791 interest charge to be paid and nominal legal fees. The monthly principal and interest payments will be $149,609 per month. At June 30, 2014, the outstanding principal balance of the TCA Global convertible promissory note totaled $1,007,000. The note also includes $153,300 in commitment fees; due diligence fees; document review fees; service fees; legal; and other expense. The holder may require the Company to convert the outstanding principal balance (including any unpaid interest) into shares of restricted common stock at any time during the twelve months term of the note or thereafter. The common stock issued will be valued using a conversion factor of 85% the average VWAP trading price during the five (5) trading day period ending on the latest complete trading day prior to the conversion date. Due to the restructuring of the note the Company incurred $108,000 loss on extinguishment of debt. | |||||||||||||||||||||
The TCA Global promissory note was determined to include various embedded derivative liabilities. The derivative liabilities are the conversion feature and the redemption option (compound embedded derivative liability). At the date of issuance of the TCA Global note, compound embedded derivative liabilities were measured at fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. These derivative liabilities will be marked-to-market each quarter with the change in fair value recorded in the statement of operations. The Company uses the effective interest method to record interest expense from the accretion of the debt discount and from the accretion of unamortized discount upon conversion that totaled $43,416 for the six months ended June 30, 2014. The estimated debt accretion for the remainder of the 2014 will be $55,895. | |||||||||||||||||||||
The following table summarizes the convertible debt activity for the period from January 1, 2014 through June 30, 2014: | |||||||||||||||||||||
Description | TCA Global | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value at December 31, 2013 | $ | 915,440 | $ | 28,716 | $ | 944,156 | |||||||||||||||
Fair value issuances at inception | 161,713 | 12,584 | 174,297 | ||||||||||||||||||
Change in fair value | (126,446 | ) | – | (126,446 | ) | ||||||||||||||||
Fair value at June 30, 2014 | $ | 950,707 | $ | 41,300 | $ | 992,007 | |||||||||||||||
The Company recorded derivative expense of $64,032 for the six months ended June 30, 2014. | |||||||||||||||||||||
Group 10 Holdings Convertible Promissory Note | |||||||||||||||||||||
On October 3, 2013, the Company entered into a twelve-month unsecured convertible promissory note debt financing agreement with Group 10 Holdings, LLC, for $157,500, bearing interest at a rate of 12% per annum and maturing October 2, 2014. The note also includes a 5% OID of $7,500 based on the consideration funded. The Company also paid holder a commitment fee in the amount of $45,000 in 144 Stock (1,125 post-split shares) at the closing bid price of the Company’s common stock. The holder may require the Company to convert the outstanding principal balance (including any unpaid interest) into shares of restricted common stock at any time after the twelve months term of the note. The common stock issued will be valued using a conversion factor of 55% multiplied by the lowest closing bid price of the (20) trading days prior to the conversions, which represents a discount rate of 45%. | |||||||||||||||||||||
The Group 10 Holdings promissory note was determined to include various embedded derivative liabilities. The derivative liabilities are the conversion feature; conversion price full ratchet reset feature and the redemption option (compound embedded derivative liability). At the date of issuance of the Group 10 note, compound embedded derivative liabilities were measured at fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. These derivative liabilities will be marked-to-market each quarter with the change in fair value recorded in the statement of operations. The Company uses the effective interest method to record interest expense from the accretion of the debt discount and from the accretion of unamortized discount upon conversion that totaled $58,459 for the six months ended June 30, 2014. The estimated debt accretion for the remainder of 2014 is $84,886. The note will accrue interest at a rate of 12% from October 3, 2013 until October 2, 2014 and thereafter at a rate of 18% per annum. At June 30, 2014, the outstanding principal balance of the Group 10 convertible promissory note totaled $136,000. | |||||||||||||||||||||
The following table summarizes the convertible debt activity for the period from January 1, 2014 through June 30, 2014: | |||||||||||||||||||||
Description | Group 10 | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value at December 31, 2013 | $ | 14,155 | $ | 304,519 | $ | 318,674 | |||||||||||||||
Change in fair value | 58,459 | (258,116 | ) | (199,657 | ) | ||||||||||||||||
Conversions | (21,652 | ) | – | (21,652 | ) | ||||||||||||||||
Fair value at June 30, 2014 | $ | 50,962 | $ | 46,403 | $ | 97,365 | |||||||||||||||
The Company recorded derivative income of $211,213 for the six months ended June 30, 2014. | |||||||||||||||||||||
KBM World Wide Inc. Convertible Promissory Note | |||||||||||||||||||||
On June 26, 2014, the Company entered into a nine-month unsecured convertible promissory note debt financing agreement with KBM World Wide Inc. for $103,500, bearing interest at a rate of 8% per annum and maturing March 27, 2015. The holder may require the Company to convert the outstanding principal balance (including any unpaid interest) into shares of restricted common stock at any time after 180 days following the date of this note and ending on final payment of the convertible note. The common stock issued will be valued using a conversion factor of 61% multiplied by the lowest three trading prices of the (10) trading days prior to the conversion date, which represents a discount rate of 39%. | |||||||||||||||||||||
The KBM World Wide Inc. promissory note was determined to include various embedded derivative liabilities. The derivative liabilities are the conversion feature; conversion price full ratchet reset feature and the redemption option (compound embedded derivative liability). At the date of issuance of the KBM World Wide Inc. note, compound embedded derivative liabilities were measured at fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. These derivative liabilities will be marked-to-market each quarter with the change in fair value recorded in the statement of operations. The Company uses the effective interest method to record interest expense from the accretion of the debt discount and from the accretion of unamortized discount upon conversion that totaled $430 for the six months ended June 30, 2014. The estimated debt accretion for subsequent years is $61,296 and $28,649 for years ending December 31, 2014, and 2015, respectively. The note will accrue interest at a rate of 8% from June 26, 2014 until March 27, 2015 and thereafter at a rate of 22% per annum. At June 30, 2014, the outstanding principal balance of the KBM World Wide Inc. convertible promissory note totaled $103,500. | |||||||||||||||||||||
The following table summarizes the convertible debt activity for the period from January 1, 2014 through June 30, 2014: | |||||||||||||||||||||
Description | KBM World Wide | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value issuances at inception | $ | 103,500 | $ | 91,277 | $ | 194,777 | |||||||||||||||
Fair value issuances during 2014 (debt discount) | (91,277 | ) | – | (91,277 | ) | ||||||||||||||||
Change in fair value | 430 | 865 | 1,295 | ||||||||||||||||||
Fair value at June 30, 2014 | $ | 12,653 | $ | 92,142 | $ | 104,795 | |||||||||||||||
The Company recorded derivative expense of $865 for the six months ended June 30, 2014. | |||||||||||||||||||||
Capital Leases | |||||||||||||||||||||
Banc Leasing Inc. Included in property and equipment at June 30, 2014, the cost of the equipment was $610,900 and the accumulated amortization was $554,901. Amortization of assets under capital leases is included in depreciation expense. The equipment is the primary collateral securing the financing. | |||||||||||||||||||||
Advantage Leasing Inc. Included in vehicles at June 30, 2014, the cost of the vehicles was $273,443 and the accumulated amortization was $201,640. Amortization of assets under capital leases is included in depreciation expense. The vehicles are the primary collateral securing the financing. | |||||||||||||||||||||
Legacy Laser Services Dallas, LLC Included in property and equipment at June 30, 2014, the cost of the equipment was $155,349 and the accumulated amortization was $58,856. Amortization of assets under capital leases is included in depreciation expense. The equipment is the primary collateral securing the financing. | |||||||||||||||||||||
The following is a schedule by years of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of June 30, 2014 (in thousands): | |||||||||||||||||||||
Year Ending December 31, | |||||||||||||||||||||
2014 | $ | 162 | |||||||||||||||||||
2015 | 159 | ||||||||||||||||||||
2016 | 63 | ||||||||||||||||||||
2017 | – | ||||||||||||||||||||
Thereafter | – | ||||||||||||||||||||
Total minimum lease payments | 384 | ||||||||||||||||||||
Less amount representing interest | (83 | ) | |||||||||||||||||||
Present value of net minimum lease payments | 301 | ||||||||||||||||||||
Current maturities of capital lease obligations | (193 | ) | |||||||||||||||||||
Long-term portion of capital lease obligations | $ | 108 |
7_COMMITMENTS
7. COMMITMENTS | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
NOTE 7 - COMMITMENTS | ' | ||||
Leases and License Agreements | |||||
For the six months ended June 30, 2014 and 2013, rental expenses of approximately $586,000 and $596,000, respectively, were incurred. The Company accounts for rent expense under leases that provide for escalating rentals over the related lease term on a straight-line method. The Company occupies office and tower facilities under several non-cancelable operating lease agreements expiring at various dates through December 2018, and requiring payment of property taxes, insurance, maintenance and utilities. | |||||
Future minimum lease payments under non-cancelable operating leases as of December 31, 2014 were as follows (in thousands): | |||||
Year Ending December 31, | Amount | ||||
2014 | $ | 372 | |||
2015 | 707 | ||||
2016 | 610 | ||||
2017 | 116 | ||||
Thereafter | 9 | ||||
Total | $ | 1,814 | |||
Banc Leasing Inc. | |||||
During August 2007, the Company entered into a contract with Banc Leasing Inc. to fund the Company’s US-Banknet System. Each funding is collateralize by the equipment and normally is repaid over a seven year period with interest established at the date of the inception of the lease. Each lease has a $1 buyout provision. The details of the capital lease are included in Note 6. |
8_RELATED_PARTY_TRANSACTIONS
8. RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
8. RELATED PARTY TRANSACTIONS | ' |
In May 2013, the Company entered into a capital lease agreement with Legacy Laser Services Dallas, LLC and (Affiliate). Manny M. Carter is a Managing Member of Legacy Laser Services and a current Board Member of ERF Wireless Inc. At June 30, 2014, the outstanding balance on the capital leases totaled $158,000. The payment terms are $9,947 per month including interest, at an annual rate of 42% per annum. The capital leased equipment is to be utilized in our networks in oil and gas exploration regions. The equipment is the primary collateral securing the financing. |
9_INDUSTRY_SEGMENTS
9. INDUSTRY SEGMENTS | 6 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||||||
NOTE 9 - INDUSTRY SEGMENTS | ' | ||||||||||||||||||||||||
This summary reflects the Company's current segments, as described below. | |||||||||||||||||||||||||
Energy Broadband, Inc. (EBI) | |||||||||||||||||||||||||
EBI provides wireless connectivity to rural oil and gas locations primarily via Mobile Broadband Trailers (“MBTs”). EBI provides wireless broadband products and services focusing primarily on commercial customers providing high speed bandwidth to rural North America to serve the oil and gas sector. All sales from external customers are located within the United States. | |||||||||||||||||||||||||
Wireless Bundled Services Division (WBS) | |||||||||||||||||||||||||
WBS provides wireless broadband products and services to commercial and individual customers throughout the wireless industry. The company is in the early stages of building and acquiring a seamless wireless broadband network in certain regions of North America to serve private entities, cities, municipalities and the general public. All sales from external customers are located within the United States. | |||||||||||||||||||||||||
Enterprise Network Services (ENS) | |||||||||||||||||||||||||
ENS provides product and service to operate an enterprise-class encrypted wireless banking network business. Also, ENS provides the CryptoVue System consisting of software, site-based hardware devices and servers to perform network encryption; contracts for the construction, operation, monitoring and maintenance of fixed wireless networks for banking, healthcare and educational customers; trade names, equipment and software, including the software architecture and design. All sales from external customers are located within the United States. | |||||||||||||||||||||||||
For the three and six months ended June 30, 2014 and 2013 (in thousands): | |||||||||||||||||||||||||
Three Months Ended June 30, 2014 | EBI | WBS | ENS | Total Segment | ERF Corporate | Total Consolidated | |||||||||||||||||||
Revenue | $ | 866 | $ | 625 | $ | 144 | $ | 1,635 | $ | – | $ | 1,635 | |||||||||||||
Segment income (loss) from operations | 60 | (82 | ) | 41 | 19 | (578 | ) | (559 | ) | ||||||||||||||||
Total assets | 1,950 | 1,045 | 259 | 3,254 | 341 | 3,595 | |||||||||||||||||||
Capital expenditures | 24 | 5 | – | 29 | – | 29 | |||||||||||||||||||
Depreciation | 192 | 170 | 59 | 421 | 6 | 427 | |||||||||||||||||||
Three Months Ended June 30, 2013 | EBI | WBS | ENS | Total Segment | ERF Corporate | Total Consolidated | |||||||||||||||||||
Revenue | $ | 809 | $ | 597 | $ | 157 | $ | 1,563 | $ | – | $ | 1,563 | |||||||||||||
Segment income (loss) from operations | (128 | ) | (350 | ) | 25 | (453 | ) | (894 | ) | (1,347 | ) | ||||||||||||||
Total assets | 2,857 | 1,690 | 521 | 5,068 | 1,734 | 6,802 | |||||||||||||||||||
Capital expenditures | 186 | 45 | – | 231 | – | 231 | |||||||||||||||||||
Depreciation | 215 | 205 | 59 | 479 | 8 | 487 | |||||||||||||||||||
Six Months Ended June 30, 2014 | EBI | WBS | ENS | Total Segment | ERF Corporate | Total Consolidated | |||||||||||||||||||
Revenue | $ | 1,754 | $ | 1,259 | $ | 213 | $ | 3,226 | $ | – | $ | 3,226 | |||||||||||||
Segment income (loss) from operations | 65 | (226 | ) | 16 | (145 | ) | (1,118 | ) | (1,263 | ) | |||||||||||||||
Total assets | 1,950 | 1,045 | 259 | 3,254 | 341 | 3,595 | |||||||||||||||||||
Capital expenditures | 26 | 32 | – | 58 | – | 58 | |||||||||||||||||||
Depreciation | 387 | 343 | 117 | 847 | 13 | 860 | |||||||||||||||||||
Six Months Ended June 30, 2013 | EBI | WBS | ENS | Total Segment | ERF Corporate | Total Consolidated | |||||||||||||||||||
Revenue | $ | 2,014 | $ | 1,208 | $ | 255 | $ | 3,477 | $ | – | $ | 3,477 | |||||||||||||
Segment income (loss) from operations | (19 | ) | (672 | ) | 5 | (686 | ) | (1,801 | ) | (2,487 | ) | ||||||||||||||
Total assets | 2,857 | 1,690 | 521 | 5,068 | 1,734 | 6,802 | |||||||||||||||||||
Capital expenditures | 196 | 105 | – | 301 | 15 | 316 | |||||||||||||||||||
Depreciation | 430 | 412 | 117 | 959 | 17 | 976 | |||||||||||||||||||
Reconciliation of Segment Assets to Total Assets | 30-Jun-14 | 31-Dec-13 | |||||||||||||||||||||||
Total segment assets | $ | 3,254 | $ | 5,989 | |||||||||||||||||||||
Total corporate assets | 341 | (917 | ) | ||||||||||||||||||||||
Total assets | $ | 3,595 | $ | 5,072 | |||||||||||||||||||||
The Company evaluates the performance of its operating segments based on income before net interest expense, income taxes, depreciation expense, accounting changes and non-recurring items. | |||||||||||||||||||||||||
For the six months ended June 30, 2014, two customers accounted for $976,000 and $345,000 of EBI revenues each. |
10_SUBSEQUENT_EVENTS
10. SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
NOTE 10 - SUBSEQUENT EVENTS | ' |
Subsequent to June 30, 2014, the Company issued 3,841,408 shares of common stock valued at approximately $289,000 for preferred stock, services rendered, and conversion of debt. | |
Subsequent to June 30, 2014, Union Capital LLC, issued a convertible promissory note to ERF Wireless Inc. on August 4, 2014, the Company entered into a twelve-month unsecured convertible promissory note debt financing agreement for $50,000, bearing interest at a rate of 10% per annum and maturing August 15, 2015. The Company will pay principal and interest due on the note before or on the maturity date. The holder may require the Company to convert the outstanding principal balance (including any unpaid interest) into shares of common stock without a legend at any time after 180 days following the date of this note. The common stock issued will be valued using a conversion factor of 55% multiplied by the lowest daily closing bid price for the (15) trading days prior to the conversion date. | |
Subsequent to June 30, 2014, Adar Bays LLC, issued a convertible promissory note to ERF Wireless Inc. on August 04, 2014, the Company entered into a twelve-month unsecured convertible promissory note debt financing agreement for $50,000, bearing interest at a rate of 10% per annum and maturing August 04, 2015. The Company will pay principal and interest due on the note before or on the maturity date. The holder may require the Company to convert the outstanding principal balance (including any unpaid interest) into shares of common stock without a legend at any time after 180 days following the date of this note. The common stock issued will be valued using a conversion factor of 55% multiplied by the lowest daily closing bid price for the (15) trading days prior to the conversion date. | |
Subsequent to June 30, 2014, KBM World Wide Inc. issued a convertible promissory note to ERF Wireless Inc. on August 13, 2014, the Company entered into a nine-month unsecured convertible promissory note debt financing agreement for $53,000, bearing interest at a rate of 8% per annum and maturing May 15, 2015. The holder may require the Company to convert the outstanding principal balance (including any unpaid interest) into shares of restricted common stock at any time after 180 days following the date of this note and ending on final payment of the convertible note. The common stock issued will be valued using a conversion factor of 61% multiplied by the lowest three trading prices of the (10) trading days prior to the conversion date, which represents a discount rate of 39%. |
1_BASIS_OF_PRESENTATION_Polici
1. BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Nature of the Company | ' |
Nature of the Company | |
ERF Wireless, Inc. (“Company” or “ERF Wireless”) provides critical infrastructure wireless broadband communications products and services to a broad spectrum of customers in primarily rural oil and gas exploration areas of North America. We also provide high quality broadband services and critical communications services to residential, oil and gas, educational, health care, and regional banks in rural areas utilizing our Company owned and operated wireless networks. As a total comprehensive solutions provider we offer a wide array of critical communications services including high speed broadband, voice over Internet Protocol (VOIP) telephone and facsimile service, and video security. | |
Historically, our revenues have been generated primarily from wireless internet and network construction services. Our Internet revenues have resulted from our offering of broadband and basic communications services to residential and enterprise customers. Our construction revenues typically have consisted of revenues generated from the construction of bank, educational, and healthcare networks and other services associated with providing wireless products and services to the regional banking, educational and healthcare industries. | |
Our internet revenues are recorded in “ERF Wireless Bundled Services, Inc. (WBS)”, revenues from construction of bank, healthcare and educational networks in our “ERF Enterprise Network Services, Inc. (ENS)” and wireless broadband products and services to rural oil and gas locations are recorded in “Energy Broadband, Inc. (EBI)”. Please refer to segment footnote 9 for additional information regarding segment operations. | |
Basis of Accounting | ' |
Basis of Accounting | |
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's annual report for the year ended December 31, 2013 filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for the most recent fiscal year ended December 31, 2013 as reported in form 10-K have been omitted. | |
Noncontrolling Interest | ' |
Non-controlling Interest | |
Non-controlling interest in our majority owned subsidiary EBI, is included in the equity section of the consolidated balance sheets. Non-controlling interest represents 3.63% of the equity of EBI and any transfer of value from ERF to non-controlling interest holders. Non-controlling interest is adjusted for the non-controlling interest holders’ proportionate share of the earnings or losses of EBI. Any excess losses applicable to the non-controlling interests have been and are borne by the Company as there is no obligation of the non-controlling interests to fund any losses in excess of their original investment. There is also no obligation or commitment on the part of the Company to fund operating losses of any subsidiary whether wholly-owned or majority-owned. | |
Reclassification | ' |
Reclassification | |
Certain amounts in the 2013 financial statements have been reclassified to conform to the 2014 financial presentation. These reclassifications have no impact on net loss. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
Management does not anticipate that the recently issued but not yet effective accounting pronouncements will materially impact the Company’s financial condition. |
3_COMMON_STOCK_AND_PREFERRED_S
3. COMMON STOCK AND PREFERRED STOCK (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Equity [Abstract] | ' | ||||
Common Stock | ' | ||||
30-Jun-14 | Supplemental Non-Cash Disclosure | ||||
Professional fees | $ | 121 | |||
Other services rendered | 67 | ||||
Total for services, compensation and interest | $ | 188 | |||
Notes payable, principal | $ | 128 | |||
Line of credit, principal | $ | 415 |
4_EARNINGS_PER_SHARE_Tables
4. EARNINGS PER SHARE (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Computation of basic and diluted earnings per share | ' | ||||||||||||
For the three months ended June 30, 2014 | |||||||||||||
Net loss | Shares | Per-Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Basic EPS: | |||||||||||||
Net loss | $ | (987 | ) | 2,645 | $ | (0.37 | ) | ||||||
Net loss attributable to ERF Wireless, Inc. | $ | (988 | ) | 2,645 | $ | (0.37 | ) | ||||||
For the three months ended June 30, 2013 | |||||||||||||
Net loss | Shares | Per-Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Basic EPS: | |||||||||||||
Net loss | $ | (2,260 | ) | 24 | $ | (94.17 | ) | ||||||
Net loss attributable to ERF Wireless, Inc. | $ | (2,256 | ) | 24 | $ | (94.00 | ) | ||||||
For the six months ended June 30, 2014 | |||||||||||||
Net loss | Shares | Per-Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Basic and diluted EPS: | |||||||||||||
Net loss | $ | (2,038 | ) | 1,521 | $ | (1.34 | ) | ||||||
Net loss attributable to ERF Wireless, Inc. | $ | (2,038 | ) | 1,521 | $ | (1.34 | ) | ||||||
For the six months ended June 30, 2013 | |||||||||||||
Net loss | Shares | Per-Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Basic and diluted EPS: | |||||||||||||
Net loss | $ | (3,913 | ) | 21 | $ | (186.33 | ) | ||||||
Net loss attributable to ERF Wireless, Inc. | $ | (3,912 | ) | 21 | $ | (186.29 | ) |
6_NOTES_PAYABLE_LONGTERM_DEBT_1
6. NOTES PAYABLE, LONG-TERM DEBT AND CAPITAL LEASES (Tables) | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Notes payable, long-term debts and capital leases | ' | ||||||||||||||||||||
Notes payable, long-term debts and capital leases consist of the following as of June 30, 2014 (in thousands): | |||||||||||||||||||||
Terms | Maturity Date | Interest Rate | Gross Balance | Debt Discount | Balance | ||||||||||||||||
Banc leasing, Inc. | $10,660 / Month including interest | 15-Jan | 11.62% | $ | 72 | $ | – | $ | 72 | ||||||||||||
Advantage leasing associates | $8,269 / Month including interest | Various | Various | 71 | – | 71 | |||||||||||||||
Legacy laser services Dallas, LLC | $9,947 / Month including interest | 16-May | 42.00% | 158 | – | 158 | |||||||||||||||
KBM World Wide, Inc. | $103,500 / Month including interest | 15-Mar | 8.00% | 104 | 91 | 13 | |||||||||||||||
Tonaquint | $950,400 / Lump sum payment including interest | Immediately due and payable | 12.00% | 764 | – | 764 | |||||||||||||||
JMJ Financial | $330,000 / Lump sum payment including interest | 14-Mar | 12.00% | 187 | 25 | 162 | |||||||||||||||
Vista capital | $72,600 / Lump sum payment including interest | Immediately due and payable | 12.00% | 64 | – | 64 | |||||||||||||||
Willow creek capital | $293,040 / Lump sum payment including interest | Immediately due and payable | 12.00% | 182 | – | 182 | |||||||||||||||
TCA global line of credit | $149,609 / Month including interest | 14-Jul | 12.00% | 1,007 | 56 | 951 | |||||||||||||||
Group 10 | $157,500 / Month including interest | 14-Jul | 12.00% | 136 | 85 | 51 | |||||||||||||||
Investor financing | $495,000 / Lump sum payment including interest | 14-Apr | 12.00% | 548 | – | 548 | |||||||||||||||
Premium assignment | $2,063 / Month including interest | 14-Sep | 5.68% | 6 | – | 6 | |||||||||||||||
Dakota capital equipment financing | $178,031 / Quarterly including interest | 16-Mar | 12.00% | 1,518 | 6 | 1,512 | |||||||||||||||
E-bond investor notes | 3 years/ Semiannual interest (See below) | Various | 7.50% | 311 | 143 | 168 | |||||||||||||||
Line of credit | 2 years/ Quarterly interest (See below) | 16-Dec | 3.00% | 4,347 | – | 4,347 | |||||||||||||||
Total debt | $ | 9,475 | $ | 406 | 9,069 | ||||||||||||||||
Less current maturities | (3,975 | ) | |||||||||||||||||||
Long-term debt | $ | 5,094 | |||||||||||||||||||
Notes payable, long-term debts and capital leases consist of the following as of December 31, 2013 (in thousands): | |||||||||||||||||||||
Terms | Maturity Date | Interest Rate | Gross Balance | Debt Discount | Balance | ||||||||||||||||
Banc leasing, Inc. | $10,660 / Month including interest | 15-Jan | 11.62% | $ | 130 | $ | – | $ | 130 | ||||||||||||
Advantage leasing associates | $8,269 / Month including interest | Various | Various | 115 | – | 115 | |||||||||||||||
Legacy laser services Dallas, LLC | $9,947 / Month including interest | 16-May | 42.00% | 181 | – | 181 | |||||||||||||||
MP Nexlevel LLC | $7,043 / Month including interest | 14-May | 10.00% | 34 | – | 34 | |||||||||||||||
Tonaquint | $950,400 / Lump sum payment including interest | Immediately due and payable | 12.00% | 793 | – | 793 | |||||||||||||||
JMJ Financial | $330,000 / Lump sum payment including interest | 14-Mar | 12.00% | 232 | 174 | 58 | |||||||||||||||
Vista capital | $72,600 / Lump sum payment including interest | Immediately due and payable | 12.00% | 51 | – | 51 | |||||||||||||||
Willow creek capital | $293,040 / Lump sum payment including interest | Immediately due and payable | 12.00% | 228 | – | 228 | |||||||||||||||
TCA global line of credit | $139,523 / Month including interest | 14-Jul | 12.00% | 1,019 | 104 | 915 | |||||||||||||||
Group 10 | $157,500 / Month including interest | 14-Jul | 12.00% | 157 | 143 | 14 | |||||||||||||||
Investor financing | $495,000 / Lump sum payment including interest | 14-Apr | 12.00% | 473 | – | 473 | |||||||||||||||
Premium assignment | $2,063 / Month including interest | 14-Sep | 5.68% | 18 | – | 18 | |||||||||||||||
Dakota capital equipment financing | $178,031 / Quarterly including interest | 16-Mar | 12.00% | 1,519 | 25 | 1,494 | |||||||||||||||
E-bond investor notes | 3 years/ Semiannual interest (See below) | Various | 7.50% | 311 | 182 | 129 | |||||||||||||||
Line of credit | 2 years/ Quarterly interest (See below) | 16-Dec | 3.00% | 4,281 | – | 4,281 | |||||||||||||||
Total debt | $ | 9,542 | $ | 628 | 8,914 | ||||||||||||||||
Less current maturities | (3,435 | ) | |||||||||||||||||||
Long-term debt | $ | 5,479 | |||||||||||||||||||
Convertible debt activity | ' | ||||||||||||||||||||
Description | KBM World Wide | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value issuances at inception | $ | 103,500 | $ | 91,277 | $ | 194,777 | |||||||||||||||
Fair value issuances during 2014 (debt discount) | (91,277 | ) | – | (91,277 | ) | ||||||||||||||||
Change in fair value | 430 | 865 | 1,295 | ||||||||||||||||||
Fair value at June 30, 2014 | $ | 12,653 | $ | 92,142 | $ | 104,795 | |||||||||||||||
Future minimum lease payments under capital leases | ' | ||||||||||||||||||||
Year Ending December 31, | |||||||||||||||||||||
2014 | $ | 162 | |||||||||||||||||||
2015 | 159 | ||||||||||||||||||||
2016 | 63 | ||||||||||||||||||||
2017 | – | ||||||||||||||||||||
Thereafter | – | ||||||||||||||||||||
Total minimum lease payments | 384 | ||||||||||||||||||||
Less amount representing interest | (83 | ) | |||||||||||||||||||
Present value of net minimum lease payments | 301 | ||||||||||||||||||||
Current maturities of capital lease obligations | (193 | ) | |||||||||||||||||||
Long-term portion of capital lease obligations | $ | 108 | |||||||||||||||||||
E Series Bond Investor Note | ' | ||||||||||||||||||||
Notes payable, long-term debts and capital leases | ' | ||||||||||||||||||||
Description | Bonds | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value at December 31, 2013 | $ | 128,762 | $ | 39,730 | $ | 168,492 | |||||||||||||||
Change in fair value | 39,064 | (32,250 | ) | 6,814 | |||||||||||||||||
Fair value at June 30, 2014 | $ | 167,826 | $ | 7,480 | $ | 175,306 | |||||||||||||||
Tonaquint | ' | ||||||||||||||||||||
Notes payable, long-term debts and capital leases | ' | ||||||||||||||||||||
Description | Tonaquint | Warrant Compound Derivative Liability | Compound Derivative Liability | Total | |||||||||||||||||
Fair value at December 31, 2013 | $ | 793,368 | $ | 96 | $ | 80,569 | $ | 874,033 | |||||||||||||
Change in fair value | – | (93 | ) | (164,693 | ) | (164,786 | ) | ||||||||||||||
Conversions | (28,841 | ) | – | – | (28,841 | ) | |||||||||||||||
Fair value at June 30, 2014 | $ | 764,527 | $ | 3 | $ | (84,124 | ) | $ | 680,406 | ||||||||||||
JMJ | ' | ||||||||||||||||||||
Notes payable, long-term debts and capital leases | ' | ||||||||||||||||||||
Description | JMJ | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value at December 31, 2013 | $ | 58,363 | $ | 134,113 | $ | 192,476 | |||||||||||||||
Change in fair value | 148,706 | (125,422 | ) | 23,284 | |||||||||||||||||
Conversions | (45,372 | ) | – | (45,372 | ) | ||||||||||||||||
Fair value at June 30, 2014 | $ | 161,697 | $ | 8,691 | $ | 170,388 | |||||||||||||||
Willowcreek [Member] | ' | ||||||||||||||||||||
Notes payable, long-term debts and capital leases | ' | ||||||||||||||||||||
Description | Willowcreek | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value at December 31, 2013 | $ | 227,800 | $ | 51,276 | $ | 279,076 | |||||||||||||||
Change in fair value | – | (27,462 | ) | (27,462 | ) | ||||||||||||||||
Conversions | (26,183 | ) | – | (26,183 | ) | ||||||||||||||||
Fair value at June 30, 2014 | $ | 201,617 | $ | 23,814 | $ | 225,431 | |||||||||||||||
Vista Capital | ' | ||||||||||||||||||||
Notes payable, long-term debts and capital leases | ' | ||||||||||||||||||||
Description | Vista | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value at December 31, 2013 | $ | 50,558 | $ | 37,516 | $ | 88,074 | |||||||||||||||
Change in fair value | – | (26,508 | ) | (26,508 | ) | ||||||||||||||||
Conversions | 13,887 | – | 13,887 | ||||||||||||||||||
Fair value at June 30, 2014 | $ | 64,445 | $ | 11,008 | $ | 75,453 | |||||||||||||||
TCA Global | ' | ||||||||||||||||||||
Notes payable, long-term debts and capital leases | ' | ||||||||||||||||||||
Description | TCA Global | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value at December 31, 2013 | $ | 915,440 | $ | 28,716 | $ | 944,156 | |||||||||||||||
Fair value issuances at inception | 161,713 | 12,584 | 174,297 | ||||||||||||||||||
Change in fair value | (126,446 | ) | – | (126,446 | ) | ||||||||||||||||
Fair value at June 30, 2014 | $ | 950,707 | $ | 41,300 | $ | 992,007 | |||||||||||||||
Group 10 Holdings | ' | ||||||||||||||||||||
Notes payable, long-term debts and capital leases | ' | ||||||||||||||||||||
Description | Group 10 | Compound Derivative Liability | Total | ||||||||||||||||||
Fair value at December 31, 2013 | $ | 14,155 | $ | 304,519 | $ | 318,674 | |||||||||||||||
Change in fair value | 58,459 | (258,116 | ) | (199,657 | ) | ||||||||||||||||
Conversions | (21,652 | ) | – | (21,652 | ) | ||||||||||||||||
Fair value at June 30, 2014 | $ | 50,962 | $ | 46,403 | $ | 97,365 |
7_COMMITMENTS_Tables
7. COMMITMENTS (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Future minimum lease payments under non-cancelable operating leases | ' | ||||
Year Ending December 31, | Amount | ||||
2014 | $ | 372 | |||
2015 | 707 | ||||
2016 | 610 | ||||
2017 | 116 | ||||
Thereafter | 9 | ||||
Total | $ | 1,814 | |||
9_INDUSTRY_SEGMENTS_Tables
9. INDUSTRY SEGMENTS (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||||||
Segment Information | ' | ||||||||||||||||||||||||
For the three and six months ended June 30, 2014 and 2013 (in thousands): | |||||||||||||||||||||||||
Three Months Ended June 30, 2014 | EBI | WBS | ENS | Total Segment | ERF Corporate | Total Consolidated | |||||||||||||||||||
Revenue | $ | 866 | $ | 625 | $ | 144 | $ | 1,635 | $ | – | $ | 1,635 | |||||||||||||
Segment income (loss) from operations | 60 | (82 | ) | 41 | 19 | (578 | ) | (559 | ) | ||||||||||||||||
Total assets | 1,950 | 1,045 | 259 | 3,254 | 341 | 3,595 | |||||||||||||||||||
Capital expenditures | 24 | 5 | – | 29 | – | 29 | |||||||||||||||||||
Depreciation | 192 | 170 | 59 | 421 | 6 | 427 | |||||||||||||||||||
Three Months Ended June 30, 2013 | EBI | WBS | ENS | Total Segment | ERF Corporate | Total Consolidated | |||||||||||||||||||
Revenue | $ | 809 | $ | 597 | $ | 157 | $ | 1,563 | $ | – | $ | 1,563 | |||||||||||||
Segment income (loss) from operations | (128 | ) | (350 | ) | 25 | (453 | ) | (894 | ) | (1,347 | ) | ||||||||||||||
Total assets | 2,857 | 1,690 | 521 | 5,068 | 1,734 | 6,802 | |||||||||||||||||||
Capital expenditures | 186 | 45 | – | 231 | – | 231 | |||||||||||||||||||
Depreciation | 215 | 205 | 59 | 479 | 8 | 487 | |||||||||||||||||||
Six Months Ended June 30, 2014 | EBI | WBS | ENS | Total Segment | ERF Corporate | Total Consolidated | |||||||||||||||||||
Revenue | $ | 1,754 | $ | 1,259 | $ | 213 | $ | 3,226 | $ | – | $ | 3,226 | |||||||||||||
Segment income (loss) from operations | 65 | (226 | ) | 16 | (145 | ) | (1,118 | ) | (1,263 | ) | |||||||||||||||
Total assets | 1,950 | 1,045 | 259 | 3,254 | 341 | 3,595 | |||||||||||||||||||
Capital expenditures | 26 | 32 | – | 58 | – | 58 | |||||||||||||||||||
Depreciation | 387 | 343 | 117 | 847 | 13 | 860 | |||||||||||||||||||
Six Months Ended June 30, 2013 | EBI | WBS | ENS | Total Segment | ERF Corporate | Total Consolidated | |||||||||||||||||||
Revenue | $ | 2,014 | $ | 1,208 | $ | 255 | $ | 3,477 | $ | – | $ | 3,477 | |||||||||||||
Segment income (loss) from operations | (19 | ) | (672 | ) | 5 | (686 | ) | (1,801 | ) | (2,487 | ) | ||||||||||||||
Total assets | 2,857 | 1,690 | 521 | 5,068 | 1,734 | 6,802 | |||||||||||||||||||
Capital expenditures | 196 | 105 | – | 301 | 15 | 316 | |||||||||||||||||||
Depreciation | 430 | 412 | 117 | 959 | 17 | 976 | |||||||||||||||||||
Reconciliation of Segment Assets to Total Assets | ' | ||||||||||||||||||||||||
Reconciliation of Segment Assets to Total Assets | 30-Jun-14 | 31-Dec-13 | |||||||||||||||||||||||
Total segment assets | $ | 3,254 | $ | 5,989 | |||||||||||||||||||||
Total corporate assets | 341 | (917 | ) | ||||||||||||||||||||||
Total assets | $ | 3,595 | $ | 5,072 |
2_DEBT_CONVERSION_Details_Narr
2. DEBT CONVERSION (Details Narrative) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Line Of Credit [Member] | ' |
Shares issued in settlement of debt | 2,017,000 |
Value of shares issued in settlement of debt | $415,938 |
Other Debt [Member] | ' |
Shares issued in settlement of debt | 971,052 |
Value of shares issued in settlement of debt | $214,463 |
3_COMMON_STOCK_PREFERRED_STOCK1
3. COMMON STOCK , PREFERRED STOCK AND WARRANTS (Details) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Other services | ' |
Common stock issued for services, value | $67 |
Common stock issued for notes payable, value | 128 |
Common stock issued for line of credit, principal | 415 |
Services and Compensation | ' |
Common stock issued for services, value | 188 |
Professional Fees | ' |
Common stock issued for services, value | $121 |
4_EARNINGS_PER_SHARE_Details
4. EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Earnings Per Share Details | ' | ' | ' | ' |
(Numerator) Net loss | ($987) | ($2,260) | ($2,038) | ($3,913) |
(Numerator) Net loss attributable to ERF Wireless, Inc. | ($988) | ($2,256) | ($2,038) | ($3,912) |
Shares (Denominator) Basic | 2,645 | 24 | ' | ' |
Shares (Denominator) Basic and diluted | ' | ' | 1,521 | 21 |
Shares (Denominator) attributable to ERF Wireless, Inc. Basic and diluted | ' | ' | 1,521 | 21 |
Per-Share Amount Basic | ($0.37) | ($94.17) | ' | ' |
Per-Share Amount Basic and diluted EPS | ($0.37) | ($94.17) | ($1.34) | ($186) |
Per-Share Amount Net loss attributable to ERF Wireless, Inc. Basic and diluted EPS | ($0.37) | ($94.17) | ($1.34) | ($186) |
4_EARNINGS_PER_SHARE_Details_N
4. EARNINGS PER SHARE (Details Narrative) | 6 Months Ended |
Jun. 30, 2014 | |
Bond | ' |
Common Stock shares excluded from computation of Earning Per Share | 2,392,308 |
Warrants | ' |
Common Stock shares excluded from computation of Earning Per Share | 529 |
Convertible Debt | ' |
Common Stock shares excluded from computation of Earning Per Share | 18,796,124 |
Series A Preferred Stock | ' |
Common Stock shares excluded from computation of Earning Per Share | 9,215,129 |
5_MAJOR_CUSTOMERS_Details_Narr
5. MAJOR CUSTOMERS (Details Narrative) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Gross sales | $3,226 | $3,477 |
Revenues | Customer A | ' | ' |
Percentage concentration | 30.00% | 33.00% |
Revenues | Customer B | ' | ' |
Percentage concentration | 11.00% | 12.00% |
6_NOTES_PAYABLE_LONGTERM_DEBT_2
6. NOTES PAYABLE, LONG-TERM DEBT, LINE OF CREDIT AND CAPITAL LEASES (Details) (USD $) | 6 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 | ||
Gross Balance | $9,475 | $9,542 | ||
Debt Discount | 406 | 628 | ||
Total debt balance | 9,069 | 8,914 | ||
Less current maturities | -3,975 | -3,435 | ||
Long-term debt | 5,094 | 5,479 | ||
Premium assignment [Member] | ' | ' | ||
Terms | '$2,063 / Month including interest | '$2,063 / Month including interest | ||
Maturity Date | '14-Sep | '14-Sep | ||
Interest Rate | 5.68% | 5.68% | ||
Gross Balance | 6 | 18 | ||
Debt Discount | 0 | 0 | ||
Total debt balance | 6 | 18 | ||
Banc leasing Inc [Member] | ' | ' | ||
Terms | '$10,660 / Month including interest | '$10,660 / Month including interest | ||
Maturity Date | '15-Jan | '15-Jan | ||
Interest Rate | 11.62% | 11.62% | ||
Gross Balance | 72 | 130 | ||
Debt Discount | 0 | 0 | ||
Total debt balance | 72 | 130 | ||
Advantage leasing associates [Member] | ' | ' | ||
Terms | '$8,269 / Month including interest | '$8,269 / Month including interest | ||
Maturity Date | 'Various | 'Various | ||
Interest Rate | ' | [1] | ' | [1] |
Gross Balance | 71 | 115 | ||
Debt Discount | 0 | 0 | ||
Total debt balance | 71 | 115 | ||
Legacy laser services Dallas, LLC [Member] | ' | ' | ||
Terms | '$9,947 / Month including interest | '$9,947 / Month including interest | ||
Maturity Date | '16-May | '16-May | ||
Interest Rate | 42.00% | 42.00% | ||
Gross Balance | 158 | 181 | ||
Debt Discount | 0 | 0 | ||
Total debt balance | 158 | 181 | ||
KBM World Wide, Inc. | ' | ' | ||
Terms | '$103,500 / Month including interest | ' | ||
Maturity Date | '15-Mar | ' | ||
Interest Rate | 8.00% | ' | ||
Gross Balance | 104 | ' | ||
Debt Discount | 91 | ' | ||
Total debt balance | 13 | ' | ||
Tonaquint | ' | ' | ||
Terms | '$950,400 / Lump sum payment including interest | '$950,400 / Lump sum payment including interest | ||
Maturity Date | 'Immediately due and payable | 'Immediately due and payable | ||
Interest Rate | 12.00% | 12.00% | ||
Gross Balance | 764 | 793 | ||
Debt Discount | 0 | 0 | ||
Total debt balance | 764 | 793 | ||
JMJ | ' | ' | ||
Terms | '$330,000 / Lump sum payment including interest | '$330,000 / Lump sum payment including interest | ||
Maturity Date | '14-Mar | '14-Mar | ||
Interest Rate | 12.00% | 12.00% | ||
Gross Balance | 187 | 232 | ||
Debt Discount | 25 | 174 | ||
Total debt balance | 162 | 58 | ||
Vista Capital | ' | ' | ||
Terms | '$72,600 / Lump sum payment including interest | '$72,600 / Lump sum payment including interest | ||
Maturity Date | 'Immediately due and payable | 'Immediately due and payable | ||
Interest Rate | 12.00% | 12.00% | ||
Gross Balance | 64 | 51 | ||
Debt Discount | 0 | 0 | ||
Total debt balance | 64 | 51 | ||
Willow creek capital [Member] | ' | ' | ||
Terms | '$293,040 / Lump sum payment including interest | '$293,040 / Lump sum payment including interest | ||
Maturity Date | 'Immediately due and payable | 'Immediately due and payable | ||
Interest Rate | 12.00% | 12.00% | ||
Gross Balance | 182 | 228 | ||
Debt Discount | 0 | 0 | ||
Total debt balance | 182 | 228 | ||
TCA global line of credit [Member] | ' | ' | ||
Terms | '$149,609 / Month including interest | '$139,523 / Month including interest | ||
Maturity Date | '14-Jul | '14-Jul | ||
Interest Rate | 12.00% | 12.00% | ||
Gross Balance | 1,007 | 1,019 | ||
Debt Discount | 56 | 104 | ||
Total debt balance | 951 | 915 | ||
Group 10 Holdings | ' | ' | ||
Terms | '$157,500 / Month including interest | '$157,500 / Month including interest | ||
Maturity Date | '14-Jul | '14-Jul | ||
Interest Rate | 12.00% | 12.00% | ||
Gross Balance | 136 | 157 | ||
Debt Discount | 85 | 143 | ||
Total debt balance | 51 | 14 | ||
Investor Financing Member | ' | ' | ||
Terms | '$495,000 / Lump sum payment including interest | '$495,000 / Lump sum payment including interest | ||
Maturity Date | '14-Apr | '14-Apr | ||
Interest Rate | 12.00% | 12.00% | ||
Gross Balance | 548 | 473 | ||
Debt Discount | 0 | 0 | ||
Total debt balance | 548 | 473 | ||
Dakota capital equipment financing | ' | ' | ||
Terms | '$178,031 / Quarterly including interest | '$178,031 / Quarterly including interest | ||
Maturity Date | '16-Mar | '16-Mar | ||
Interest Rate | 12.00% | 12.00% | ||
Gross Balance | 1,518 | 1,519 | ||
Debt Discount | 6 | 25 | ||
Total debt balance | 1,512 | 1,494 | ||
E-bond investor notes [Member] | ' | ' | ||
Terms | '3 years/ Semiannual interest (See below) | '3 years/ Semiannual interest (See below) | ||
Maturity Date | 'Various | 'Various | ||
Interest Rate | 7.50% | 7.50% | ||
Gross Balance | 311 | 311 | ||
Debt Discount | 143 | 182 | ||
Total debt balance | 168 | 129 | ||
Line Of Credit [Member] | ' | ' | ||
Terms | '2 years/ Quarterly interest (See below) | '2 years/ Quarterly interest (See below) | ||
Maturity Date | '16-Dec | '16-Dec | ||
Interest Rate | 3.00% | 3.00% | ||
Gross Balance | 4,347 | 4,281 | ||
Debt Discount | 0 | 0 | ||
Total debt balance | 4,347 | 4,281 | ||
MP Nexlevel LLC | ' | ' | ||
Terms | ' | '$7,043 / Month including interest | ||
Maturity Date | ' | '14-May | ||
Interest Rate | ' | 10.00% | ||
Gross Balance | ' | 34 | ||
Debt Discount | ' | 0 | ||
Total debt balance | ' | $34 | ||
[1] | Various |
6_NOTES_PAYABLE_LONGTERM_DEBT_3
6. NOTES PAYABLE, LONG-TERM DEBT, LINE OF CREDIT AND CAPITAL LEASES (Details 1) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
E-Series Bond Investor Note | ' |
Fair value, beginning balance | $128,762 |
Change in fair value | 39,064 |
Fair value, ending balance | 167,826 |
Bond Compound Derivative Liability | ' |
Fair value, beginning balance | 39,730 |
Change in fair value | -32,250 |
Fair value, ending balance | 7,480 |
Bonds Total | ' |
Fair value, beginning balance | 168,492 |
Change in fair value | 6,814 |
Fair value, ending balance | $175,306 |
6_NOTES_PAYABLE_LONGTERM_DEBT_4
6. NOTES PAYABLE, LONG-TERM DEBT, LINE OF CREDIT AND CAPITAL LEASES (Details 2) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Tonaquint | ' |
Fair value, beginning balance | $793,368 |
Change in fair value | 0 |
Conversions | -28,841 |
Fair value, ending balance | 764,527 |
Tonaquint Warrant Compound Derivative Liability | ' |
Fair value, beginning balance | 96 |
Change in fair value | -93 |
Conversions | 0 |
Fair value, ending balance | 3 |
Tonaquint Compound Derivative Liability | ' |
Fair value, beginning balance | 80,569 |
Change in fair value | -164,693 |
Conversions | 0 |
Fair value, ending balance | -84,124 |
Total Tonaquint | ' |
Fair value, beginning balance | 874,033 |
Change in fair value | -164,786 |
Conversions | -28,841 |
Fair value, ending balance | $680,406 |
6_NOTES_PAYABLE_LONGTERM_DEBT_5
6. NOTES PAYABLE, LONG-TERM DEBT AND CAPITAL LEASES (Details 3) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
JMJ | ' |
Fair value, beginning balance | $58,363 |
Change in fair value | 148,706 |
Conversions | -45,372 |
Fair value, ending balance | 161,697 |
JMJ Compound Derivative Liability | ' |
Fair value, beginning balance | 134,113 |
Change in fair value | -125,422 |
Conversions | 0 |
Fair value, ending balance | 8,691 |
JMJ Total | ' |
Fair value, beginning balance | 192,476 |
Change in fair value | 23,284 |
Conversions | -45,372 |
Fair value, ending balance | $170,388 |
6_NOTES_PAYABLE_LONGTERM_DEBT_6
6. NOTES PAYABLE, LONG-TERM DEBT AND CAPITAL LEASES (Details 4) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Willowcreek | ' |
Fair value, beginning balance | $227,800 |
Change in fair value | 0 |
Conversions | -26,183 |
Fair value, ending balance | 201,617 |
Willowcreek Compound Derivative Liability | ' |
Fair value, beginning balance | 51,276 |
Change in fair value | -27,462 |
Conversions | 0 |
Fair value, ending balance | 23,814 |
Willowcreek Total | ' |
Fair value, beginning balance | 279,076 |
Change in fair value | -27,462 |
Conversions | -26,183 |
Fair value, ending balance | $225,431 |
6_NOTES_PAYABLE_LONGTERM_DEBT_7
6. NOTES PAYABLE, LONG-TERM DEBT AND CAPITAL LEASES (Details 5) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Vista Capital | ' |
Fair value, beginning balance | $50,558 |
Change in fair value | 0 |
Conversions | 13,887 |
Fair value, ending balance | 64,445 |
Vista Compound Derivative Liability | ' |
Fair value, beginning balance | 37,516 |
Change in fair value | -26,508 |
Conversions | 0 |
Fair value, ending balance | 11,008 |
Vista Total | ' |
Fair value, beginning balance | 88,074 |
Change in fair value | -26,508 |
Conversions | 13,887 |
Fair value, ending balance | $75,453 |
6_NOTES_PAYABLE_LONGTERM_DEBT_8
6. NOTES PAYABLE, LONG-TERM DEBT AND CAPITAL LEASES (Details 6) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
TCA Global | ' |
Fair value, beginning balance | $915,440 |
Fair value issuances at inception | 161,713 |
Change in fair value | -126,446 |
Fair value, ending balance | 950,707 |
TCA Compound Derivative Liability | ' |
Fair value, beginning balance | 28,716 |
Fair value issuances at inception | 12,584 |
Change in fair value | 0 |
Fair value, ending balance | 41,300 |
TCA Total | ' |
Fair value, beginning balance | 944,156 |
Fair value issuances at inception | 174,297 |
Change in fair value | -126,446 |
Fair value, ending balance | $992,007 |
6_NOTES_PAYABLE_LONGTERM_DEBT_9
6. NOTES PAYABLE, LONG-TERM DEBT AND CAPITAL LEASES (Details 7) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Group 10 | ' |
Fair value, beginning balance | $14,155 |
Fair value issuances at inception | 58,459 |
Change in fair value | -21,652 |
Fair value, ending balance | 50,962 |
Group 10 Compound Derivative Liability | ' |
Fair value, beginning balance | 304,519 |
Fair value issuances at inception | -258,116 |
Change in fair value | 0 |
Fair value, ending balance | 46,403 |
Group 10 Total | ' |
Fair value, beginning balance | 318,674 |
Fair value issuances at inception | -199,657 |
Change in fair value | -21,652 |
Fair value, ending balance | $97,365 |
Recovered_Sheet1
6. NOTES PAYABLE, LONG-TERM DEBT AND CAPITAL LEASES (Details 8) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
KBM World Wide | ' |
Fair value, beginning balance | $103,500 |
Fair value issuances during 2014 (debt discount) | -91,277 |
Change in fair value | 430 |
Fair value, ending balance | 12,653 |
Compound Derivative Liability | ' |
Fair value, beginning balance | 91,277 |
Fair value issuances during 2014 (debt discount) | 0 |
Change in fair value | 865 |
Fair value, ending balance | 92,142 |
KBM Total | ' |
Fair value, beginning balance | 194,777 |
Fair value issuances during 2014 (debt discount) | -91,277 |
Change in fair value | 1,295 |
Fair value, ending balance | $104,795 |
Recovered_Sheet2
6. NOTES PAYABLE, LONG-TERM DEBT AND CAPITAL LEASES (Details 9) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Debt Disclosure [Abstract] | ' |
2014 | $162 |
2015 | 159 |
2016 | 63 |
2016 | 0 |
Thereafter | 0 |
Total minimum lease payments | 384 |
Less amount representing interest | -83 |
Present value of net minimum lease payments | 301 |
Current maturities of capital lease obligations | -193 |
Long-term portion of capital lease obligations | $108 |
7_COMMITMENTS_Details
7. COMMITMENTS (Details) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | ' |
2014 | $372 |
2015 | 707 |
2016 | 610 |
2017 | 116 |
Thereafter | 9 |
Total | $1,814 |
7_COMMITMENTS_Details_Narrativ
7. COMMITMENTS (Details Narrative) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2013 | Jun. 30, 2014 |
KBM Total | ||
Rental expenses | $596 | $586 |
8_RELATED_PARTY_TRANSACTIONS_D
8. RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | Jun. 30, 2014 |
Related Party Transactions [Abstract] | ' |
Outstanding balance on the capital leases | $158,000 |
Captial lease payments | $9,947 |
Interest Rate | 42.00% |
9_INDUSTRY_SEGMENTS_Details
9. INDUSTRY SEGMENTS (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Revenue | $1,635 | $1,563 | $3,226 | $3,477 | ' |
Income (loss) from continuing operations | -559 | -1,347 | -1,263 | -2,487 | ' |
Total assets | 3,595 | 6,802 | 3,595 | 6,802 | 5,072 |
Capital expenditures | 29 | 231 | ' | 316 | ' |
Depreciation | 427 | 487 | 860 | 976 | ' |
EBI | ' | ' | ' | ' | ' |
Revenue | 866 | 809 | 1,754 | 2,014 | ' |
Income (loss) from continuing operations | 60 | -128 | 65 | -19 | ' |
Total assets | 1,950 | 2,857 | 1,950 | 2,857 | ' |
Capital expenditures | 24 | 186 | 26 | 196 | ' |
Depreciation | 192 | 215 | 387 | 430 | ' |
WBS | ' | ' | ' | ' | ' |
Revenue | 625 | 597 | 1,259 | 1,208 | ' |
Income (loss) from continuing operations | -82 | -350 | -226 | -672 | ' |
Total assets | 1,045 | 1,690 | 1,045 | 1,690 | ' |
Capital expenditures | 5 | 45 | 32 | 105 | ' |
Depreciation | 170 | 205 | 343 | 412 | ' |
ENS | ' | ' | ' | ' | ' |
Revenue | 144 | 157 | 213 | 255 | ' |
Income (loss) from continuing operations | 41 | 25 | 16 | 5 | ' |
Total assets | 259 | 521 | 259 | 521 | ' |
Capital expenditures | 0 | 0 | 0 | 0 | ' |
Depreciation | 59 | 59 | 117 | 117 | ' |
Total Segment | ' | ' | ' | ' | ' |
Revenue | 1,635 | 1,563 | 3,226 | 3,477 | ' |
Income (loss) from continuing operations | 19 | -453 | -145 | -686 | ' |
Total assets | 3,254 | 5,068 | 3,254 | 5,068 | 5,989 |
Capital expenditures | 29 | 231 | 58 | 301 | ' |
Depreciation | 421 | 479 | 847 | 959 | ' |
ERF Corporate | ' | ' | ' | ' | ' |
Revenue | 0 | 0 | 0 | 0 | ' |
Income (loss) from continuing operations | -578 | -894 | -1,118 | -1,801 | ' |
Total assets | 341 | 1,734 | 341 | 1,734 | -917 |
Capital expenditures | 0 | 0 | 0 | 15 | ' |
Depreciation | $6 | $8 | $13 | $17 | ' |
9_INDUSTRY_SEGMENTS_Details_1
9. INDUSTRY SEGMENTS (Details 1) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | |||
Total assets | $3,595 | $5,072 | $6,802 |
Total Segment | ' | ' | ' |
Total assets | 3,254 | 5,989 | 5,068 |
ERF Corporate | ' | ' | ' |
Total assets | $341 | ($917) | $1,734 |