U.S.
SECURITIES AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 Form
10-QSB
 
 Quarterly
Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934
 
 For the
quarterly period ended March 31, 2007
 
 Commission
File No. 000-26213
 
 ROOMLINX,
INC.
 
 (Exact
name of small business issuer as specified in its charter)
   Nevada
              83-0401552(State
      or other jurisdiction of
              (I.R.S.
      Employerincorporation
      or organization)
              Identification
      No.)
 
 2150 – W.
6th
Ave., Unit H Broomfield, Colorado 80020
 (Address
of principal executive offices)
 
 (303)
544-1111
 (Issuer's
telephone number)
  
 Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes o No x
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  Yes o No x
 The
number of shares outstanding of the Issuer's common stock as of September 2,
2008 was 157,065,781.
 
 Transitional
Small Business Disclosure Format (Check one): o Yes  x No
  
 
  ROOMLINX,
INC.
 
 
 INDEXPART I.
              FINANCIAL INFORMATIONItem
      1.
              Financial
      Statements (Unaudited)Consolidated Balance Sheet as of March 31,
      2007Consolidated Statements of Operations for the
      Three Months Ended March 31, 2007 and 2006Consolidated Statements of Cash Flows for the Three
      Months Ended March 31, 2007 and 2006Notes to Consolidated Financial
    StatementsItem
      2.
              Management's Discussion and Analysis of Financial Condition
      and Results of OperationsGeneralForward-Looking
StatementsResults of OperationsLiquidity and Capital ResourcesItem
      3.
              Controls and ProceduresPART II.
              OTHER INFORMATIONItem
      2.
              Unregistered Sales of Equity Securities and Use of
      ProceedsItem
      6.
              ExhibitsSignatures
 
 
 Index
 
 
 PART I.  FINANCIAL INFORMATION
  
 
 Index
 
 RoomLinX, Inc.CONSOLIDATED BALANCE
      SHEETMarch
      31, 2007(Unaudited)ASSETS
                
                2007Current
      assets:Cash
      and cash equivalents
                
                $
                3,873Accounts
      receivable, net
                
                
                473,796Prepaid
      and other current assets
                
                
                26,865Work
      in progress
                
                
                3,918Total
      current assets
                
                
                508,452Property
      and equipment, net
                
                
                10,752Total
      assets
                
                $
                519,204LIABILITIES AND
      STOCKHOLDERS' (DEFICIT)Current
      liabilities:Accounts
      payable and accrued expenses
                
                $
                486,505Convertible
      debentures
                
                
                1,100,000Notes
      payable, net of discount
                
                
                222,500Officer
      and stockholder notes payable
                
                
                262,500Accrued
      interest and penalties
                
                
                561,745Obligations
      under capital lease
                
                
                418,418Deferred
      revenue
                
                
                336,924Total
      current liabilities
                
                
                3,388,592Stockholders'
      (deficit):Preferred
      stock - $0.20 stated value, 5,000,000 shares authorized:720,000
      shares issued and outstanding
                
                
                144,000Common
      stock - $0.001 par value, 245,000,000 shares authorized:139,868,381
      shares issued and outstanding
                
                
                139,868Additional
      paid-in capital
                
                
                19,135,567Deferred
      Compensation - Equity
                
                
                (73,631
                )Accumulated
      (deficit)
                
                
                (22,215,192
                )Total
      stockholders' (deficit)
                
                
                (2,869,388
                )Total
      liabilities and stockholders' (deficit)
                
                $
                519,204
   The
accompanying notes are an integral part of these consolidated financial
statements.
 
 Index
   RoomLinX, Inc.CONSOLIDATED
      STATEMENTS OF OPERATIONSfor
      the Three Months Ended March 31, 2007 and 2006(Unaudited)2007
                
                
                2006RevenuesSystem
      sales and installation
                
                $
                165,481
                
                
                $
                228,009Service,
      maintenance and usage
                
                
                344,821
                
                
                
                371,714510,302
                
                
                
                599,723Costs
      and expensesSystem
      sales and installation
                
                
                107,922
                
                
                
                106,510Service,
      maintenance and usage
                
                
                321,540
                
                
                
                210,953Sales
      and marketing
                
                
                47,302
                
                
                
                39,868General
      and administrative
                
                
                132,562
                
                
                
                80,893Depreciation
                
                
                2,029
                
                
                
                11,482611,355
                
                
                
                449,706Operating
      income (loss)
                
                
                (101,053
                )
                
                
                150,017Other
      income (expenses)Interest
      expense
                
                
                (95,981
                )
                
                
                (95,726
                )Financing
      expense
                
                
                (37,500
                )
                
                
                -Foreign
      currency gain (loss)
                
                
                (5,866
                )
                
                
                16,510Other
      expense
                
                
                (4,341
                )
                
                
                (382
                )Income
      from discharge of indebtedness
                
                
                12,897
                
                
                
                162,067(130,791
                )
                
                
                82,469Income
      (loss) before income taxes
                
                
                (231,844
                )
                
                
                232,486Provision
      for income taxes
                
                
                -
                
                
                
                -Net
      income (loss)
                
                $
                (231,844
                )
                
                $
                232,486Net
      income (loss) per common share:Basic
                
                $
                (0.00
                )
                
                $
                0.00Diluted
                
                $
                (0.00
                )
                
                $
                0.00Weighted
      average shares outstanding:Basic
                
                
                139,868,381
                
                
                
                132,868,381Diluted
                
                
                139,868,381
                
                
                
                178,066,096
  The
accompanying notes are an integral part of these consolidated financial
statements.
 
 Index
   RoomLinX, Inc.CONSOLIDATED
      STATEMENTS OF CASH FLOWSfor
      the Three Months Ended March 31, 2007 and 2006(Unaudited)2007
                
                
                2006Cash
      flows from operating activities:Net
      cash (used in) operating activities
                
                $
                (95,564
                )
                
                $
                (62,607
                )Cash
      flows from investing activities:Net
      cash provided by investing activities
                
                
                -
                
                
                
                -Cash
      flows from financing activities:Principal
      payments on notes payable
                
                
                (30,000
                )
                
                
                (40,000
                )Principal
      payments on stckholder notes payable
                
                
                (15,103
                )Net
      cash (used in) provided by financing activities
                
                
                (45,103
                )
                
                
                (40,000
                )Net
      increase (decrease) in cash and equivalents
                
                
                (140,667
                )
                
                
                (102,607
                )Cash
      and equivalents at beginning of period
                
                
                144,540
                
                
                
                180,756Cash
      and equivalents at end of period
                
                $
                3,873
                
                
                $
                78,149Supplemental
      Cash Flow InformationInterest
      paid
                
                $
                3,016
                
                
                $
                6,932
   The
accompanying notes are an integral part of these consolidated financial
statements.
 
 Index
   ROOMLINX, INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 March
31, 2007
 (Unaudited)
 
 
 1.
              Overview
      and Summary of Significant Accounting
Policies
  Basis of
Presentation:    The accompanying unaudited financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial
information.  They do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements.  In the opinion of
management, all adjustments, consisting only of normal recurring adjustments
considered necessary for a fair presentation, have been included in the
accompanying unaudited financial statements.  Operating results for
the periods presented are not necessarily indicative of the results that may be
expected for the full year.  For further information, refer to the
financial statements and notes thereto, included in the Company's Form 10-KSB as
of and for the year ended December 31, 2006.
 
 Per Share
Amounts:    The Company computes net income (loss)
per share under the provisions of SFAS No. 128, “Earnings per Share” (SFAS
128).  Under the provisions of SFAS 128, basic net income (loss) per
share is computed by dividing the Company’s net income (loss) for the period by
the weighted-average number of shares of common stock outstanding during the
period.  Diluted net income (loss) per share excludes potential common
shares if the effect is anti-dilutive.  Diluted net income (loss) per
share is determined in the same manner as basic net income (loss) per share
except that the number of shares is increased assuming exercise of dilutive
stock options and warrants using the treasury stock method and shares issuable
upon conversion of convertible debt and adding back to net income (loss) the
related interest expense.
  2.
              Going
      Concern
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. However, the Company has incurred
significant operating losses since its inception and, as of March 31, 2007, had
a working capital deficit of $2,880,140, an accumulated deficit of $22,215,192,
and a stockholders' deficit of $2,869,388.  These conditions, among
others, raise substantial doubt about the Company’s ability to continue as a
going concern.  Management has evaluated the Company's alternatives to
enable it to pay its liabilities as they become due and payable, reduce
operating losses and obtain additional or new financing in order to advance its
business plan.  Additional alternatives being considered by management
include obtaining financing from new lenders and the issuance of additional
equity. Additionally, the Company has implemented cost reduction measures to
reduce operating costs and improve profitability.  There can be no
assurance that management will be successful in its efforts.
 
 The
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amount
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
  3.
              Convertible
      Debentures
 
 On March
3, 2005, the Company completed a privately placed bridge financing of
convertible debentures (“Debentures”) and warrants.  The Debentures
were issued in the aggregate principal amount of $1,100,000 to 17 investors;
bear interest at 11% per annum; and are due on the earlier of September 2, 2005,
or the date that the Company completes a subsequent financing with gross cash
proceeds of at least $1,000,000. The Debentures are convertible prior to
maturity into a maximum of 15,473,332 shares of the Company’s common stock,
based upon a conversion price equal to $0.075 per share of common stock,
including accrued interest through maturity.
 
 The
Company was unable to retire the Debentures as scheduled on September 2, 2005
and was in default of the repayment terms.  In June 2007, all interest
and penalties were forgiven and the debentures were settled for
$550,000.
 
 
 Index
   4.
              Stockholders'
      (Deficit)
  Preferred
Stock:   The Company has authorized 5,000,000
preferred shares with a $0.20 par value.  The designation of the class
of preferred shares is Class A Preferred Stock.  The preferred stock
is entitled to receive cumulative annual dividends at the rate of 9%, payable in
either cash or additional shares of Class A Preferred Stock, at the option of
the Company.  As of March 31, 2007, there were 720,000 shares of
preferred stock issued and outstanding.  Dividends accrued and unpaid
as of March 31, 2007 were $110,640.
 
 Common
Stock:   The Company has authorized 245,000,000
shares of $0.001 par value common stock.  As of March 31, 2007, there
were 139,868,381 shares of common stock issued and outstanding.
 
 Warrants:  On
December 28, 2006, the Company issued warrants to purchase 3,900,000 shares of
common stock in connection with three bridge notes.  These warrants
have an exercise price of $0.03 per share and expire five years from the date of
issue.  The Company recorded a debt discount of $150,000 in connection
with these warrants, which is being amortized over the term of the related
debt.  The company recorded $37,500 in amortization during the three
months ended March 31, 2007.
  Outstanding
      and Exercisable WarrantsExercise
      Price
              
              
              Number
      of
                Shares
              
              
              Remaining
                Contractual
      Life
                (in
      years)
              
              
              Exercise
      Price
                times
      Number
                of
      Shares
              
              
              Weighted
                Average
                Exercise
      Price$0.010
              
              
              
              350,000
              
              
              <1
              
              
              $
              35,000$0.075
              
              
              
              10,963,333
              
              
              3
              
              
              
              822,250$0.030
              
              
              
              3,900,000
              
              
              5
              
              
              
              117,00015,213,333
              
              
              
              
              
              $
              974,250
              
              
              $
              0.064
 
 
 Warrants
              
              Number
      of
                Shares
              
              
              WeightedAverage
                Exercise
      PriceOutstanding
      at January 1, 2007
              
              
              22,880,000
              
              
              $
              0.093Issued
              
              
              ---
              
              
              
              -----Exercised
              
              
              -----
              
              
              
              -----Expired
      / Cancelled
              
              
              (7,666,667
              )
              
              
              0.150Outstanding
      at March 31, 2007
              
              
              15,213,333
              
              
              $
              0.064
 
 
 Options:   In
conjunction with the ARC merger, the Company adopted a long term incentive stock
option plan (the "Stock Option Plan"). The Stock Option Plan provides for the
issuance of 25,000,000 shares of common stock upon exercise of options which may
be granted pursuant to the Stock Option Plan. As of March 31, 2007, options to
purchase 21,500,000 shares were outstanding and 3,500,000 shares are available
for future grants of options. The options vest as determined by the Board of
Directors and are exercisable for a period of no more than 10
years.
  Outstanding
      Stock OptionsExercise
      Price
              
              
              Number
      of
                Shares
              
              
              Remaining
                Contractual
      Life
                (in
      years)
              
              
              Exercise
      Price
                times
      Number
                of
      Shares
              
              
              Weighted
                Average
                Exercise
      Price$0.080
              
              
              
              500,000
              
              
              <1
              
              
              $
              40,000$0.010
              
              
              
              4,000,000
              
              
              5
              
              
              
              40,000$0.100
              
              
              
              1,000,000
              
              
              2
              
              
              
              100,000$0.020
              
              
              
              15,000,000
              
              
              8
              
              
              
              300,000$0.026
              
              
              
              1,000,000
              
              
              8
              
              
              
              26,00021,500,000
              
              
              
              
              
              $
              506,000
              
              
              $
              0.024
 
 
 Index
 
 Options
              
              Number
      of
                Shares
              
              
              Weighted
      Average Exercise PriceOutstanding
      at December 31, 2006
              
              
              24,400,000
              
              
              $
              0.025Granted
              
              
              -
              
              
              
              -Exercised
              
              
              -
              
              
              
              -Expired
              
              
              (2,900,000
              )
              
              
              0.0152Outstanding
      at March 31, 2007
              
              
              21,500,000
              
              
              $
              0.024
 
 5.
              Subsequent
      Events
 
 On
February 8, 2007, Mr. Woody McGee was appointed as a member of our Board of
Directors.  Effective October 12, 2007, Mr. McGee resigned from our
Board of Directors.
 
 In May
2007, the Company granted under our Long-Term Incentive Plan, an aggregate of
2,000,000 Non-Qualified Stock Options (“NQOs”).  500,000 of the NQOs
were granted to each of Woody McGee, Peter Bordes and Herbert Hunt with respect
to their service as members of the Board of Directors during 2007 and vested on
December 31, 2007.  Woody McGee did not complete the year of service
and his 500,000 options expired upon his resignation date of October 12, 2007.
500,000 of the NQOs were granted to John McClure with respect to his service as
a consultant for 2007 and vested on December 31, 2007.  John McClure
did not complete his year of service and his 500,000 options expired upon his
resignation date of August 31, 2007.  All of these options were issued
at an exercise price of $0.025 per share, representing the closing price of the
Company’s common stock on such date.
  On June
11, 2007, we reached agreement with certain of our debt holders whereby we
repaid and canceled all prior existing indebtedness (other than bank debt) at a
fifty percent (50%) discount to the outstanding principal amount of such
indebtedness.  The total outstanding principal amount of such
indebtedness immediately prior to such repayment and cancellation was
$1,455,000.  This indebtedness included the following
transactions:
  1.
              The
      March 3, 2005 private placement bridge financing of $1,100,000; all
      penalties and interest were waived and the Company settled for
      $550,000.2.
              Officer
      and stockholder notes issued from November 2004 through January 2005
      having an outstanding principal balance of $262,500; all outstanding
      penalties and interest were waived and the Company settled for
      $135,000.3.
              During
      2005, the Company borrowed $75,000 from an individual.  The
      borrowing bore interest at 10% and was due on
      demand.  Subsequent to March 31, 2007, the Company negotiated a
      settlement of this borrowing arrangement and repaid $37,500 in full
      satisfaction of its outstanding balance including all outstanding interest
      owed.
 
 On June
11, 2007 and June 13, 2007, we sold an aggregate of $2,350,000 principal amount
of Convertible Debentures due May 2012 (the “Convertible Debentures”) to a
number of investors in reliance on Section 4(2) of the Securities Act, and
pursuant to a Securities Purchase Agreement with certain investors (the “June
Purchase Agreement”).
 
 The
Convertible Debentures are initially convertible into Series B Preferred Stock,
which Series B Preferred Stock will not be convertible into Common Stock until
such time as the Company has sufficient number of shares of Common Stock
authorized to permit the conversion of the Convertible Debentures into Common
Stock, at which time the Convertible Debentures will automatically be
convertible into Common Stock and not Series B Preferred Stock.  The
ultimate conversion price into shares of Common Stock of the Convertible
Debentures is $0.02 per share, subject to certain restrictions contained in the
Convertible Debentures.
  
 Index
   Pursuant
to the June Purchase Agreement, each purchaser also received an option,
exercisable for a six month period from the Closing under the Purchase
Agreement, to purchase additional Convertible Debentures (“Additional
Convertible Debentures”) in an amount up to 50% of the original amount of
Convertible Debentures purchased.  All such options have expired
unexercised.
 
 The
Convertible Debentures bear interest at an annual rate of six percent (6%),
payable quarterly, either in cash or, at the Company’s election, shares of the
Company’s capital stock.
 
 Pursuant
to the terms of the June Purchase Agreement, the Company is obligated to
register the shares of Common Stock issued upon conversion of the Convertible
Debentures within one year of the Closing under the June Purchase Agreement or
as soon as the Company’s Common Stock is listed on the Over-the-Counter Bulletin
Board, whichever is sooner.
 
 On June
11, 2007, the Company issued warrants to purchase 2,962,500 shares of common
stock in connection with convertible debentures.  These warrants have
an exercise price of $0.02 per share and expire five years from the date of
issue.
 
 On June
11, 2007, the Company issued warrants to purchase 7,000,000 shares of common
stock in connection with convertible debentures.  These warrants have
an exercise price of $0.03 per share and expire five years from the date of
issue.
  On June
12,2007,
the $300,000 promissory note assumed during the SuiteSpeed merger and owed to
First National Bank of Colorado was paid in
full.
  On August
6, 2007 the Company issued 7,500,000 shares of its common stock, with
restrictive legends, to consultants and/or advisors as compensation for services
rendered to, or the settlement of obligations owed by, the
Company.  The shares were valued at $0.03 per share based on the
closing price of $0.03 per share for a fair market value of
$225,000.
 
 On
October 1, 2007 the company authorized issuance of 1,699,726 shares of its
common stock as compensation for interest on the June 2007 convertible
debentures.  The shares were valued at $0.02 per share based on the
convertible debenture agreement, for a fair market value of
$33,995.
 
 In
November 2007, the Company granted under our Long-Term Incentive Plan, an
aggregate of 1,450,000 Incentive Stock Options (“ISOs”) and an aggregate of
800,000 Non-Qualified Stock Options (“NQOs”).  The 1,450,000 incentive
stock options were issued to employees, and the 800,000 non-qualified stock
options were issued to consultants.  The options were issued at an
exercise price of $0.015 per share, representing the closing price of the
company’s stock on such date and vest over three years with one-third vesting on
the first anniversary of employment with the Company and an additional one-third
vesting on each of the following two anniversaries thereof.
 
 On
January 1, 2008, the Board approved issuance of 1,437,041 shares of our common
stock, as interest for the fourth quarter of 2007, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.
 
 On April
1, 2008, the Board approved issuance of 1,386,885 shares of our common stock, as
interest for the first quarter of 2008, pursuant to the clauses outlined in the
convertible debenture agreements of June 11, 2007.
 
 On April
14, 2008, we issued to Creative Hospitality Associates (“CHA”) a Warrant
pursuant to a sales agent Agreement with CHA (the “Agreement”).
  
 Index
   The
Warrant is initially exercisable for Series B Preferred Stock.  At such
time as we have a sufficient number of shares of Common Stock authorized to
permit the exercise of the Warrant for Common Stock (the “Triggering Event”),
the Warrant will automatically be exercisable for Common Stock and not Series B
Preferred Stock.  The maximum number of shares of Common Stock for which
the Warrant is ultimately exercisable for is 15,000,000 and the ultimate
exercise price per share of Common Stock for which the Warrant is exercisable is
$0.02 per share, each of which is subject to adjustment and the conditions
contained in the Warrant.  The Warrant becomes ultimately exercisable for
such 15,000,000 shares of Common Stock pursuant to a vesting schedule as set
forth in the Warrant that provides that the Warrant becomes ultimately
exercisable for 500,000 shares of Common Stock with each 1,000 rooms in a hotel
or other property that CHA or its affiliate introduces to us and in which our
Media and Entertainment System is installed.
 
 On May
15, 2008, the Company’s Board of Directors approved the grant to employees and
consultants, under the Registrant’s Long-Term Incentive Plan, of an aggregate of
100,000 Incentive Stock Options and an aggregate of 100,000 Non-Qualified Stock
Options.  Such options were issued at an exercise price of $0.017 per
share and vest one-third (1/3) on each of the first three anniversaries of the
employment date.
  On July
1, 2008, the Board approved issuance of 1,402,302 shares of our common stock, as
interest for the period April 1 through June 30, 2008, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.
  On July
15, 2008 Aaron Dobrinsky exercised 4,000,000 options on a cashless basis
resulting in the net issuance of 2,571,429 shares of common stock
 
 On July
21, 2008, the Company’s Board of Directors approved the grant, under the
Company’s Long-Term Incentive Plan, of an aggregate of 400,000 Incentive Stock
Options and an aggregate of 600,000 Non-Qualified Stock Options.  Such
options were issued at an exercise price of $0.02 per share and vest one-third
(1/3) on each of the first three anniversaries of the employment
date
 
 On July
31, 2008 we entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with Matthew Hulsizer and Jennifer Just, jointly, and certain
affiliated trusts (collectively, the “Investors”), pursuant to which we
simultaneously sold and issued to the Investors an aggregate of $2,500,000 of
Series C Preferred Stock (“Series C Stock”).  In connection with the
Purchase Agreement, the Company also issued Warrants to the Investors for the
purchase of additional shares of Series C Stock or Common Stock and entered into
a Registration Rights Agreement with the Investors.
 
 Each
share of Series C Stock is convertible into such number of shares of Common
Stock as is determined by dividing $2,500 by the initial conversion price of
$0.025 per share (or 100,000 shares of Common Stock for each share of Series C
Stock converted). However, the Series C Stock is not convertible into Common
Stock until such time as the Company has a sufficient number of shares of Common
Stock authorized to permit the conversion of all of the Series C Stock into
Common Stock, at which time the Series C Stock will automatically convert into
Common Stock.
 
 The
Series C Stock accrues dividends at an annual rate of 6% per year, payable
quarterly, either in cash or, at the Company’s election, shares of the Company’s
capital stock.  There are no redemption rights associated with the
Series C Stock.  Each holder of Series C stock is entitled to voting
rights on an “as converted” to Common Stock basis together with the holders of
Common Stock.
 
 Pursuant
to the Purchase Agreement, the Investors also received (i) Series C-1 Warrants
to purchase an aggregate of 200 shares of Series C Stock, at an initial exercise
price of $4,000 per share of Series C Stock, and (ii) Series C-2 Warrants to
purchase an aggregate of 200 shares of Series C Stock, at an initial exercise
price of $6,000 per share of Series C Stock.  The Warrants are
immediately exercisable and expire on the third anniversary of their date of
issuance.  At such time as the Company has a sufficient number of
shares of Common Stock authorized to permit the conversion of all Series C Stock
into Common Stock, each Warrant will no longer be exercisable for shares of
Series C Stock but instead will be exercisable for the number of shares of
Common Stock into which the Series C Stock that the Warrant could have been
exercised for prior thereto would have been convertible into, at an initial
exercise price of $.04 per share of Common Stock under the Series C-1 Warrants
and at initial exercise price of $.06 per share of Common Stock under the Series
C-2 Warrants.  The initial exercise prices are subject to adjustment
as set forth in the Warrants, forms of which are attached hereto as Exhibits 3.2
and 3.3 and are incorporated herein by reference.
 
 In
connection with the Purchase Agreement, the Registrant entered into a
Registration Rights Agreement. Pursuant to the Registration Rights Agreement,
the Company is obligated to register for resale under the Securities Act the
shares of Common Stock issuable upon conversion of the Series C Stock and
exercise of the Warrants beginning by April 30, 2009.
  
 Index
  On August
19, 2008, the Company’s Board of Directors approved the grant, under the
Company’s Long-Term Incentive Plan, of an aggregate of 300,000 Incentive Stock
Options.  Such options were issued at an exercise price of $0.012 per
share and vest one-third (1/3) on each of the first three anniversaries of the
grant date.
 
 On August
19, 2008, the Company granted under our Long-Term Incentive Plan, an aggregate
of 500,000 Non-Qualified Stock Options (“NQOs”).  The NQOs were
granted to Christopher Blisard with respect to his service as a member of the
Board of Directors during 2009 and vest on December 31, 2009.  The
options were issued at an exercise price of $0.012 per share, representing the
closing price of the Company’s common stock on such date.
 
 On August
19, 2008, the Company issued 1,200,000 shares as Board of Director compensation.
800,000 of the shares were issued to Peter Bordes and 400,000 of the shares were
issued to Herbert Hunt.  The shares were valued at $0.025 per share
for a fair market value of $30,000.
 
 Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
 
 GENERAL
 
 Since the
2004 Reorganization, we have focused our business on providing wired networking
solutions and wireless fidelity networking solutions, also known as Wi-Fi, for
high speed internet access to hotels, convention centers, corporate apartments
and special events locations.
  Our
solution offers easy to use access, providing instant and seamless connections
for laptop users from anywhere throughout a property, including guest rooms,
meeting rooms, back office and public areas, over a high-speed connection that
is up to 300 times faster than a standard dial-up modem. Users on this network
have access to home and corporate email accounts and virtual private networks,
also known as VPNs. These users have flexible billing options, choosing from any
one of free service, flat rate, time-based usage or unlimited. In addition,
these users can expand the service to include value-added services such as
wireless point of sale, maintenance, check-in and internet telephony
services.
  As of
September 12, 2007, we announced that we are entering into the in-room media and
entertainment market.  The new RoomLinX product will provide premium
applications for internet-based business and entertainment media to venues
serving the visitor market such as hotels, resorts, and time share
properties.
 
 The
Roomlinx internet based media and entertainment offering will include a broad
range of content and features to satisfy guests while maximizing revenue
opportunities for the hotelier.  The solution includes movies, gaming,
international and US television programming, music and news; local travel and
concierge information; and business productivity tools that include desktop
applications, conferencing and printing applications.
 
 We
believe we will generate revenue through:
 1.
              Ongoing
      connectivity service and support contracts2.
              Delivery
      of  content and advertising3.
              Delivery
      of business and entertainment
applications
  
 We have
incurred operating losses since our inception.   We will need to
increase our installation and maintenance revenues and improve our gross margins
to become profitable and sustain profitability on a quarterly and annual
basis.  We recently completed development of our Media and
Entertainment solution and have commenced marketing it.  There is no
assurance that we will be successful in our efforts.  We are not able
to predict with any certainty when, if ever, we will attain profitable
operations.
  FORWARD-LOOKING STATEMENTS
 
 This Form
10-QSB contains or incorporates by reference “forward-looking statements,” as
that term is used in federal securities laws, about our financial condition,
results of operations and business.  These statements include, among
others:
  
 Index
   -
      statements concerning the benefits that we expect will result from our
      business activities and results of exploration that we contemplate or have
      completed, such as increased revenues; and-
      statements of our expectations, beliefs, future plans and strategies,
      anticipated developments and other matters that are not historical
      facts.
 
 These
statements may be made expressly in this document or may be incorporated by
reference to other documents that we will file with the SEC.  You can
find many of these statements by looking for words such as “believes,”
“expects,” “anticipates,” “estimates” or similar expressions used in this report
or incorporated by reference in this report.
 
 These
forward-looking statements are subject to numerous assumptions, risks and
uncertainties that may cause our actual results to be materially different from
any future results expressed or implied in those statements.  Because
the statements are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied.  We caution you not to put
undue reliance on these statements, which speak only as of the date of this
report.  Further, the information contained in this document or
incorporated herein by reference is a statement of our present intention and is
based on present facts and assumptions, and may change at any time and without
notice, based on changes in such facts or assumptions.
 
 RESULTS OF OPERATIONS
 
 Three months ended March 31,
2007 compared to three months ended March 31, 2006:
 
 For the
three months ended March 31, 2007, we reported net loss of $231,844,
compared to net income of $232,486, for the three months ended March 31,
2006.  Our operating loss for the three months ended March
31, 2007 was $138,553 compared to operating income of $150,017
for the three months ended March 31, 2006.  As discussed below,
in 2007 we began investing significant capital in the design, production, and
marketing of our new media and entertainment product.  That increase
in costs was a primary factor in the results of operations.
  System sales and
installation revenue. System sales and installation revenue decreased 27%
to $165,481 during the three months ended March 31, 2007 from $228,009
during the three months ended March 31, 2006.  Although we
installed three new customers during both quarters, the 2007 installations
represented 455 guest rooms, compared to 1,024 guest rooms for the 2006
installations.  This component of our revenue stream is dependent upon
the acquisition of new customers, which can vary from year to year.
  Service, maintenance and
usage revenue. Service, maintenance and usage revenue decreased 7%
to $344,821 for the three months ended March 31, 2007 from $371,714
for the three months ended March 31, 2006. The decrease was due to an
decrease in the number of customers we service on a recurring basis to a
total of 185 customers (representing 32,314 rooms) compared to
190 customers (representing 34,483 rooms) as of March 31,
2006.
  Backlog. As of March
31, 2007, we had three customer installations in progress, all of
which were completed during the second quarter of 2007.  As of March
31, 2007, there were 21 service contracts scheduled to conclude during the
second quarter of 2007.  17 of the customers continued their
service with us and 4 of the customers cancelled their contractual
arrangement with us.
  Cost of system sales and
installation. Cost of system sales and installation increased 1% to
$107,922 for the three months ended March 31, 2007 from
$106,510 for the three months ended March 31, 2006. The increase was
attributable to increased pricing on components of installs and
upgrades.
  Cost of service, maintenance
and usage. Cost of service, maintenance and usage increased 52% to
$321,540 for the three months ended March 31, 2007 from $210,953
for the three months ended March 31, 2006.  The increase is
mainly attributable to increased cost of monitoring and servicing of
equipment.
  Sales and marketing.
Sales and marketing expense increased by $7,434 to $47,302 during the three
months ended March 31, 2007 from $39,868 for the three
months ended March 31, 2006.  During 2007, we began market
research on our new media and entertainment product.  Such measures
included staff additions resulting in increased personnel and personnel related
costs of $7,151, an increase in travel expenses of $112, and an increase in
advertising expense of $171.
  
 Index
   General and
administrative. General and administrative expense increased by
$51,669 to $132,562 for the three months ended March 31, 2007 from
$80,893 for the three months ended March 31, 2006. The increase in cost is
primarily due to our investing significant capital in the design, production,
and marketing of our new media and entertainment product. During
2007, personnel and personnel related costs increased $9,640 to $44,995 in
2007 from $35,355 in 2006.  Office related costs such as rent,
telephone, and insurance were reduced $3,868 from $28,292 in 2006 to
$24,424 in 2007. We also incurred travel expensed of $4,882 during the three
months ended March 31, 2007 compared to no travel expenses for the three months
ended March 31, 2006.  Professional fees, SEC fees, and investor
relations fees increased $36,897 from $15,473 in 2006 to
$89,870 in 2007. Bad debt expense increased $4,118 to $5,693 for the
three months ended March 31, 2007 compared to $1,575 for the three months ended
March 31, 2006.
  Depreciation of property and
equipment. Depreciation of property and equipment decreased to $2,029 for
the three months ended March 31, 2007 as compared to $11,482 for the three
months ended March 31, 2006.  This reduction is attributable to
completely depreciating some of the computer
equipment.   Depreciation expense is computed each year based
upon our estimate of the remaining useful lives of the assets.  Our
estimates of useful lives are periodically reviewed and the shorter of the
actual life or the economic life of the assets are used.
  Interest expense.
Interest expense increased $255 to $95,981 for the three
months ended March 31, 2007 as compared to $95,726 for the three
months ended March 31, 2006. The increase is attributable to the
increase in the principal balance of outstanding debt and the increase in
interest rates and penalties associated with our inability to retire the debt as
it matured.
  Financing
expenses.  We incurred $37,500 of debt discount financing
expenses during the three months ended March 31, 2007 versus none for the three
months ended March 31, 2006.
  Foreign exchange gain
(loss). A portion of the Company’s business is denominated in Canadian
currency and the Company regularly converts Canadian denominated transactions
into US dollars.  Foreign transactions resulted in a loss of
$5,866 for the three months ended March 31, 2007 compared to a
gain of $16,510 for the three months ended March 31, 2006. The amount
of gain (loss) will vary based upon the volume of foreign currency denominated
transactions and fluctuations in the value of the Canadian dollar vis-à-vis the
US dollar.  As the Company moved its corporate headquarters from
Canada to the United States during 2004, and continues to decrease the volume of
transactions denominated in Canadian dollars, it is not expected that the
foreign exchange gains (losses) will have a significant impact on the Company in
the future.
  Income from discharge of
indebtedness. During the
three months ended March 31, 2007, the Company negotiated settlements with
several vendors and realized discharge of indebtedness income in the amount of
$12,897 compared to the discharge of indebtedness income of $162,067 for the
three months ended March 31, 2006.
 
 LIQUIDITY AND CAPITAL RESOURCES
 
 Since our
inception, we have financed our operations primarily through private placements
of equity securities, convertible debentures and stockholder loans, which
provided aggregate net proceeds of approximately $7,740,000 through March 31,
2007. In addition, on June 28, 2004, we completed our merger with ARC which
resulted in cash contributed from ARC of approximately $711,000, the net
proceeds of which were used to extinguish certain short term liabilities, pay
accounts payable, and pay accrued expenses and for other working capital
purposes.  As of March 31, 2007 we were generally unable to pay our
financial obligations as they matured and we were in default of the provisions
of certain indebtedness.
  We have
incurred significant operating losses since our inception and as of March 31,
2007 had a working capital deficiency and stockholder’s deficit of
$2,880,140 and $2,869,388, respectively. The working capital deficiency and
cumulative deficit raise substantial doubt about our ability to continue as a
going concern.
  As of
March 31, 2007 we had $3,873 in cash and cash equivalents, which amount is
not sufficient to fund operating activities during the remainder of
2007 and 2008.  We expect to be dependent upon other
financing sources for the foreseeable future.  Management has
evaluated the Company's alternatives to enable it to pay its liabilities as they
become due and payable in the current year, reduce operating losses and obtain
additional or new financing in order to advance its business plan. Additional
alternatives being considered by management include, among other things
obtaining financing from new lenders and the issuance of additional equity and
debt. If we raise additional capital through equity financing, such financing is
expected to be dilutive to existing stockholders. If we raise additional capital
through debt financing, such debt financing may require us to abide by
restrictive covenants and will likely be subject to conversion privileges which
will be dilutive to existing stockholders. We cannot provide any assurance that
we will be able to raise additional funds to enable our operations to continue
to the point were we will maintain a cash flow positive state. At this time, we
do not have any bank credit under which we may borrow funds for working capital
or other general corporate purposes. We have implemented cost reduction measures
in the areas of general and administrative and sales expense, which includes
reduction in staff.
  
 Index
   Net cash
used by operating activities was $95,564 for the three months ended March 31,
2007 as compared to $62,607 for the three months ended March 31,
2006.
 
 Net cash
used by financing activities was $45,103 for the three months ended March 31,
2007 as compared to $40,000 for the three months ended March 31,
2006.  During the three months ended March 31, 2007 we used cash of
$45,103 for principal payments on debt.
 
 As of
March 31, 2007, our primary financial commitments consisted of $3,388,592
recorded as current liabilities plus future obligations under operating
leases.  Total future payments under operating leases were $52,304 at
March 31, 2007, including $14,666 due during 2007 and $14,748 due during 2008.
We continue to actively seek relief from our financial obligations and
commitments.
 
 As of
June 11, 2007, we reached agreement with certain of our debt holders whereby we
repaid and canceled all prior existing indebtedness (other than bank debt) at a
fifty percent (50%) discount to the outstanding principal amount of such
indebtedness.  The total outstanding principal amount of such
indebtedness immediately prior to such repayment and cancellation was
$1,455,000.  This indebtedness included the following
transactions:
  1.
              The
      March 3, 2005 private placement bridge financing of $1,100,000; all
      penalties and interest was waived and the Company settled for
      $550,000.2.
              Officer
      and stockholder notes that were issued from November 2004 through January
      2005 that had an outstanding principal balance of
      $255,000.    All outstanding penalties and interest
      were waived and the Company settled for $127,500.3.
              During
      2005, the Company borrowed $75,000 from an individual.  The
      borrowing bears interest at 10% and is due on
      demand.  Subsequent to December 31, 2005, the Company negotiated
      a settlement of this borrowing arrangement and repaid $37,500 in full
      satisfaction of its outstanding balance including all outstanding interest
      owed.
  On June
11, 2007 and June 13, 2007, we sold an aggregate of $2,350,000 principal amount
of Convertible Debentures due May 2012 (the “Convertible Debentures”) to a
number of investors in reliance on Section 4(2) of the Securities Act, and
pursuant to a Securities Purchase Agreement with certain investors (the “June
Purchase Agreement”).
 
 The
Convertible Debentures are initially convertible into Series B Preferred Stock,
which Series B Preferred Stock will not be convertible into Common Stock until
such time as the Company has sufficient number of shares of Common Stock
authorized to permit the conversion of the Convertible Debentures into Common
Stock, at which time the Convertible Debentures will automatically be
convertible into Common Stock and not Series B Preferred Stock.  The
ultimate conversion price into shares of Common Stock of the Convertible
Debentures is $0.02 per share, subject to certain restrictions contained in the
Convertible Debentures.
 
 Pursuant
to the June Purchase Agreement, each purchaser also received an option,
exercisable for a six month period from the Closing under the Purchase
Agreement, to purchase additional Convertible Debentures (“Additional
Convertible Debentures”) in an amount up to 50% of the original amount of
Convertible Debentures purchased.  All such options have expired
unexercised.
 
 The
Convertible Debentures bear interest at an annual rate of six percent (6%),
payable quarterly, either in cash or, at the Registrant’s election, shares of
the Registrant’s capital stock.
 
 Pursuant
to the terms of the June Purchase Agreement, the Registrant is obligated to
register the shares of Common Stock issued upon conversion of the Convertible
Debentures within one year of the Closing under the June Purchase Agreement or
as soon as the Registrant’s Common Stock is listed on the Over-the-Counter
Bulletin Board, whichever is sooner.
 
 
 Index
 
 Item 3.  Controls and
Procedures
 
 The Company is required to maintain disclosure controls and
procedures (as defined in Rule 13A-15(e) and Rule 15d-15(e) under the Securities
Exchange Act of 1934, as amended) that are designed to ensure that information
required to be disclosed in our periodic reports filed under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms, and that such information is accumulated and
communicated to our management, including our principal executive/financial
officer, to allow timely decisions regarding required
disclosure.
 
 Our
management has conducted an evaluation under the supervision of our current
Chief Executive Officer of the effectiveness of the design and operation of our
system of disclosure controls and procedures pursuant to the Exchange Act as of
December 31, 2006.  Based upon that evaluation, our current Chief
Executive Officer concluded that the Company’s disclosure controls and
procedures were not effective, as of March 31, 2007.
 
 Specifically,
our current Chief Executive Officer noted the following material weaknesses as
of such date:  our inability, due to lack of capital resources, to
hire and retain personnel with background and training to fulfill the role
of  Chief Financial Officer of a publicly traded company and the
inability to devote the personnel resources necessary to timely prepare and file
financial reports; we did not maintain a consistent system of maintaining
corporate accounting records, which resulted in significant difficulty in
retrieving documents for our audits; our lack of documentation to support
entries made to the general ledger; our lack of documentation regarding
calculations for deferred revenue and depreciation and amortization; our lack of
documentation and failure to review financial instruments to determine treatment
as a derivative; and our failure to maintain controls to verify that ledger
accounts accurately reflected the balances in the underlying
documents.
 
 Our
management concluded that the material weaknesses described above could result
in material misstatements of substantially all of our financial statement
accounts which would result in a material misstatement of our annual or interim
consolidated financial statements that would not be prevented or detected on a
timely basis.  Accordingly, we implemented corrective activities, including
the performance of additional procedures by management designed to ensure the
reliability of our financial reporting.  We believe that the consolidated
financial statements in this Report fairly present, in all material respects,
our financial position, results of operations, and cash flows as of the dates,
and for the periods presented, in conformity with GAAP.
 
 After
identifying the existence of the material weaknesses, we began a process to
remediate the identified material weaknesses.  That process includes (a)
allocating additional capital resources to the accounting and financial
reporting function, (b) certain personnel changes, (c) consultation with
advisors who have the background and training to implement and maintain an
effective system of internal control and financial reporting, (d) increased
corporate focus on key accounting controls and processes, including
documentation requirements; (e) additional training for accounting personnel,
(f) ) the implementation of more rigorous period-end financial reporting
policies and processes involving journal-entry approval, supporting
documentation, account reconciliations, and officer review.
  The
remediation plan, once fully implemented and operational, is expected to result
in the correction of the identified material weaknesses in internal control over
financial reporting.
  
 Index     PART II - OTHER INFORMATION
      
 Index
   Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds
 
 None
 
 
 
 Item 6. Exhibits
  (a)  Exhibits.
 
 31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the
Chief Executive and Chief Financial Officers.
 
 32.1 Certification of the Chief Executive and Chief Financial Officers pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 Index
 
 Signatures
 
 Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
 
 RoomLinX, Inc.By:
              /s/
      Michael S. WasikMichael S. WasikChief Executive OfficerChief Financial OfficerDate:
              9/10/08
 
 Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates
indicated.
  By:
              /s/
      Michael S. WasikMichael S. WasikChief Executive OfficerChief Financial OfficerDate:
              9/10/08