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 September 30, 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 24,
2008 was 157,065,781.
 
 Transitional
Small Business Disclosure Format (Check one):  o Yes  x  No
  
  ROOMLINX, INC.
  INDEX
 
 PART I.
              FINANCIAL INFORMATIONItem
      1.
              Financial
      Statements (Unaudited)Consolidated Balance Sheet as of September 30,
      2007Consolidated Statements of Operations for the Three and
      Nine Months Ended September 30, 2007 and 2006Consolidated Statements of Cash Flows for the Nine
      Months Ended September 30, 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
      SHEETSeptember
      30, 2007(Unaudited)ASSETSCurrent
      assets:Cash
      and cash equivalents
                
                $
                1,052,344Accounts
      receivable, net
                
                
                498,538Prepaid
      and other current assets
                
                
                37,763Total
      current assets
                
                
                1,588,645Property
      and equipment, net
                
                
                31,286Total
      assets
                
                $
                1,619,931LIABILITIES AND
      STOCKHOLDERS' (DEFICIT)Current
      liabilities:Accounts
      payable and accrued expenses
                
                $
                293,169Officer
      and stockholder notes payable
                
                
                12,500Accrued
      interest and penalties
                
                
                42,493Deferred
      revenue
                
                
                481,636Total
      current liabilities
                
                
                829,798Convertible
      debentures
                
                
                2,932,194Stockholders'
      (deficit):Preferred
      stock - $0.20 par value, 5,000,000 shares authorized:Class
      A - 720,000 shares authorized, issued and outstanding
                
                
                144,000Series
      B - 2,000,000 shares authorized, none issued and
    outstanding
                
                
                -Common
      stock - $0.001 par value, 245,000,000 shares authorized:147,368,381
      shares issued and outstanding
                
                
                147,368Additional
      paid-in capital
                
                
                19,621,706Deferred
      compensation
                
                
                (65,841
                )Accumulated
      (deficit)
                
                
                (21,989,294
                )Total
      stockholders' (deficit)
                
                
                (2,142,061
                )Total
      liabilities and stockholders' (deficit)
                
                $
                1,619,931
    The
accompanying notes are an integral part of these consolidated financial
statements.
 
 Index
   RoomLinX, Inc.CONSOLIDATED
      STATEMENTS OF OPERATIONS(Unaudited)Three
      Months Ended
                
                
                Nine
      Months EndedSeptember
      30,
                
                
                September
      30,2007
                
                
                2006
                
                
                2007
                
                
                2006RevenuesSystem
      sales and installation
                
                $
                54,779
                
                
                $
                143,397
                
                
                $
                552,998
                
                
                $
                497,330Service,
      maintenance and usage
                
                
                333,484
                
                
                
                361,557
                
                
                
                1,001,468
                
                
                
                1,121,400388,263
                
                
                
                504,954
                
                
                
                1,554,466
                
                
                
                1,618,730Costs
      and ExpensesSystem
      sales and installation
                
                
                44,892
                
                
                
                103,930
                
                
                
                239,065
                
                
                
                323,881Service,
      maintenance and usage
                
                
                240,593
                
                
                
                256,588
                
                
                
                890,977
                
                
                
                713,765Sales
      and marketing
                
                
                48,390
                
                
                
                34,911
                
                
                
                153,973
                
                
                
                118,242Product
      development
                
                
                106,478
                
                
                
                -
                
                
                
                182,736
                
                
                
                -Stock
      compensation
                
                
                27,815
                
                
                
                -
                
                
                
                306,055
                
                
                
                -General
      and administrative
                
                
                133,246
                
                
                
                95,867
                
                
                
                508,621
                
                
                
                270,460Depreciation
                
                
                2,903
                
                
                
                3,025
                
                
                
                6,961
                
                
                
                25,989604,317
                
                
                
                494,321
                
                
                
                2,288,388
                
                
                
                1,452,337Operating
      income (loss)
                
                
                (216,054
                )
                
                
                10,633
                
                
                
                (733,922
                )
                
                
                166,393Other
      income (expenses)Interest
      expense
                
                
                (36,294
                )
                
                
                (91,805
                )
                
                
                (154,841
                )
                
                
                (281,035
                )Financing
      expense
                
                
                -
                
                
                
                -
                
                
                
                (252,207
                )
                
                
                -Derivative
      income (expense)
                
                
                548,965
                
                
                
                -
                
                
                
                (579,383
                )
                
                
                -Foreign
      currency gain (loss)
                
                
                (1,578
                )
                
                
                15,525
                
                
                
                (9,432
                )
                
                
                32,775Other
      income
                
                
                9,703
                
                
                
                408
                
                
                
                7,176
                
                
                
                237Income
      from discharge of indebtedness
                
                
                6,506
                
                
                
                37,473
                
                
                
                1,716,662
                
                
                
                591,986527,302
                
                
                
                (38,399
                )
                
                
                727,975
                
                
                
                343,963Income
      (loss) before income taxes
                
                
                311,248
                
                
                
                (27,766
                )
                
                
                (5,947
                )
                
                
                510,356Provision
      for income taxes
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Net
      income (loss)
                
                $
                311,248
                
                
                $
                (27,766
                )
                
                $
                (5,947
                )
                
                $
                510,356Net
      income (loss) per common share:Basic
                
                $
                0.00
                
                
                $
                (0.00
                )
                
                $
                (0.00
                )
                
                $
                0.00Diluted
                
                $
                0.00
                
                
                $
                (0.00
                )
                
                $
                0.00
                
                
                $
                0.00Weighted
      average shares outstanding:Basic
                
                
                144,433,598
                
                
                
                132,868,381
                
                
                
                141,406,843
                
                
                
                132,868,381Diluted
                
                
                310,503,997
                
                
                
                132,868,381
                
                
                
                141,406,843
                
                
                
                176,365,048
    The
accompanying notes are an integral part of these consolidated financial
statements.
 
 Index
   RoomLinX, Inc.CONSOLIDATED
      STATEMENTS OF CASH FLOWSfor
      the Nine Months Ended September 30, 2007 and 2006(Unaudited)2007
                
                
                2006Cash
      flows from operating activities:Net
      cash (used in) operating activities
                
                $
                (401,627
                )
                
                $
                (73,400
                )Cash
      flows from investing activities:Purchase
      of property and equipment
                
                
                (25,466
                )
                
                
                -Net
      cash (used in) investing activities
                
                
                (25,466
                )
                
                
                -Cash
      flows from financing activities:Cash
      proceeds from convertible debentures
                
                
                2,300,000
                
                
                
                -Principal
      payments on convertible debenture
                
                
                (550,000
                )
                
                
                -Principal
      payments on notes payable
                
                
                (277,500
                )
                
                
                (90,000
                )Cash
      proceeds from officer and stockholder notes payable
                
                
                -
                
                
                
                7,500Principal
      payments on officer and stockholder notes payable
                
                
                (137,603
                )
                
                
                -Net
      cash (used in) provided by financing activities
                
                
                1,334,897
                
                
                
                (82,500
                )Net
      increase (decrease) in cash and equivalents
                
                
                907,804
                
                
                
                (155,900
                )Cash
      and equivalents at beginning of period
                
                
                144,540
                
                
                
                180,756Cash
      and equivalents at end of period
                
                $
                1,052,344
                
                
                $
                24,856Supplemental
      Cash Flow InformationInterest
      paid
                
                $
                16,603
                
                
                $
                14,653Non-cash
      investing and financing activities:Warrants
      Issued in Connection with Debt
                
                
                
                
                
                $
                150,000Notes
      Payable Converted to Convertible Debentures
                
                $
                (50,000
                )Derivative
      Adjustment on Convertible Debentures
                
                $
                (582,194
                )Accounts
      Payable Debt Forgiven
                
                $
                4,200Convertible
      Debt Forgiven
                
                $
                550,000Notes
      Payable Forgiven
                
                $
                87,500Interest
      and Penalties Forgiven
                
                $
                561,745Capital
      Lease Forgiven
                
                $
                418,418Shareholder
      Notes Forgiven
                
                $
                137,397$
                1,127,066
                
                
                $
                150,000
   The
accompanying notes are an integral part of these consolidated financial
statements.
 
 Index
   RoomLinX, Inc.
 Notes
to Consolidated Financial Statements
 September
30, 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.
 
 Derivative Financial
Instruments:We do not use derivative instruments to hedge
exposures to cash flow, market, or foreign currency risks.
 
 We review
the terms of convertible debt instruments we issue to determine whether there
are embedded derivative instruments, including the embedded conversion option,
that are required to be bifurcated and accounted for separately as a derivative
financial instrument. In circumstances where the convertible instrument contains
more than one embedded derivative instrument, including the conversion option,
that is required to be bifurcated, the bifurcated derivative instruments are
accounted for as a single, compound derivative instrument. Also, in connection
with the sale of convertible debt, we may issue freestanding options or warrants
that may, depending on their terms, be accounted for as derivative instrument
liabilities, rather than as equity. We may also issue options or warrants to
non-employees in connection with consulting or other services they
provide.
 
 When the
ability to physical or net-share settle the conversion option or the exercise of
the freestanding options or warrants is deemed to be not within the control of
the company or if the conversion option, options or warrants are not indexed
only to the underlying common stock, the embedded conversion option or
freestanding options or warrants may be required to be accounted for as a
derivative financial instrument liability.
 
 Derivative
financial instruments are initially measured at their fair value. For derivative
financial instruments that are accounted for as liabilities, the derivative
instrument is initially recorded at its fair value and is then re-valued at each
reporting date, with changes in the fair value reported as charges or credits to
income. For option-based derivative financial instruments, we use the
Cox-Ross-Rubinstein binomial model to value the derivative
instruments.  To the extent that the initial fair values of the
freestanding and/or bifurcated derivative instrument liabilities exceed the
total proceeds received, an immediate charge to income is recognized, in order
to initially record the derivative instrument liabilities at their fair
value.
  
 Index   The
discount from the face value of the convertible debt instruments resulting from
allocating some or all of the proceeds to derivative instruments, together with
the stated interest on the instrument, is amortized over the life of the
instrument through periodic charges to income, using the effective interest
method.
 
 Certain
instruments, including convertible debt and freestanding options or warrants
issued, may be subject to registration rights agreements, which may impose
penalties for failure to register the underlying common stock by a defined
date.  Any such penalties are accounted for in accordance with SFAS 5
and are accrued when they are deemed probable.
 
 The
classification of derivative instruments, including whether such instruments
should be recorded as liabilities or as equity, is re-assessed periodically,
including at the end of each reporting period. If re-classification is required,
the fair value of the derivative instrument, as of the determination date, is
re-classified. Any previous charges or credits to income for changes in the fair
value of the derivative instrument are not reversed. Derivative instrument
liabilities are classified in the balance sheet as current or non-current based
on whether or not net-cash settlement of the derivative instrument could be
required within 12 months of the balance sheet date.
 
 2.
              Officer
      and Stockholder Notes Payable
 
 From
November 2004 through January 2005, the Company received proceeds of $320,000 in
exchange for 10% promissory notes maturing six months from the date of
issuance.  During 2005, the Company repaid $40,000 of the
notes.  The Company was not able to retire the remaining balance of
the promissory notes as scheduled and was in default of the repayment
terms.  In January 2008, the Company settled $25,000 of the notes plus
accrued interest and penalties for $15,103.  In June 2007, the Company
settled the remaining $255,000 of the notes plus accrued interest and penalties
for $127,500, of which $12,500 was outstanding at September 30,
2007..
 
 On August
11, 2006, the Company borrowed $7,500 from Peter Bordes.  Principal
and interest at 10% were due upon receipt of funding.  The note was
repaid in June, 2007.
 
 3.
              Notes
      Payable
  As part
of the SuiteSpeed merger, Roomlinx assumed a $300,000 promissory note payable to
the First National Bank of Colorado; this note had a balance due of $140,000 as
of January 1, 2007.  The note bears interest at the rate of the prime
plus 1% and is payable in monthly principal installments of $10,000 with the
entire remaining balance due on or before September 1, 2006.  The due
date of the note was subsequently extended, and the note was paid in full on
June 12, 2007.
 
 During
2005, the Company borrowed $75,000 from an individual.  The borrowing
bore interest at 10% and was due on demand.  In June of 2007, all
interest and penalties were forgiven, and the note was settled for
$37,500.
 
 On
December 28, 2006 the Company issued three bridge notes in the principal amounts
of $50,000 each, and three warrants to purchase 1.3 million shares of common
stock to each lender with an exercise price of $0.03 per share. On June 10,
2007, two of the three bridge notes were paid back in full and one of them
converted into the convertible debentures dated June 11, 2007.
  4.
              Convertible
      Debentures
 
 On June
11, 2007 and June 13, 2007, the Company 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
conversion price into shares of Common Stock of the Convertible Debentures is
$0.02 per share, subject to certain standard anti-dilution
adjustments.  In the event that the Convertible Debentures are not
repaid when due, the conversion price will be reduced to $0.01 per
share.  Because this potential reduction in the conversion price
effectively indexes the return to the investors to a factor other than the
underlying value of our common stock, the embedded conversion option has been
bifurcated and accounted for separately as a derivative instrument
liability.
  
 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.  This option has also been accounted
for as a derivative instrument liability.  All such options have
expired unexercised.
 
 The
Convertible Debentures bear interest at an annual rate of 6%, payable quarterly,
either in cash or, at the Company’s election, in shares of our capital
stock.
 
 Pursuant
to the terms of the June Purchase Agreement, we are obligated to register the
shares of Common Stock issuable on conversion of the Convertible Debentures
within one year of the Closing under the June Purchase Agreement or as soon as
our Common Stock is listed on the Over-the-Counter Bulletin Board, whichever is
sooner.  The June Purchase Agreement does not provide for any specific
penalties for not complying with this requirement, which has not yet been
met.  At September 30, 2007, the Company has not accrued any penalties
that may ultimately be paid, as it does not believe any penalties are probable
as of that date.
 
 5.
              Derivative
      Financial Instruments
 
 As
discussed above, the embedded conversion option in our Convertible Debentures
and options issued to the investors to acquire additional debentures have been
accounted for as derivative instrument liabilities.
 
 We use
the Cox-Ross-Rubinstein binomial model to value warrants, and the embedded
conversion option components of any bifurcated embedded derivative instruments
that are recorded as derivative liabilities. See Note 4 related to embedded
derivative instruments that have been bifurcated from our Convertible Debentures
and the options to acquire additional Convertible Debentures held by the
investors.  The options and conversion options can be exercised by the
holders at any time.  The options held by the investors to acquire
additional Convertible Debentures expired in December 2007.
 
 In
valuing the embedded conversion option components of the bifurcated embedded
derivative instruments and the options, at the time they were issued and at
September 30, 2007, we used the market price of our common stock on the date of
valuation, an expected dividend yield of 0%, an estimated volatility of 250%
based on a review of our historical volatility and the remaining period to the
expiration date of the option or repayment date of the convertible debt
instrument.  The risk-free rates of return used ranged from 4.92% to
5.07%, based on constant maturity rates published by the U.S. Federal Reserve,
applicable to the remaining life of the options.
  
 Index   At
September 30, 2007, the following derivative liabilities were
outstanding:
 
 Issue
      Date
              Expiry
      Date
              Instrument
              
              Conversion/
                Exercise
      Price
                Per
      Share
              
              
              Value
      –
                Issue
      Date
              
              
              Value
      -
                September
                30,
      2007June
      2007
              May
      2012
              $2,350,000
                Convertible
      Debentures
              
              $
              0.02
              
              
              $
              2,338,899
              
              
              $
              2,628,229June
      2007
              
              Convertible
      Debentures Carrying Amount
              
              
              
              
              
              
              
              
              
              
              2,811June
      2007
              December
      2007
              Option
      to acquire
                $1,175,000
                Convertible
      Debentures
              
              $
              0.03
              
              
              
              431,264
              
              
              
              301,154Total
      derivative financial instruments
              
              
              $
              2,770,163
              
              
              $
              2,932,194
 
 6.
              Stockholders'
      (Deficit)
  Preferred
Stock:   The Company has authorized 5,000,000
preferred shares with a $0.20 par value.  There are two designations
of the class of preferred shares: Class A and Class B Preferred
Stock.  The Class A 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.  The Class B
Preferred Stock is not entitled to any dividends.  As of September 30,
2007, there were 720,000 shares of Class A Preferred stock and no shares of
Class B Preferred Stock issued and outstanding.  Dividends accrued and
unpaid as of September 30, 2007 were $117,120.
 
 Common
Stock:   The Company has authorized 245,000,000
shares of $0.001 par value common stock.  As of September 30, 2007,
there were 147,368,381 shares of common stock issued and
outstanding.
 
 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.
 
 The
Company may continue to raise capital through the sale of its common shares and
may also seek other funding or corporate transactions to achieve its business
objectives.
 
 Warrants:   On
June 11, 2007, the Company issued warrants to purchase 2,962,500 shares of
common stock to Alliance Advisors for services rendered 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 to Jill Soloman for services rendered 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.
 
 
 Index  
 Outstanding and Exercisable
Warrants
   Exercise
      Price
              
              
              Number
      of
                Shares
              
              
              Remaining
                Contractual
      Life
                (in
      years)
              
              
              Exercise
      Price
                times
      Number
                of
      Shares
              
              
              Weighted
                Average
                Exercise
      Price$0.075
              
              
              
              10,963,333
              
              
              2.4
              
              
              $
              822,250$0.030
              
              
              
              3,900,000
              
              
              4.3
              
              
              
              117,000$0.020
              
              
              
              2,962,500
              
              
              4.7
              
              
              
              59,250$0.030
              
              
              
              7,000,000
              
              
              4.7
              
              
              
              210,00024,825,833
              
              
              
              
              
              $
              1,208,500
              
              
              $
              0.049
 
 
 Warrants
              
              Number
      of
                Shares
              
              
              Weighted
      Average
                Exercise
      PriceOutstanding
      at January 1, 2007
              
              
              22,880,000
              
              
              $
              0.093Issued
              
              
              9,962,500
              
              
              $
              0.027Exercised
              
              
              -
              
              
              
              -Expired
      / Cancelled
              
              
              (8,016,667
              )
              
              $
              0.148Outstanding
      at September 30, 2007
              
              
              24,825,833
              
              
              $
              0.049
 
 The
Company recorded compensation expense of $220,799 in connection with the
warrants granted on June 11, 2007. The fair value of the warrant grants was
estimated on the date of grant utilizing the Black-Scholes option pricing model
with the following weighted average assumptions: expected life of warrants of 5
years, expected volatility of 157%, risk-free interest rate of 4% and no
dividend yield. The weighted average fair value at the date of grant for
warrants granted approximated $.019 per warrant.
 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 September 30, 2007,
options to purchase 23,500,000 shares were outstanding and 1,500,000 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.
 
 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.
 
 
 Index   Outstanding Stock
Options
 
 Exercise
      Price
              
              
              Number
      of
                Shares
              
              
              Remaining
                Contractual
      Life
                (in
      years)
              
              
              Exercise
      Price
                times
      Number
                of
      Shares
              
              
              Weighted
                Average
                Exercise
      Price$0.080
              
              
              
              500,000
              
              
              <0.3
              
              
              $
              40,000$0.010
              
              
              
              4,000,000
              
              
              6.5
              
              
              
              40,000$0.100
              
              
              
              1,000,000
              
              
              2.3
              
              
              
              100,000$0.026
              
              
              
              1,000,000
              
              
              7.8
              
              
              
              26,000$0.020
              
              
              
              13,600,000
              
              
              6
              
              
              
              272,000$0.020
              
              
              
              100,000
              
              
              .5
              
              
              
              2,000$0.020
              
              
              
              800,000
              
              
              .3
              
              
              
              16,000$0.025
              
              
              
              1,000,000
              
              
              6.5
              
              
              
              25,000$0.025
              
              
              
              500,000
              
              
              .3
              
              
              
              12,50022,500,000
              
              
              
              
              
              $
              533,500
              
              
              $
              0.024
 
 
 Options
              
              Number
      of
                Shares
              
              
              Weighted
      Average Exercise PriceOutstanding
      at January 1, 2007
              
              
              24,400,000
              
              
              $
              0.023Granted
              
              
              2,000,000
              
              
              $
              0.025Exercised
              
              
              -
              
              
              
              -Expired
              
              
              (3,900,000
              )
              
              $
              0.017Outstanding
      at September 30, 2007
              
              
              22,500,000
              
              
              $
              0.024
 
 The
Company recorded compensation expense of $15,947 in connection with the options
granted on May 4, 2007. The fair value of the option grants was estimated
on the date of grant utilizing the Black-Scholes option pricing model with the
following weighted average assumptions: expected life of options of 7 years,
expected volatility of 157%, risk-free interest rate of 4% and no dividend
yield. The weighted average fair value at the date of grant for options granted
approximated $.019 per option. The Company has recorded $69,309 of amortization
on deferred compensation for the nine months ended September 30,
2007.
 During
the quarter ended September 30, 2007, the Company recorded $27,815 of
amortization on deferred compensation for options granted in November, 2006 and
June, 2007.
  7.
              Subsequent
      Events
 
 On
October 1, 2007 the Board approved 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.
 
 On
October 12, 2007, Mr. Woody McGee resigned from our Board of
Directors.
 
 In
November 2007, the Board approved issuance, 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 remaining 1,450,000
incentive stock options were issued to employees.  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.
  
 Index  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, the Board approved issuance, to Creative Hospitality Associates
(“CHA”) a Warrant pursuant to a sales agent Agreement with CHA (the
“Agreement”).
 
 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 Board approved the issuance to employees and consultants, under
our 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 Board approved issuance, under our 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 the Company 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 Registrant 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 Registrant’s election, shares of the
Registrant’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.
  
 Index   In
connection with the Purchase Agreement, the Registrant entered into a
Registration Rights Agreement (a copy of which is attached hereto as Exhibit
10.2 and incorporated herein by reference). Pursuant to the Registration Rights
Agreement, the Registrant 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.
 
 On August
19, 2008, the Board approved issuance, under our 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 Board approved issuance, 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 Board approved issuance of 1,200,000 shares of common stock as
payment to the Board of Directors for compensation owed to them for the year
ended December 31, 2007. 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
  Roomlinx,
Inc., a Nevada corporation ("We," "Us" or the "Company"), provides two core
products and services:
  1. 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. The Company installs and creates
services that address the productivity and communications needs of hotel guests,
convention center exhibitors and corporate apartment customers. We specialize in
providing advanced Wi-Fi wireless services such as the wireless standards known
as 802.11a/b/g.
  Hotel
customers sign long-term service agreements, where we provide the maintenance
for the networks, as well as the right to provide value added services over the
network.
  We derive
our revenues primarily from the installation of the wired and wireless networks
we provide to hotels, convention centers and apartment buildings. We derive
additional revenue from the maintenance of these networks. Customers typically
pay a one-time fee for the installation of the network and then pay monthly
maintenance fees for the upkeep and support of the network. During March 1999,
we commenced offering our services commercially. Since our inception, we have
invested significant capital to build our technical infrastructure and network
operations.
  2.
In-room media and entertainment solutions for hotels, resorts, and time-share
properties.  The Company develops software and integrates hardware to
facilitate the distribution of entertainment, business applications, national
and local advertising, and content.  The content consists of adult,
Hollywood, and specialty programming, music, internet based television
programming, digital global newspapers, global radio and television stations,
business applications (allowing the guest to use Microsoft Office programs), and
hotel-specific services and advice.
  The
Company provides proprietary software an LCD television, a media console
(consisting of a full powered pc, DVD player, CD/DVD burner, and numerous input
jacks for the hotel guest), a wireless keyboard with built-in mouse, and a
remote control.
  The
Company installs and supports these components.
  
 Index   Hotel
customers sign long-term service agreements, where we provide the maintenance
for the networks, as well as the right to provide value added services over the
network.
  We derive
our revenues primarily from charging the hotels a monthly fee for the usage of
our software and proprietary media and entertainment system.   We
derive additional revenue from the rental of movies, printing service,
advertising and sale of products through our system.  We began
marketing this product in September 2007.  Since June 2007, we have
invested significant capital to develop our software, integrate our hardware,
and develop significant product and content partnerships.
  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.
  We
currently have our media and entertainment product installed into the Jet Hotel
in Downtown Denver as a pilot.  We have signed agreements to install
into select rooms, as pilots, with a select service property in the Denver
Technological Center, managed and owned by a large hotel corporation, and with a
full service hotel located in Chicago, IL, which is also owned by a large hotel
corporation.  We have signed an exclusive contract to provide our
media and entertainment and HSIA products and services to the Kessler Collection
of hotels, (www.kesslercollection.com).   We have signed
contracts to install into the Bohemian Resort Biltmore Village in Asheville, NC
and into select rooms of the Country Inn and Suites in Merryville,
IN.  We also have a signed contract to install 120 rooms of a full
service hotel in the Chicago, IL vicinity.
  We
affected a reorganization on June 28, 2004, when the Company completed its
merger with Arc Communications Inc. ("ARC").  The transaction has been
accounted for as a recapitalization, which is accounted for similar to the
issuance of stock by Old Roomlinx for the net assets of Arc with no goodwill or
other intangibles being recorded. Concurrent with the closing, ARC changed its
name to Roomlinx, Inc.  Roomlinx is considered the accounting
acquirer; accordingly the historical financial statements are those of
Roomlinx.
  On August
10, 2005, the Company completed its acquisition of SuiteSpeed, Inc.
(“SuiteSpeed.)
 
 SuiteSpeed,
a privately-held company based in Colorado, provides high speed wireless
internet access solutions to hotels.  SuiteSpeed’s activities are
complimentary to those of the Company and the acquisition of SuiteSpeed will
enhanced the depth and width of the Company’s activities.
 
 The
acquisition of SuiteSpeed was accounted for as a business combination in
accordance with SFAS No. 141 and SuiteSpeed’s operating results are included in
the Company’s consolidated results of operations since the date of
acquisition.
 
 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:
 
 -
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.
 
 
 Index
   RESULTS OF OPERATIONS
 
 Three months ended September
30, 2007 compared to three months ended September 30, 2006:
  For the
three months ended September 30, 2007, we reported net income of $311,248,
compared to a net loss of ($27,766) for the three months ended September 30,
2006.  Our operating loss for the three months ended September
30, 2007 was $216,054, a decline in operating results of
$226,687 compared to the operating income of $10,633 that we reported for
the three months ended September 30, 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, offset by derivative income was a primary factor in the
results.
  System sales and installation
revenue. System sales and installation revenue decreased 62% to $54,779
during the three months ended September 30, 2007 from $143,397 during the
three months ended September 30, 2006.  We installed one new
customer during the three months ended September 30, 2007, compared to
two new installations during the three months ended September 30,
2006.  This component of our revenue stream is dependent upon the
acquisition of new customers, which can vary from year to year.
  Service, maintenanceand usage
revenue. Service, maintenance and usage revenue decreased 8% to $333,484
for the three months ended September 30, 2007 from $361,557 for the three
months ended September 30, 2006. The decrease was due to a decrease in the
number of customers we service on a recurring basis to a total of
166 customers (representing 28,959 rooms) compared to 190 customers
(representing 34,169 rooms) as of September 30, 2006.
  Cost of system sales and
installation. Cost of system sales and installation decreased 57% to
$44,892 for the three months ended September 30, 2007 from $103,930 for the
three months ended September 30, 2006. The decrease was primarily attributable
to the decreased corresponding revenue during the period.
  Cost of service, maintenance
and usage. Cost of service, maintenance and usage decreased 6% to
$240,593 for the three months ended September 30, 2007 from
$256,588 for the three months ended September 30, 2006.  The
decrease was primarily attributable to the decreased corresponding revenue
during the period.
  Sales and marketing.
Sales and marketing expense increased by $13,479 to $48,390 during the
three months ended September 30, 2007 from $34,911 for the three months
ended September 30, 2006.  During 2007, we increased our sales force
and continued marketing our new media and entertainment
product.  Such measures included staff additions resulting in
increased personnel and personnel related costs of $13,474; an increase in
travel expenses of $150, offset by a decrease in advertising expense of
$145.
  Product Development.  In 2007, we created a new department to handle the majority
of the design, production, and promotion of our new media and entertainment
product.  This new department incurred costs of $106,478 during the
three months ended September 30, 2007.  This cost included $23,058 in
labor and personnel expense; $76,638 in equipment and licensing; and $6,783 in
travel costs.
  Stock
compensation. For the three months ended September 30, 2007, the Company recorded
$27,815 of amortization of deferred compensation related to stock options
granted in November 2006.
  General and
administrative. General and administrative expense increased by
$37,379 to $133,246 for the three months ended September 30, 2007 from
$95,867 for the three months ended September 30, 2006. During 2007,
personnel and personnel related costs increased $26,513 to $66,728 in 2007 from
$40,216 in 2006.  Office related costs such as rent, telephone, and
insurance increased $6,148 from $23,900 in 2006 to $30,048 in 2007. We also did
not incur travel expenses during the three months ended September 30, 2007
compared to the $259 during the three months ended September 30,
2006.  Professional fees, SEC fees, and investor relations fees
decreased $947 from $26,600 in 2006 to $25,653 in 2007.  Bad debt
expense increased $5,925 to $10,816 for the three months ended September 30,
2007 compared to $4,891 for the three months ended September 30,
2006.
  
 Index
   Depreciation of property and
equipment. Depreciation of property and equipment decreased to $2,903 for
the three months ended September 30, 2007 as compared to $3,025 for the
three months ended September 30, 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 decreased $55,511 to $36,294 for the three months ended
September 30, 2007 as compared to $91,805 for the three months ended September
30, 2006. The decrease is attributable to the settlement of outstanding and
defaulted debt.
  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
$1,578 for the three months ended September 30, 2007 compared to a gain of
$15,525 for the three months ended September 30, 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.
  Income from discharge of
indebtedness. During the
three months ended September 30, 2007, the Company negotiated settlements with
several vendors and realized discharge of indebtedness income of
$6,506.  The corresponding income for the three months ended September
30, 2006 was $37,473.
  Derivative income (expense),
net.Derivative instruments income of $548,965 represents the net
unrealized (non-cash) change during the three months ended September 30, 2007,
in the fair value of our derivative instrument liabilities related to certain
embedded derivatives in our convertible debt that have been bifurcated and
accounted for separately.  There was no derivative instrument expense
during the three months ended September 30, 2006.
  Nine months ended September
30, 2007 compared to nine months ended September 30, 2006:
  For the
nine months ended September 30, 2007, we reported a net loss of
$5,947, compared to net income of $510,356, for the nine months ended
September 30, 2006.  Our operating loss for the
nine months ended September 30, 2007 was $733,922, a
decline in operating results of $900,315 compared to the operating
income of $166,393 that we reported for the nine months ended
September 30, 2006.  As discussed below, in 2007 we began investing
significant capital in the design, production, and marketing of our new media
and entertainment product.
  System sales and
installation revenue. System sales and installation revenue
increased 11% to $552,998 during the nine months ended September 30,
2007 from $497,330 during the nine months ended September 30,
2006.  We installed 8 new customers and did 11 upgrades on
existing customers during the nine months ended September 30, 2007,
compared to 8 new installations during the nine months ended September
30, 2006.  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 11%
to $1,001,468 for the nine months ended September 30, 2007 from
$1,121,400 for the nine months ended September 30, 2006. The
decrease was due to a decrease in the number of customers we service
on a recurring basis to a total of 166 customers (representing
28,959 rooms) compared to 185 customers (representing 32,922 rooms) as
of September 30, 2006.
  Backlog. As of
September 30, 2007, we did not have any customer installations in
progress.  As of September 30, 2007, there were 7 service
contracts scheduled to conclude during the fourth quarter of 2007.
All 7 of the customers continued their service with us.
  Cost of system sales and
installation. Cost of system sales and installation decreased 26% to
$239,065 for the nine months ended September 30, 2007 from $323,881 for the nine
months ended September 30, 2006. Although the number of installs and upgrades
increased from 2006 to 2007, the overall number of rooms involved in those
installs and upgrades decreased, thereby reducing the costs of the
installations.
  Cost of service, maintenance
and usage. Cost of service, maintenance and usage increased 18% to
$839,273 for the nine months ended September 30, 2007 from $713,765
for the nine months ended September 30, 2006. The increase is
attributable to an increase in operational and technical personnel costs of
$61,588 and increased support and warranty costs of $63,921.
  
 Index   Sales and marketing.
Sales and marketing expense increased by $35,731 to $153,973 during the
nine months ended September 30, 2007 from $118,242 for the nine
months ended September 30, 2006.  During 2007, we increased our
sales force and began marketing our new media and entertainment
product.  Such measures included staff additions resulting in
increased personnel and personnel related costs of $34,793; an increase in
travel expenses of $1,927, offset by a decrease in advertising expense of
$989.
  Product Development.In 2007, we created a new department to handle the majority of the
design, production, and promotion of our new media and entertainment
product.  This new department incurred costs of $182,736 during the
nine months ended September 30, 2007.  This cost included $63,681 in
labor and personnel expense; $106,638 in equipment and licensing; and
$12,417 in travel costs.
  Stock
compensation. For the nine months ended September 30, 2007, the Company recorded
$306,055 of amortization of deferred compensation related to stock options
granted in November 2006.
  General and
administrative. General and administrative expense increased by
$88,162 to $358,621 for the nine months ended September 30, 2007 from
$270,460 for the nine months ended September 30, 2006. During 2007
personnel and personnel related costs increased $46,585 to $164,758 in 2007 from
$118,173 in 2006.  Office related costs such as rent, telephone, and
insurance increased $3,344 from $73,820 in 2006 to $77,164 in 2007. Travel
expenses decreased $1,975 to $4,882 during the nine months ended September 30,
2007 compared to the $6,856 during the nine months ended September 30,
2006.  Professional fees, SEC fees, and investor relations fees
increased $30,952 from $58,925 in 2006 to $89,877 in 2007.  Bad debt
expense increased $9,256 to $21,940 for the nine months ended September 30, 2007
compared to $12,684 for the nine months ended September 30, 2006.
  Depreciation of property and
equipment. Depreciation of property and equipment decreased to $6,961 for
the nine months ended September 30, 2007 as compared to $25,989 for
the nine months ended September 30, 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 decreased $126,194 to $154,841 for the nine months ended
September 30, 2007 as compared to $281,035 for the nine months ended September
30, 2006. The decrease is attributable to the settlement of outstanding and
defaulted debt.
 
 Financing
expenses.  We incurred $252,207 in financing costs related to
the June 11, 2007 issuance of convertible debentures.  We also
incurred $150,000 of debt discount financing expense in during 2007 relating to
warrants issued in 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 $9,432
for the nine months ended September 30, 2007 compared to a gain of $32,775 for
the nine months ended September 30, 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.
 
 Income from discharge of
indebtedness. During the
nine months ended September 30, 2007, the Company negotiated settlements with
several vendors and realized discharge of indebtedness income of
$1,716,662.  The corresponding income for the nine months ended
September 30, 2006 was $591,986.
 
 Derivative Instruments
Expense, net.Derivative instruments expense of $579,383 represents the
net unrealized (non-cash) change during the nine months ended September 30,
2007, in the fair value of our derivative instrument liabilities related to
certain embedded derivatives in our convertible debt that have been bifurcated
and accounted for separately.  There was no derivative instrument
expense during the nine months ended September 30, 2006.
  
 Index   LIQUIDITY AND CAPITAL RESOURCES
 
 Since our
inception, we 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 June 30, 2006. 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 June 30, 2006, and continuing throughout 2006 and 2007 we were generally
unable to pay our financial obligations as they matured and we were in default
of the provisions of certain indebtedness.
  As of
September 30, 2007 we had $1,052,344 in cash and cash equivalents, which
amount is not sufficient to fund operating activities and continue investing in
our new media & entertainment product 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.
  Net cash
used by operating activities was $401,627 for the nine months ended September
30, 2007 as compared to $73,400 for the nine months ended September 30,
2006.
 
 Net cash
provided by financing activities was 1,334,897 for the nine months ended
September 30, 2007 as compared to $(82,500) for the nine months ended September
30, 2006.  During the nine months ended September 30, 2007 we used
cash of $965,103 for principal payments and received $2,300,000 in convertible
debenture proceeds.
  As of
June 11, 2007, we reached agreement with certain of our debt holders whereby we
repaid and/or 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
      $280,000.    All outstanding penalties and interest
      were waived and the Company settled for $140,000.3.
              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.
  
 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 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.
 
 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 September 30, 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
 
 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.
  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:
              9/26/08
 
 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 Officer,Chief Financial Officer and DirectorDate:
              9/26/08