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, 2006
 
 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 incorporation or organization)
              (I.R.S.
      Employer 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 June 23, 2008
was 151,892,050.
 
 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,
      2006Consolidated Statements of Operations for the Three and
      Nine Months Ended September 30, 2006 and 2005Consolidated Statements of Cash Flows for the Nine Months
      Ended September 30, 2006 and 2005Notes to Consolidated Financial
    StatementsItem 2.
              Management's Discussion and Analysis of Financial Condition
      and Results of OperationsGeneralCritical Accounting Policies and
    EstimatesForward-Looking StatementsResults of OperationsLiquidity and Capital ResourcesForeign
      Currency Exchange Rate RiskRecent
      Accounting PronouncementsItem
      3.
              Controls and ProceduresPART II.  OTHER INFORMATIONItem 2.
              Unregistered Sales of Equity Securities and Use of
      ProceedsItem 3.
              Defaults under Senior SecuritiesItem 6.
              ExhibitsSignatures
  Index
  PART I.  FINANCIAL INFORMATION
  Index
  RoomLinX,
Inc.
 CONSOLIDATED BALANCE
SHEET
 September
30, 2006
 (Unaudited)
 
 
 ASSETSCurrent
      assets:Cash
      and cash equivalents
              
              $
              24,856Accounts
      receivable, net
              
              
              483,697Prepaid
      and other current assets
              
              
              22,169Work
      in progress
              
              
              58,189Total
      current assets
              
              
              588,911Property
      and equipment, net
              
              
              15,141Total
      assets
              
              $
              604,052LIABILITIES AND
      STOCKHOLDERS' (DEFICIT)Current
      liabilities:Accounts
      payable and accrued expenses
              
              $
              546,527Convertible
      debentures
              
              
              1,100,000Notes
      payable
              
              
              245,000Officer
      and stockholder notes payable
              
              
              287,500Accrued
      interest and penalties
              
              
              429,420Obligations
      under capital lease
              
              
              330,255Deferred
      revenue
              
              
              342,545Total
      current liabilities
              
              
              3,281,247Stockholders'
      (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:
                132,868,381
      shares issued and outstanding
              
              
              132,868Additional
      paid-in capital
              
              
              18,544,462Accumulated
      (deficit)
              
              
              (21,498,525
              )Total
      stockholders' (deficit)
              
              
              (2,677,195
              )Total
      liabilities and stockholders' (deficit)
              
              $
              604,052
  Index
  RoomLinX,
Inc.
 CONSOLIDATED STATEMENTS OF
OPERATIONS
 (Unaudited)
 
 
 Three
      Months Ended
              
              
              Nine
      Months EndedSeptember
      30,
              
              
              September
      30,2006
              
              
              2005
              
              
              2006
              
              
              2005RevenuesSystem
      sales and installation
              
              $
              143,397
              
              
              $
              177,311
              
              
              $
              497,330
              
              
              $
              795,846Service,
      maintenance and usage
              
              
              361,557
              
              
              
              460,374
              
              
              
              1,121,400
              
              
              
              889,277504,954
              
              
              
              637,685
              
              
              
              1,618,730
              
              
              
              1,685,123Costs
      and ExpensesSystem
      sales and installation
              
              
              103,930
              
              
              
              114,434
              
              
              
              323,881
              
              
              
              630,277Service,
      maintenance and usage
              
              
              256,588
              
              
              
              168,177
              
              
              
              713,765
              
              
              
              781,080Sales
      and marketing
              
              
              34,911
              
              
              
              71,056
              
              
              
              118,242
              
              
              
              413,380General
      and administrative
              
              
              95,867
              
              
              
              361,149
              
              
              
              270,460
              
              
              
              1,112,430Depreciation
              
              
              3,025
              
              
              
              70,989
              
              
              
              25,989
              
              
              
              133,838494,321
              
              
              
              785,805
              
              
              
              1,452,337
              
              
              
              3,071,005Operating
      income (loss)
              
              
              10,633
              
              
              
              (148,120
              )
              
              
              166,393
              
              
              
              (1,385,882
              )Other
      income (expenses)Write
      down of assets
              
              
              -
              
              
              
              (72,968
              )
              
              
              -
              
              
              
              (72,968
              )Interest
      expense
              
              
              (91,805
              )
              
              
              (439,455
              )
              
              
              (281,035
              )
              
              
              (1,284,548
              )Financing
      expense
              
              
              -
              
              
              
              32,676
              
              
              
              -
              
              
              
              (114,000
              )Foreign
      currency gain (loss)
              
              
              15,525
              
              
              
              18,093
              
              
              
              32,775
              
              
              
              32,637Other
      income
              
              
              408
              
              
              
              -
              
              
              
              237
              
              
              
              -Income
      from discharge of indebtedness
              
              
              37,473
              
              
              
              -
              
              
              
              591,986
              
              
              
              -(38,399
              )
              
              
              (461,654
              )
              
              
              343,963
              
              
              
              (1,438,879
              )Income
      (loss) before income taxes
              
              
              (27,766
              )
              
              
              (609,774
              )
              
              
              510,356
              
              
              
              (2,824,761
              )Provision
      for income taxes
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Net
      income (loss)
              
              $
              (27,766
              )
              
              $
              (609,774
              )
              
              $
              510,356
              
              
              $
              (2,824,761
              )Net
      income (loss) per common share:Basic
              
              $
              (0.00
              )
              
              $
              (0.01
              )
              
              $
              0.00
              
              
              $
              (0.03
              )Diluted
              
              $
              (0.00
              )
              
              $
              (0.01
              )
              
              $
              0.00
              
              
              $
              (0.03
              )Weighted
      average shares outstanding:Basic
              
              
              132,868,381
              
              
              
              115,174,703
              
              
              
              132,868,381
              
              
              
              109,772,467Diluted
              
              
              132,868,381
              
              
              
              115,174,703
              
              
              
              176,365,048
              
              
              
              109,772,467
  Index
  RoomLinX, Inc.
 CONSOLIDATED STATEMENTS OF
CASH FLOWS
 for
the Nine Months Ended September 30, 2006 and 2005
 (Unaudited)
 
 
 2006
              
              
              2005Cash
      flows from operating activities:Net
      cash (used in) operating activities
              
              $
              (73,400
              )
              
              $
              (975,678
              )Cash
      flows from investing activities:Cash
      received in the merger
              
              
              -
              
              
              
              12,042Net
      cash provided by investing activities
              
              
              -
              
              
              
              12,042Cash
      flows from financing activities:Cash
      proceeds from convertible debentures
              
              
              -
              
              
              
              993,500Principal
      payments on convertible debenture
              
              
              -
              
              
              
              (10,000
              )Cash
      proceeds from notes payable
              
              
              -
              
              
              
              125,000Principal
      payments on notes payable
              
              
              (90,000
              )
              
              
              (68,303
              )Cash
      proceeds from officer and stockholder notes payable
              
              
              7,500
              
              
              
              30,000Net
      cash (used in) provided by financing activities
              
              
              (82,500
              )
              
              
              1,070,197Net
      increase (decrease) in cash and equivalents
              
              
              (155,900
              )
              
              
              106,561Cash
      and equivalents at beginning of period
              
              
              180,756
              
              
              
              10,141Cash
      and equivalents at end of period
              
              $
              24,856
              
              
              $
              116,702Supplemental
      Cash Flow InformationInterest
      paid
              
              $
              14,653
              
              
              $
              2,095Non-cash
      investing and financing activities:Value
      of warrants issued and beneficial conversion in conjunction with loans and
      convertible debt
              
              $
              -
              
              
              $
              1,100,000
  Index
  RoomLinX, Inc.
 Notes
to Consolidated Financial Statements
 September
30, 2006
 (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, 2005.
 
 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.
 
 Stock
Option Plans:    Effective January 1, 2006, we
implemented SFAS No. 123(R), “Share-BasedPayments,” which requires us to provide
compensation costs for our stock option plans determined in accordance with the
fair value based method prescribed in SFAS No. 123(R).  We estimate
the fair value of each stock option at the grant date by using the Black-Scholes
option-pricing model and provide for expense recognition over the service
period, if any, of the stock option.    Prior to January 1,
2006, we applied APB Opinion 25, “Accounting for Stock Issued to Employees,” and
related interpretations in accounting for all stock option
plans.  Under APB Opinion 25, the intrinsic value method was applied
and no compensation expense was recognized for stock options issued to employees
as the exercise price of the stock options we granted equaled or exceeded the
market price of the underlying common stock on the date of
grant.
 
 Reclassification:    Certain
amounts in the 2005 financial statements have been reclassified to conform to
the 2006 presentation.  There is no effect on previously reported net
income or earnings per share.
  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 September 30, 2006,
had a working capital deficit of $2,692,336, an accumulated deficit of
$21,498,525, and a stockholders' deficit of $2,677,195.  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.     Officer
and Stockholder Notes Payable
  Index
  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 and
the outstanding balance at September 30, 2006 is $280,000.  The
borrowing arrangement included warrants to purchase 1,600,000 shares of common
stock at $0.10 per share.  Using the Black-Scholes derivative pricing
model, the Company determined that the warrants had a fair value of $69,500,
which has been recorded as a debt discount and additional paid in
capital.  The debt discount was amortized as interest expense over the
six month life of the promissory notes, which includes $59,083 amortized in
2005.
 
 The
Company was not able to retire the promissory notes as scheduled and, as of
September 30, 2006, was in default of the repayment terms.  Subsequent
to September 30, 2006, the notes were settled for $140,000 (see Note
7).
 
 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.
 
 
 4.     Notes
Payable
 
 As
part of the SuiteSpeed merger, RoomLinX assumed a $300,000 promissory note
payable to the First National Bank of Colorado.  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.  At September 30, 2006, the outstanding balance was
$170,000.  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
bears interest at 10% and is due on demand. Subsequent to September 30, 2006,
the note was settled for $37,500 (see Note 7).
 
 5.     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.  Net cash proceeds from
the Debentures were $986,000, after deducting fees and expenses paid to Casimir
Capital LLP, the placement agent.  As additional consideration for the
investors, the Company issued warrants to purchase 9,533,333 shares of common
stock at a price of $0.075 per share.  The warrants expire five years
from the date of issue.
 
 The
Company agreed to pay Casimir Capital LLP a placement agent fee of $99,000 and
reimburse legal and administrative expenses of $15,000.  These
financing costs were recorded as a component of other expense during
2005.  As additional consideration to Casimir Capital LLP, the Company
issued warrants to purchase 1,430,000 shares of common stock at a price of
$0.075 per share.  The warrants expire five years from the date of
issue.
 
 The
Debentures contain a beneficial conversion feature with an intrinsic value of
$767,442, which was recorded as debt discount and a contribution to
capital.  The value of the warrants was calculated using the Black
Scholes derivative pricing model and a value of $332,558 was allocated to the
warrants.  The warrant value was recorded as a debt discount and a
contribution to capital.  The entire debt discount of $1,100,000 was
amortized over the term of the Debentures and is included as a component of
other expense during 2005.
 
 The
Company was unable to retire the Debentures as scheduled on September 2, 2005
and, as of September 30, 2006, was in default of the repayment terms. Subsequent
to September 30, 2006, the debentures were settled for $550,000 (see Note
7).
 
 6.     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 September 30, 2006, there were 720,000 shares of
preferred stock issued and outstanding.  Dividends accrued and unpaid
as of September 30, 2006 were $104,160.
  Index
  Common
Stock:   The Company has authorized 245,000,000
shares of $0.001 par value common stock.  As of September 30, 2006,
there were 132,868,381 shares of common stock issued and
outstanding.
 
 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
March 5, 2005, the Company issued warrants to purchase 9,533,333 shares of stock
to the 17 debenture holders as additional consideration under the Convertible
Debentures.  On March 5, 2005, the Company also issued warrants to
purchase 1,430,000 shares of stock to Casimir Capital as additional
consideration for services associated with the Convertible Debenture
transaction.  These warrants have an exercise price of $0.075 per
share and expire five years from the date of issue.
 
 From
November 2004 through January 2005, the Company issued warrants to purchase
1,600,000 shares of common stock to officers and stockholders as additional
consideration under Promissory Notes issued at the same
time.  (1,250,000 warrants were issued during 2004 and 350,000 were
issued during 2005)  These warrants have an exercise price of $0.10
per share and expire two years from the date of issue.
 
 
 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
              
              
              3
              
              
              $
              822,250$
              0.100
              
              
              
              1,600,000
              
              
              <1
              
              
              
              160,000$
              0.150
              
              
              
              7,666,667
              
              
              <1
              
              
              
              1,150,00020,230,000
              
              
              
              
              
              
              $
              2,132,250
              
              
              $
              0.105
 
 
 Warrants
              
              Number
      of Shares
              
              
              Weighted
      Average Exercise PriceOutstanding
      at January 1, 2006
              
              
              27,076,950
              
              
              $
              0.134Issued
              
              
              ---
              
              
              
              ---Exercised
              
              
              ---
              
              
              
              ---Expired
      / Cancelled
              
              
              (6,846,950
              )
              
              
              0.220Outstanding
      at June 30, 2006
              
              
              20,230,000
              
              
              $
              0.105
 
 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, 2006, options
to purchase 8,600,000 shares were outstanding and 16,400,000 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 Options
 
 Exercise
      Price
              
              
              Number
      of Shares
              
              
              Remaining
      Contractual Life (in years)
              
              
              Exercise
      Price times Number of Shares
              
              
              Weighted
      Average Exercise Price$
              0.026
              
              
              
              1,000,000
              
              
              8
              
              
              $
              26,000$
              0.010
              
              
              
              6,000,000
              
              
              4
              
              
              
              60,000$
              0.100
              
              
              
              1,000,000
              
              
              2
              
              
              
              100,000$
              0.080
              
              
              
              600,000
              
              
              <1
              
              
              
              48,0008,600,000
              
              
              
              
              
              
              $
              234,000
              
              
              $
              0.027
  Index
 
 Options
              
              Number
      of Shares
              
              
              Weighted
      Average Exercise PriceOutstanding
      at January 1, 2006
              
              
              8,600,000
              
              
              $
              0.027Granted
              
              
              -
              
              
              
              -Exercised
              
              
              -
              
              
              
              -Expired
              
              
              -
              
              
              
              -Outstanding
      at September 30, 2006
              
              
              8,600,000
              
              
              $
              0.027Exercisable
      at September 30, 2006
              
              
              8,600,000
              
              
              $
              0.027
 
  7.     Subsequent
Events
  On November 20, 2006, we issued (i) to
each of Peter Bordes and Herbert Hunt, 3,000,000 shares of our Common Stock
having an aggregate value of $60,000 on such date as payment in full of their
respective Board compensation owed to them for the three-year period 2004 – 2006
and (ii) to Aaron Dobrinsky, 1,000,000 shares of our Common Stock having an
aggregate value of $20,000 as payment in full of his respective Board
compensation owed to him for 2006.
 
 On
November 20, 2006, we granted under our Long-Term Incentive Plan, an aggregate
of 12,300,000 Incentive Stock Options (“ISOs”) and an aggregate of 3,600,000
Non-Qualified Stock Options (“NQOs”).  10,000,000 of the ISOs were
granted to Michael S. Wasik, the President, Chief Executive Officer and Chief
Financial Officer of the Company, of which (i) 6,000,000 vested immediately and
(ii) 4,000,000 vest over three years with one-third vesting on the first
anniversary of Mr. Wasik’s employment with the Company and an additional
one-third vesting on each of the following two anniversaries
thereof.  The remaining 2,300,000 incentive stock options were granted
to employees.  1,000,000 of the NQOs were granted to each of Peter
Bordes and Herbert Hunt with respect to their service as members of the Board of
Directors during 2005 and 2006 and vested immediately.  500,000 of the
NQOs were granted to Aaron Dobrinsky with respect to his service as a member of
the Board of Directors during 2006 and vested immediately.  All of
these options were issued at an exercise price of $0.02 per share, representing
the closing price of our common stock on such date.  The remaining
1,100,000 non-qualified stock options were granted to consultants.
 
 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.
  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.
  On
May 4, 2007, the Board of Directors authorized and approved the following
compensation package for each of Peter Bordes and Herbert Hunt for his service
as an independent director for 2007: (i) the payment of the sum of $20,000 on
December 31, 2007 so long as he is serving as an independent director on such
date, and (ii) the grant of Non-Qualified Stock Options under the Registrant’s
Long Term Incentive Plan for the purchase of up to 500,000 shares of the
Company’s common stock at an exercise price equal to the May 4, 2007 closing
trading price of the Company’s common stock, namely $.025 per share, vesting in
full on December 31, 2007 so long as he is serving as an independent director on
such date.  Such compensation was also offered to Mr. Woody McGee;
however, Mr. McGee resigned from the Board of Directors prior to December 31,
2007.
 
 On
June 11, 2007 and June 13, 2007, we closed a financing with certain investors,
pursuant to which we sold an aggregate of $2,350,000.00 principal amount of
Convertible Debentures due May 2012.  Each investor was also
given the option to purchase additional convertible debentures; however, such
options have expired.
  As
of June 11, 2007, we also 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:
  Index
  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 that were issued from November 2004 through January
      2005 that had an outstanding balance of $280,000.  All
      outstanding penalties and interest were waived and the Company settled for
      $140,000.
  3.
              The
      note payable from an individual that had an outstanding balance of
      $75,000.  All outstanding penalties and interest were waived and
      the Company settled for $37,500.
  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 June
20, 2007, we issued warrants to four individuals for services
rendered.  The warrants are initially exercisable for shares of Series
B Preferred Stock and ultimately exercisable into shares of common stock once we
have sufficient shares of common stock available for issuance upon
exercise.  The ultimate number of common shares under warrant coverage
is 7,000,000 at $0.03 per share and 2,962,500 at $0.02 per share.  All
of the warrants have a five year term.
  On August
6, 2007, we issued 7,500,000 shares of our common stock, as compensation for
services rendered to, or the settlement of obligations owed by, the
Company.
 
 On
November 5, 2007, the Registrant’s Board of Directors approved the grant to
employees and consultants, under the Registrant’s Long-Term Incentive Plan, of
an aggregate of 1,450,000 Incentive Stock Options and an aggregate of 800,000
Non-Qualified Stock Options.  Such options were issued at an exercise
price of $0.015 per share and vest one-third (1/3) on each of the first three
anniversaries of the Employment date.
  On
October 1, 2007, the Board approved issuance of 1,699,726 shares of our common
stock, as interest for the third quarter of  2007, pursuant to the
clauses outlined in the convertible debenture agreements of June 11,
2007.
 
 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”).
 
 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.
 
 
 Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
  Index
  GENERAL
 
  RoomLinX, Inc., aNevadacorporation ("We," "Us" or the
"Company"), providestwocore products and
services:
  1. Wired networking solutions andwirelessfidelity 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 standardsknown 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-roommedia andentertainmentsolutions forhotels, resorts, andtime-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 Officeprograms), andhotel-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 keyboardwith
built-in mouse, and a remote control.
  The Company installs and supports these
components.
  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 overthe 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 andsale 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 signed agreements to install our product into two properties as a
Beta test.  The first property is the Jet Hotel in Downtown Denver and
the second property is a select service property in the Denver Technological
Center managed and owned by a large hotel corporation.
  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.)
  Index
  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
enhance the breadth 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.
 
 CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Management's Discussion and Analysis of
Financial Condition and
Results of Operations discuss our financial statements, which have been prepared
in accordance with accounting principles generally accepted in theUnited States. The preparation of these financial
statements requires management to make estimates and judgments that affect the reported amounts
of assets, liabilities, revenues and expenses, and the related disclosures of
contingent assets and liabilities. On an on-going basis, management evaluates
its estimates and judgments, including those related to revenue recognition, allowance for doubtful
accounts and property and equipment valuation. Management bases its estimates
and judgments on historical experience and on various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions and conditions.
  Management believes the following
critical accounting policies, among others, affect its more significant
judgments and estimates used in the preparation of its consolidated financial
statements.
 
 Our system sales and installation
revenue primarily consists of wired and wireless network equipment and
installation fees associated with the network and is recognized as revenue when
the installation is completed and the customer has accepted such installation.
Our service, maintenance and usage revenue, which primarily consists of monthly
maintenance fees related to the upkeep of the network, is recognized on a
monthly basis as services are provided.
 
 We estimate the collectability of our
trade receivables. A considerable amount of judgment is required in assessing
the ultimate realization of these receivables, including analysis of historical
collection rates and the current credit-worthiness of significant customers.
Work in progress represents the cost of hardware and software which has been
purchased by us for installation at our customers’ facilities, but has not been
accepted by the customer.
 
 We capitalize and subsequently
depreciate our property and equipment over the estimated useful life of the
asset. In assessing the recoverability of our long-lived assets, including
goodwill, we must make certain assumptions regarding the useful life and
contribution to the estimated future cash flows. If such assumptions change in
the future, we may be required to record impairment charges for these assets not
previously recorded.
 
 Since inception, we have accumulated
substantial net operating loss carry forwards for tax purposes.  There
are statutory limitations on our ability to realize any future benefit from
these potential tax assets and we are uncertain as to whether we will ever
utilize the tax loss carry forwards.  Accordingly, we have recorded a
valuation allowance to offset the deferred tax asset.
 
 Effective January 1, 2006, we
implemented SFAS No. 123(R), “Share-BasedPayments,” which requires us to provide
compensation costs for our stock option plans determined in accordance with the
fair value based method prescribed in SFAS No. 123(R).  We estimate
the fair value of each stock option at the grant date by using the Black-Scholes
option-pricing model and provide for expense recognition over the service
period, if any, of the stock option. Prior to January 1, 2006, we applied APB
Opinion 25, “Accounting for Stock Issued to Employees,” and related
interpretations in accounting for all stock option plans.  Under APB
Opinion 25, the intrinsic value method was applied and no compensation expense
was recognized for stock options issued to employees as the exercise price of
the stock options we granted equaled or exceeded the market price of the
underlying common stock on the date of grant.
 
 FORWARD-LOOKING STATEMENTS
  Index
  The
statements contained in this annual report (including our statements regarding
future revenue) that are not based on historical fact are "forward- looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. Forward- looking statements may be identified by the use of
forward-looking terminology such as "may," "will," "expect," "estimate,"
"anticipate," "continue," or similar terms, variations of such terms or the
negative of those terms. Such forward-looking statements involve risks and
uncertainties, including, but not limited to: (i) our history of unprofitable
operations, both with respect to our core business and the business previously
performed by Arc Communications, (ii) the significant operating losses that we
have incurred to date, (iii) our lack of liquidity and need for additional
capital which we may not be able to obtain on favorable terms or at all, (iv)
the "going concern" qualification that accompanies our financial statements,
which, among other things, may make it more difficult for us to raise the
additional capital that we require in order to remain in business, (v) the fact
that we have been required to operate with a working capital deficit, which
limits our operating flexibility and opportunities (vi) the substantially
greater resources available to many of our competitors, (vii) our expectation
that we will continue to operate at a loss for the foreseeable future, (viii)
our lack of capital, which substantially restricts our flexibility and
opportunity to increase our revenues, (ix) the importance to us that our
offerings remain technologically advanced if we are to attract new customers and
maintain existing customers, (x) our dependence on certain key employees and key
suppliers, (xi) risks associated with potential intellectual property claims and
(xii) the impact on our business and industry of general economic conditions and
regulatory developments. Such risks and others are more fully described in the
"Risk Factors" set forth in Exhibit 99.1 to this Annual Report. Our actual
results could differ materially from the results expressed in, or implied by,
such forward- looking statements.
  RESULTS OF OPERATIONS
 
 Three months ended September
30, 2006 compared to three months ended September 30, 2005:
  For thethree monthsendedSeptember 30, 2006, we reported a netlossof($27,766), compared to a net loss of($609,774) for thethreemonths endedSeptember30, 2005.  Our operatingincomefor thethreemonths endedSeptember30, 2006was $10,633,an improvement in operating results of
$158,753compared to the operating loss of($148,120) thatwe reported forthe three months ended September 30,2005.  As
discussedbelow, we
significantly reduced sales
and marketing expenses andgeneral andadministrative expenses during
2006.  That reduction, along with increased
revenue, was a primary factor in the improved results.
  System sales
and installation revenue.System sales and installation revenue decreased19% to $143,397during thethree monthsendedSeptember 30, 2006 from $177,311during thethree monthsendedSeptember 30, 2005.  We installedtwonew customers during thethree monthsendedSeptember 30, 2006, compared tofournew installations during thethree monthsendedSeptember 30, 2005.  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 revenuedecreased21% to $361,557 for the three months ended
September 30, 2006 from $460,374for the three months ended September
30, 2005. Thedecreasewas due to andecreasein the number of customers we service on
a recurring basis to a total of190customers (representing 34,169rooms) compared to198customers (representing35,177rooms) as of September 30,
2005.
  Cost of system sales and
installation. Cost of system sales and installation decreased 9% to
$103,930 for the three months ended September 30, 2006 from $114,434 for the
three months ended September 30, 2005. The decrease was primarily attributable
to the decreased corresponding revenue during the year.
  Cost of
service, maintenance and usage. Cost of service, maintenance and usage
increased53% to $256,588for thethree monthsendedSeptember 30, 2006 from $168,177for thethree monthsendedSeptember 30, 2005.  The increase is
mainly attributable to increased usage of our system and a
higher volume of calls to our 24x7 support center.
  Sales and
marketing.Sales and marketing expense decreased by
$36,145to $34,911during thethreemonthsendedSeptember 30, 2006 from $71,056for thethreemonthsendedSeptember 30, 2005.  During 2006, we
implemented significant cost-cutting measures.  Such measures included
staff reductions resulting
in decreased personnel and personnel related costs of $17,741,a reduction in travel expenses of
$5,153, and a reduction in advertising expense
of $13,251.
  Index
  General and
administrative.General and
administrative expense decreasedby $265,282to $95,867for thethreemonthsendedSeptember 30, 2006 from $361,149for thethreemonthsendedSeptember 30, 2005. During 2006 we implemented
significant cost-cutting measures.  As a result of reduction of staff,
personnel related costs werereduced$219,695to $40,167in 2006 from $259,862in 2005.  Office related
costs such as rent, telephone, insurance and supplies were reduced $39,281from $63,042in 2005 to $23,760in 2006.These savings were somewhat offset by
the increasetoprofessional fees, SEC fees, and investor
relations feesof$1,149from $21,961in 2005 to $23,110in 2006, the increase tobad debt expenseof$4,891for thethreemonths ended September 30, 2006
compared to no bad debt expense for thethreemonths ended September30, 2005 as well as added travel
expenses of $259in 2006.
  Depreciation
of property and equipment.
Depreciation of property and equipmentdecreasedto $3,025for thethreemonthsendedSeptember 30, 2006 as compared to $70,989for thethreemonthsendedSeptember 30, 2005.  This reduction is
directly attributable to a change in our business model regarding the ownership
of assets located at our customers’facilities.  Previously we
retained ownership of the assets until the end of the contract and
depreciated the assets over
the life of the contract.  Our new business model transfers ownership
of the assets to the customer at the time of the installation and therefore, no
depreciation expense is recorded as we no longer own the
assets.   Depreciation expenseis 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. Interestexpensedecreased $22,070to $347,650for thethreemonthsendedSeptember 30, 2006 as compared to $439,455for thethreemonthsendedSeptember 30, 2005. 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
maturedand the
factthere was no amortization of debt
discount for the three months ended September 30, 2006 as compared to $373,889
for the three months ended September 30, 2005.  The additional debt
outstanding during 2006 compared to 2005 included the convertible debentures
issued on March 3, 2005 in the aggregate principal amount of $1,100,000 (which
were outstanding for all of 2006 but only a portion of
2005).
  Financing
expenses.  We did
not incur any additional financing costs on the 2005 convertible debentures
during 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 gain of
$15,525for thethreemonthsendedSeptember 30, 2006 compared to a gain of
$18,093for thethreemonthsendedSeptember 30, 2005. 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 fromCanadato theUnited Statesduring 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 September
30, 2006, the Company negotiated settlements with several vendors and realized
discharge of indebtedness income.  There was no corresponding income
for the three months ended September 30, 2005.
 
 Nine months ended September
30, 2006 compared to nine months ended September 30, 2005:
  For theninemonthsendedSeptember30, 2006, we reported net income of
$510,356, compared to a net loss of$(2,824,761), fortheninemonths endedSeptember30,2005.  Our operatingincomefortheninemonths endedSeptember30,2006was$166,393an improvement in operating results of$1,552,275compared to the operating loss of
$(1,385,882) thatwe reported fortheninemonths endedSeptember30,2005.  As discussedbelow, we significantly
reduced salesand marketing
expenses andgeneral andadministrative expenses during
2006.  That reduction, along with increased
revenue, was a primary factor in the improved results.
  System sales
and installation revenue.System sales and installation revenue decreased38% to $497,330during theninemonthsendedSeptember30, 2006 from$795,846during theninemonthsendedSeptember30, 2005.  We installed8new customers during theninemonthsendedSeptember30, 2006, compared to20new installations duringtheninemonthsendedSeptember30,2005.  This component of our
revenue stream is dependent upon the acquisition of new customers, which can
vary from year to year.
  Index
  Service,
maintenance and usage revenue.Service, maintenance and usage revenue
increased26% to $1,121,400for theninemonthsendedSeptember30, 2006 from $889,277for theninemonthsendedSeptember30, 2005. The increase was due to an
increase in the number of customers we service on a recurring basis to a total
of185customers (representing32,922rooms) compared to183customers (representing32,544rooms) as ofSeptember30, 2005.  The increase resulted
from new installsand the
addition of Suite Speed customers.
  Backlog. As ofSeptember30, 2006, we hadthreecustomerinstallationsin progress,allof which were completed during thefourthquarter of2006.  As ofSeptember30, 2006, there were13service contracts scheduled to conclude
duringthethirdquarter of 2006.5of the customers continued their service
with us and8of the customerscancelled their contractual arrangement
with us.
  Cost of system sales and
installation. Cost of system sales and installation decreased 49% to
$323,881 for the nine months ended September 30, 2006 from $630,277 for the nine
months ended September 30, 2005. The decrease was primarily attributable to the
decreased corresponding revenue during the year.
  Cost of
service, maintenance and usage. Cost of service, maintenance and usagedecreased9% to $713,765for theninemonthsendedSeptember30, 2006 from $781,080for theninemonthsendedSeptember30, 2005.
  Sales and
marketing.Sales and
marketing expense decreased by $295,138to $118,242during theninemonthsendedSeptember30, 2006 from $413,380for theninemonthsendedSeptember30, 2005.During 2006, we implemented significant
cost-cutting measures.  Such measures included staff reductions
resulting in decreased personnel and personnel related costsof $192,299; a reduction in travel expenses of$83,677, and a reduction in advertising expense
of $17,453.
  General and
administrative.General and
administrative expense decreased by $841,970to $270,460for theninemonthsendedSeptember30, 2006 from $1,112,430for theninemonthsendedSeptember30, 2005. During 2006,we implemented significant
cost-cutting
measures.  As a result of reduction of staff, personnel related costs
were reduced$692,267to $118,124in 2006 from $810,391in 2005.  Office related
costs such as rent, telephone, insurance and supplies were reduced $153,213from $227,182in 2005to $73,969in 2006.Professional fees, SEC fees, and investor
relations feesdecreased
$166,481from $225,306in 2005 to $58,825in 2006.These savings were somewhat
offset by the increase of bad debt expense to $12,684for theninemonths endedSeptember30, 2006 compared to no bad debt expense
for theninemonths endedSeptember30, 2005 as well as added travel expenses
of $32,575in 2006.
  Depreciation
of property and equipment.
Depreciation of property and equipmentdecreasedto $25,989for theninemonthsendedSeptember30, 2006 as compared to $133,838for theninemonthsendedSeptember30, 2005.  This reduction is
directly attributable to a changein ourbusiness model regarding the ownership
of assets located at our customers’facilities.  Previously we retained ownership of the assets
until the end of the contractand depreciatedthe assets over the life of the
contract.  Our new business model transfers ownership of the assets to
the customer at the time of the installation and therefore, no
depreciation expense is
recorded as we no longer own the assets.   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.
  Other
expense.  In
2005, we reported significant items of other expense related to our various
financings.
  Interest
expense. Interest expensedecreased $1,003,513to $281,035for theninemonthsendedSeptember30, 2006 as compared to $1,284,548for theninemonthsendedSeptember30, 2005. Thedecreaseis attributable to thefact there was no amortization of debt
discount for the nine months ended September 30, 2006 as compared to $785,194
for the ninemonths ended
September 30, 2005, offset
by the increased principle balance of outstanding debt and the increase in
interest rates and penalties associated with our inability to retire the debt as
it matures..  The
additional debt outstanding during 2006 compared to 2005 included the convertible
debentures issued on March 3, 2005 in the aggregate principal amount of
$1,100,000 (which were outstanding for all of 2006 but only a portion of
2005).
  Financing
expenses.  We did
not incur any additional financing costs on the 2005 convertible debentures
during 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 againof $32,775for theninemonthsendedSeptember30, 2006 compared to a gain of
$32,637for theninemonthsendedSeptember30, 2005. 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 fromCanadato theUnited Statesduring 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.
  Index
  Income from
discharge of indebtedness.During the nine months ended September
30, 2006, the Company negotiated settlements with several vendors and realized
discharge of indebtedness income.  There was no corresponding income
for the nine months ended September 30, 2005.
  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 throughJune 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.
  We have incurred significant operating
losses since our inception and as ofSeptember30,2006 had a working capital deficiency
and stockholder’s deficit of $(2,692,336) and $(2,677,195), respectively. Although we succeeded
in generatingnetincome of $510,356intheninemonths endedSeptember30,2006, which exceeded the $73,400used to fundoperations by $436,956, the cumulative deficiency and deficit
raise substantial doubt about our ability to continue as a going
concern.
  As ofSeptember30, 2006 we had $24,856in cash and cash equivalents, which
amount is not sufficient to fund operatingactivities duringthe remainder of 2006and2007.  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.
  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.  Net cash proceeds from the
Debentures were $993,500, after deducting fees and expenses paid to Casimir
Capital LLP, the placement agent.  As additional consideration for the
investors, the Company issued warrants to purchase 9,533,333 shares of common
stock at a price of $0.075 per share.  As additional consideration to
Casimir Capital LLP, the Company issued warrants to purchase 1,430,000 shares of
common stock at a price of $0.075 per share.  All of the warrants
expire five years from the date of issue.
 
 The
Company was unable to retire the Debentures as scheduled on September 2, 2005
and was in default.  During 2007 the Company negotiated a settlement
with the debenture holders.
 
 Net cash
used by operating activities was $73,400 for the nine months ended September 30,
2006 as compared to $975,678 for the nine months ended September 30,
2005.
  Index
  Net cash
provided by financing activities was ($82,500) for the nine months ended
September 30, 2006 as compared to $1,070,197 for the nine months ended September
30, 2005.  During the nine months ended September 30, 2006 we used
cash of $90,000 for principal payments and received $7,500 in share-holder
loans.
 
 Prior to
the business combination with ARC, the Company entered into a series of capital
lease transactions with a third party lessor in Canada.  Subsequent to
the business combination, the Company ceased making payments to the lessor and
abandoned the assets under capital leases.  The lessor has not
demanded that the Company make additional payments and the Company believes that
it has meritorious defenses against any claims by the lessor.  The
Company has attempted to negotiate a settlement with the lessor but has been
unable to obtain an unconditional release.
 
 For
accounting purposes, the Company has determined that it should continue to
report the capital lease obligation as a liability until it either obtains an
unconditional release or the statute of limitations bars collection actions
against the Company.  Accordingly, a current liability of $330,255 has
been included in the financial statements as a potential capital lease
obligation.
 
 As of
September 30, 2006, our primary financial commitments consisted of $3,281,247
recorded as current liabilities plus future obligations under operating
leases.  Total future payments under operating leases were $71,562 at
September 30, 2006, including $9,556 due during 2006 and $24,313 due during
2007. 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:
  4.
              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.
  5.
              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.
  6.
              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.
  Index
  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, 2006.
 
 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 financialreporting 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
implementedand
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
November 20, 2006, we issued to (i) to each of Peter Bordes and Herbert Hunt,
3,000,000 shares of our Common Stock having an aggregate value of $60,000 on
such date as payment in full of their respective Board compensation owed to them
for the three-year period 2004 – 2006 and (ii) to Mr. Dobrinsky, 1,000,000
shares of our Common Stock as payment in full of his respective Board
compensation owed to him for 2006.
 
 On
November 20, 2006, we granted under our Long-Term Incentive Plan, an aggregate
of 12,300,000 Incentive Stock Options (“ISOs”) and an aggregate of 3,600,000
Non-Qualified Stock Options (“NQOs”).  10,000,000 of the ISOs were
granted to Michael S. Wasik, the President, Chief Executive Officer and Chief
Financial Officer of the Registrant, of which (i) 6,000,000 vested immediately
and (ii) 4,000,000 vest over three years with one-third vesting on the first
anniversary of Mr. Wasik’s employment with the Registrant and an additional
one-third vesting on each of the following two anniversaries
thereof. The remaining 2,300,000 incentive stock options were granted
to employees. 1,000,000 of the NQOs were granted to each of Peter Bordes
and Herbert Hunt with respect to their service as members of the Board of
Directors of the Registrant during 2005 and 2006 and vested
immediately.  500,000 of the NQOs were granted to Aaron Dobrinsky with
respect to his service as a member of the Board of Directors of the Registrant
during 2006 and vested immediately.  All of these options were issued
at an exercise price of $0.02 per share, representing the closing price of our
common stock on such date. The remaining 1,100,000 non-qualified stock options
were granted to consultants.
  On
December 28, 2006 we issued 3 bridge notes in the principal amounts of $50,000
each to Jill Solomon, Don Winton and Thunderbay Enterprises, and 3 warrants to
purchase 1.3 million shares of common stock to each lender with an exercise
price of $0.03 per share.  On June 10th, 2007 two of the three bridge
notes were paid back in full and one of them converted into the convertible
debentures dated June 11th,
2007.
 
 On May 4,
2007, the Registrant’s Board of Directors authorized and approved the following
compensation package for each of Peter Bordes and Herbert Hunt for their
services as  independent directors of the Registrant for 2007: (i) the
payment of the sum of $20,000 on December 31, 2007 so long as  they
are serving as an independent director of the Registrant on such date, and (ii)
the grant of Non-Qualified Stock Options under the Registrant’s Long Term
Incentive Plan for the purchase of up to 500,000 shares of the Registrant’s
Common Stock at an exercise price equal to the May 4, 2007 closing trading price
of the Registrant’s Common Stock, namely $.025 per share, vesting in full on
December 31, 2007 so long as  they are  serving as an
independent director of the Registrant on such date. Such compensation was also
offered to Mr. Woody McGee; however, Mr. McGee resigned from the Board of
Directors prior to December 31, 2007.
 
 On June
11, 2007 and June 13, 2007, we closed a financing with certain investors,
pursuant to which we sold an aggregate of $2,350,000 amount of Convertible
Debentures due May 2012.  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 $0.02 per share, subject to
certain restrictions contained in the Convertible Debentures.  The
interest on the convertible debentures is six percent (6%) payable quarterly
either in cash or, at the Company’s election, in shares of the Company’s Series
B Preferred Stock prior to the Triggering Event or shares of the Company’s
Common Stock thereafter at Two and One-Half Cents ($.025) per share of Common
Stock or a 10% discounted stock price from the average market price for the 20
business days preceding the interest payment date, whichever is
greater.  Each investor was also given the option to purchase
additional convertible debentures; however, such options have
expired.
 
 On June
20, 2007, we issued warrants to four individuals for services
rendered.  The warrants are initially exercisable for shares of Series
B Preferred Stock and ultimately exercisable into shares of common stock once we
have sufficient shares of common stock available for issuance upon
exercise.  The ultimate number of common shares under warrant coverage
is 7,000,000 at $0.03 per share and 2,962,500 at $0.02 per share.  All
of the warrants have a five year term
 
 On August
6, 2007, we issued 7,500,000 shares of our common stock, as compensation for
services rendered to, or the settlement of obligations owed by, the
Company.
 
 On
November 5, 2007, the Registrant’s Board of Directors approved the grant to
employees and consultants, under the Registrant’s Long-Term Incentive Plan, of
an aggregate of 1,450,000 Incentive Stock Options and an aggregate of 800,000
Non-Qualified Stock Options.  Such options were issued at an exercise
price of $0.015 per share and vest one-third (1/3) on each of the first three
anniversaries of the employment date.
  Index
  On
October 1, 2007, the Board approved issuance of 1,699,726 shares of our common
stock, as interest for the third quarter of 2007, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007
 
 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.
  All of the shares of common stock
approved for issuance in connection with interest payments on the debentures as
provided above were issued in the second quarter of 2008.
  On April
14, 2008, we issued 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 Registrant’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.
 
 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 OfficerDate:   7/1/08Pursuant
      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/ Peter A. Bordes,
      Jr.Peter
      A. Bordes, Jr.Chairman
      of the Board of DirectorsDate:   7/1/08By:
              /s/ Michael S.
      WasikMichael
      S. WasikChief
      Executive Officer,Chief
      Financial Officer and DirectorDate:
      7/1/08By:
              /s/ Herbert I. Hunt,
      IIIHerbert
      I. Hunt, IIIDirectorDate:
      7/1/08