UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
(Mark One)

_x_   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the quarterly period ended:              September 30, 2002
                                        ----------------------------------------

                                       OR

___   TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from:                   to
                                      ----------------     ---------------------

      Commission file number:                       000-31037
                               -------------------------------------------------

                         eRoomSystem Technologies, Inc.
--------------------------------------------------------------------------------
                     (Exact name of small business issuer as
                            specified in its charter)


                      Nevada                             87-0540713
-----------------------------------------    -----------------------------------
           (State or other jurisdiction               (I.R.S. Employer
         of incorporation or organization)           Identification No.)

                   106 East 13200 South, Draper, UT 84020-8954
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (800) 316-3070
--------------------------------------------------------------------------------
                           (Issuer's telephone number)

                    390 North 3050 East, St. George, UT 84790
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 x  NO
                                                                      ---   ---

Applicable Only to Issuers Involved in Bankruptcy Proceedings During the
Preceding Five Years

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court.  YES      NO
                                                 ---    ---

Applicable Only to Corporate Issuers

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

   10,754,158 shares of common stock, $0.001 par value, as of November 1, 2002
--------------------------------------------------------------------------------

Transitional Small Business Disclosure Format (check one):  YES      NO x
                                                                ---    ---

<PAGE>

<TABLE>
<CAPTION>

                         eROOMSYSTEM TECHNOLOGIES, INC.

                                   FORM 10-QSB

                                TABLE OF CONTENTS

                                                                                                                PAGE

PART I - FINANCIAL INFORMATION....................................................................................1
<S>           <C>                                                                                                <C>
         ITEM 1.  FINANCIAL STATEMENTS............................................................................1
                  Condensed Consolidated Balance Sheets (Unaudited)...............................................1
                  Condensed Consolidated Statements of Operations (Unaudited).....................................3
                  Condensed Consolidated Statements of Cash Flows (Unaudited).....................................4
                  Notes to Condensed Consolidated Financial Statements (Unaudited)................................5
         ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...........11
         ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....................................21
         ITEM 4.  EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES...............................................22

PART II - OTHER INFORMATION......................................................................................22
         ITEM 1.  LEGAL PROCEEDINGS..............................................................................22
         ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS......................................................22
         ITEM 3.  DEFAULTS UPON SENIOR SECURITIES................................................................22
         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................................23
         ITEM 5.  OTHER INFORMATION..............................................................................23
         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K...............................................................23
</TABLE>

                                      - i -

<PAGE>


<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                eROOMSYSTEM TECHNOLOGIES, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

                                     ASSETS

                                                                         September 30,   December 31,
                                                                              2002           2001
                                                                        --------------  -------------
CURRENT ASSETS
<S>                                                                          <C>          <C>
 Cash                                                                        $185,584     $1,031,232
 Accounts receivable, net of allowance for doubtful accounts of $23,638
  at September 30, 2002 and $23,638 at December 31, 2001                      235,907        424,343
 Inventories                                                                1,240,852      1,221,995
 Prepaid expenses                                                             291,735        274,477
                                                                        --------------  -------------
       Total Current Assets                                                 1,954,078      2,952,047
                                                                        --------------  -------------

REFRESHMENT CENTERS IN SERVICE, net of accumulated depreciation of
 $686,840 at September 30, 2002 and $396,258 at December 31, 2001           2,612,933      2,489,016
                                                                        --------------  -------------

PROPERTY AND EQUIPMENT
 Production equipment                                                         349,351        276,844
 Computer equipment                                                           246,408        237,966
 Vehicles and other                                                            74,194         78,586
                                                                        --------------  -------------
                                                                              669,953        593,396
 Less accumulated depreciation and amortization                              (488,285)      (412,447)
                                                                        --------------  -------------
       Net Property and Equipment                                             181,668        180,949
                                                                        --------------  -------------

INVESTMENT IN WHOLLY OWNED, UNCONSOLIDATED SUBSIDIARY                         520,791        619,091
                                                                        --------------  -------------

OTHER ASSETS
 Patents and license rights, net of accumulated amortization of
  $408,331 and $357,707, respectively                                          64,159        114,783
 Deposits                                                                      73,688         67,405
                                                                        --------------  -------------
       Total Other Assets                                                     137,847        182,188
                                                                        --------------  -------------

Total Assets                                                               $5,407,317     $6,423,291
                                                                        ==============  =============

See accompanying notes to condensed consolidated financial statements (unaudited).
</TABLE>

                                       1
<PAGE>

<TABLE>
<CAPTION>

                eROOMSYSTEM TECHNOLOGIES, INC. AND SUBSIDIARIES
         CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) (UNAUDITED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY


                                                                        September 30,   December 31,
                                                                             2002           2001
                                                                        --------------  -------------
CURRENT ASSETS
<S>                                                                          <C>            <C>
 Notes payable and current portion of long-term debt                         $188,648       $153,006
 Current portion of capital lease obligations                                   7,261         12,875
 Accounts payable                                                             753,372        705,370
 Accrued liabilities                                                          186,196        506,939
 Accrued interest                                                              22,264         21,941
 Customer deposits                                                             29,258        292,481
 Deferred maintenance revenue                                                  89,783         58,467
                                                                        --------------  -------------
       Total Current Liabilities                                            1,276,782      1,751,079
                                                                        --------------  -------------

LONG-TERM LIABILITIES
 Long-term debt, net of current portion                                     1,363,091      1,356,415
 Capital lease obligations, net of current portion                                 --          6,075
                                                                        --------------  -------------
       Total Long-Term Liabilities                                          1,363,091      1,362,490
                                                                        --------------  -------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
 Series D convertible preferred stock, $0.001 par value; 2,777,778
  shares
authorized; no shares outstanding                                                  --             --
 Undesignated preferred stock, $0.001 par value; 2,222,222 shares
  authorized; no shares outstanding                                                --             --
 Common stock, $0.001 par value; 50,000,000 shares authorized;
  10,754,158 shares and 8,016,019 shares outstanding at September 30,
  2002 and December 31, 2001, respectively                                     10,754          8,016
 Additional paid-in capital                                                31,331,002     29,098,351
 Warrants and options outstanding                                           1,032,475      1,885,102
 Notes receivable from shareholders                                          (229,265)      (247,000)
 Accumulated deficit                                                      (29,377,522)   (27,434,747)
                                                                        --------------  -------------
       Total Stockholders' Equity                                           2,767,444      3,309,722
                                                                        --------------  -------------

                                                                        --------------  -------------
Total Liabilities and Stockholders' Equity                                 $5,407,317     $6,423,291
                                                                        ==============  =============

See accompanying notes to condensed consolidated financial statements (unaudited).
</TABLE>

                                       2
<PAGE>

<TABLE>
<CAPTION>

                eROOMSYSTEM TECHNOLOGIES, INC. AND SUBSIDIARIES
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

                                                                  For the Three                      For the Nine
                                                                   Months Ended                      Months Ended
                                                                  September 30,                      September 30,
                                                              2002             2001             2002             2001
REVENUE
<S>                                                     <C>                  <C>           <C>              <C>
     Product sales                                      $        38,468      $   100,311   $       896,160  $       992,227
     Revenue-sharing arrangements                               195,830          178,129           577,667          456,224
     Maintenance fees                                           119,211          137,357           238,459          281,763
         Total Revenue                                          353,509          415,797         1,712,286        1,730,214

COST OF REVENUE
     Product sales                                              192,097           41,462           838,349          597,613
     Revenue-sharing arrangements                               100,845           84,827           290,582          213,537
     Maintenance                                                185,668           87,241           387,440          284,977
         Total Cost of Revenue                                  478,610          213,530         1,516,371        1,096,127

Gross Margin                                                   (125,101)         202,267           195,915          634,087

OPERATING EXPENSES
     Selling, general and administrative (exclusive of
       noncash compensation expense)                            596,650          630,621         1,634,945        2,348,112
     Research and development                                    71,992          131,212           202,945          350,257
     Non-cash compensation                                      (53,440)              --             3,579           52,602
         Total Operating Expenses                               615,202          761,833         1,841,469        2,750,971

Loss From Operations                                           (740,303)        (559,566)       (1,645,554)      (2,116,884)

OTHER INCOME (EXPENSE)
     Interest expense                                           (67,069)         (29,850)         (181,592)         (42,653)
     Loss on disposal of refreshment centers                         --               --           (90,156)              --
     Equity in loss from unconsolidated, wholly-owned
       subsidiary                                               (52,658)         (48,865)          (98,300)        (133,703)
     Interest and other income                                   60,149            3,484            72,827           87,339
         Other Expense, Net                                     (59,578)         (75,231)         (297,221)         (89,017)

Net Loss                                                $      (799,881)     $  (634,797)  $    (1,942,775)  $   (2,205,901)

Basic and Diluted Loss Per Common Share                 $         (0.08)     $     (0.09)  $         (0.20)  $        (0.31)
Basic and Diluted Weighted-Average Common
  Shares Outstanding                                         10,554,158        7,066,019         9,848,000        7,062,118

See accompanying notes to condensed consolidated financial statements (unaudited).
</TABLE>

                                       3

<PAGE>

<TABLE>
<CAPTION>


                 eROOMSYSTEM TECHNOLOGIES, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                                                             For the Nine Months Ended
                                                                                                     September 30,
                                                                                                2002             2001
                                                                                        ----------------  ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                     <C>               <C>
     Net loss.........................................................................  $     (1,942,775) $    (2,205,901)
     Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization..................................................           417,044          332,002
       Interest accrued on notes receivable from shareholders.........................            (8,265)              --
       Loss on disposal of assets.....................................................            90,156               --
       Shares and options issued for lawsuit settlement...............................                --           15,900
       Amortization of loan costs.....................................................             2,262           16,121
       Non-cash compensation expense..................................................             3,578           52,602
       Distributions in excess of equity in loss from unconsolidated subsidiary.......            98,300          242,981
       Changes in operating assets and liabilities, net of transfers to
         unconsolidated subsidiary:
         Accounts receivable..........................................................           188,437          570,915
         Inventories..................................................................           (18,857)        (325,894)
         Prepaid expenses.............................................................           (17,258)        (104,360)
         Accounts payable.............................................................           114,430         (106,196)
         Accrued liabilities..........................................................          (320,420)        (306,082)
         Customer deposits and deferred maintenance revenue...........................          (231,907)         (90,435)
                                                                                        ----------------  ----------------
              Net Cash Used In Operating Activities...................................        (1,625,275)      (1,908,347)
                                                                                        ----------------  ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Additions to refreshment centers in service......................................          (504,654)      (1,234,230)
     Purchase of property and equipment...............................................           (76,557)         (42,090)
                                                                                        ----------------- ---------------
              Net Cash Used In Investing Activities...................................          (581,211)      (1,276,320)
                                                                                        ----------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from issuance of common stock...........................................         1,297,605               --
     Proceeds from exercise of warrants...............................................            15,150               --
     Proceeds from collection of notes receivable from shareholders...................            26,000               --
     Proceeds from borrowings.........................................................           140,489          609,490
     Principal payments on notes payable..............................................          (106,716)         (68,650)
     Principal payments on capital lease obligations..................................           (11,689)         (48,770)
                                                                                        ----------------  ---------------
              Net Cash Provided by Financing Activities...............................         1,360,839          492,070
                                                                                        ----------------  ---------------
Net Decrease in Cash..................................................................          (845,647)      (2,692,597)
Cash at Beginning of Period...........................................................         1,031,232        2,811,023
                                                                                        ----------------  ---------------
Cash at End of Period.................................................................  $        185,585  $       118,426
                                                                                        ================  ===============
Supplemental Cash Flows Information
     Cash paid for interest.............................................................$        179,007  $        46,187
                                                                                        ================  ===============
Supplemental Disclosure of Noncash Investing and Financing Activities
     Conversion of accounts payable into common stock...................................$         66,429  $           --
     Property and equipment acquired by capital lease...................................              --           16,998
     Refreshment centers under revenue sharing agreements transferred to inventory......              --          213,006

See accompanying notes to condensed consolidated financial statements (unaudited).

</TABLE>

                                       4

<PAGE>


                 eROOMSYSTEM TECHNOLOGIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Condensed Financial Statements - The accompanying unaudited condensed
consolidated financial statements include the accounts of eRoomSystem
Technologies, Inc. and its subsidiaries (the "Company"). These financial
statements are condensed and, therefore, do not include all disclosures normally
required by generally accepted accounting principles. These statements should be
read in conjunction with the Company's annual financial statements included in
the Company's December 31, 2001 Annual Report on Form 10-KSB. In particular, the
Company's organization and nature of operations were presented in Note 1 and its
significant accounting principles were presented as Note 2 to the consolidated
financial statements in that report. In the opinion of management, all
adjustments necessary for a fair presentation have been included in the
accompanying condensed consolidated financial statements and consist of only
normal recurring adjustments. The results of operations presented in the
accompanying condensed consolidated financial statements for the nine months
ended September 30, 2002 are not necessarily indicative of the results that may
be expected for the full year ending December 31, 2002.

Net Loss per Common Share - Basic loss per common share is computed by dividing
net loss attributable to common stockholders by the weighted-average number of
common shares outstanding. Unvested common shares are considered to be stock
options for purposes of computing loss per share and are not included in the
weighted-average number of common shares outstanding. Diluted loss per common
share is computed by dividing net loss attributable to common stockholders by
the weighted-average number of common shares and dilutive potential common share
equivalents outstanding. Potential common share equivalents consist of shares
issuable upon the exercise of stock options and warrants. As of September 30,
2002, there were options and warrants outstanding to purchase 3,139,175 common
shares and 200,000 unvested common shares that were not included in the
computation of diluted loss per common share as their effect would have been
anti-dilutive, thereby decreasing the loss per common share.

NOTE 2 - BUSINESS CONDITION

Since inception, the Company has suffered recurring losses. During the year
ended December 31, 2001 and the nine months ended September 30, 2002, the
Company had losses of $2,444,411 and $1,942,775, respectively. During the year
ended December 31, 2001 and the nine months ended September 30, 2002, the
Company's operations used $1,725,729 and $1,625,275 of cash, respectively. These
matters raise substantial doubt about the Company's ability to continue as a
going concern. Management is attempting to obtain debt and equity financing for
use in its operations. Management's plans include modifying the costs of the
Company's products by using an outside manufacturer, reducing the sales price of
products to increase sales volume and completing a private placement offering of
up to $2,500,000 from the issuance of a convertible promissory note and shares
of Series D Preferred Stock. Realization of profitable operations or proceeds
from the financing is not assured. The accompanying financial statements do not
include any adjustments relating to the recoverability and classification of
asset carrying amounts or the amount and classification of liabilities that
might result should the Company be unable to continue as a going concern.

NOTE 3 - INVESTMENT IN RSi BRE, INC.

RSi BRE, Inc. ("RSi BRE") is a wholly-owned, bankrupt-remote subsidiary of the
Company that holds and operates 2,050 refreshment center units and has an
obligation to RSG Investments LLC ("RSG") as a result of a troubled debt
restructuring under the terms of an Equipment Transfer Agreement with RSG. The
refreshment center units are subject to seven-year revenue sharing agreements
held by RSi BRE. Under the terms of the Equipment Transfer Agreement, RSG
receives $0.57 per unit per day of the revenue from the revenue sharing
agreements, if earned, which is applied to the obligation to RSG. The obligation
to RSG is being amortized over the remaining life of the revenue sharing
agreements using an estimated effective interest rate of approximately 41%. This
rate could fluctuate in the future depending upon the level and timing of
revenues generated from the refreshment center units.

                                       5
<PAGE>

The board of directors of RSi BRE is comprised of one appointee from the
Company, one appointee from RSG and one independent appointee. All operating
decisions, including disbursements, of RSi BRE require unanimous consent of RSi
BRE's board of directors. As a result, the Company does not control RSi BRE. In
accordance with EITF 96-16, "Investor's Accounting for an Investee When the
Investor has a Majority of the Voting Interest But the Minority Shareholder or
Shareholders Have Certain Approval or Veto Rights," the Company has determined
that RSi BRE does not qualify for consolidation in the Company's financial
statements. Rather, the Company's investment in RSi BRE is reflected as an
"Investment in Wholly Owned, Unconsolidated Subsidiary" in the accompanying
consolidated balance sheet and is being accounted for under the equity method of
accounting. At September 30, 2002 and December 31, 2001, the assets and
liabilities of RSi BRE consisted of the following:
<TABLE>
<CAPTION>

                                                                               September 30,          December 31,
                                                                                   2002                   2001
                                                                           -------------------    ------------------
<S>                                                                         <C>                    <C>
       Cash.........................................................        $      49,420          $      39,742
       Accounts receivable, net of allowance for doubtful accounts..              142,688                 72,276
       Inventory....................................................              141,826                     --
       Refreshment centers in service...............................            1,827,763              2,090,118
       Accumulated depreciation.....................................             (853,450)              (770,914)
       Accrued liabilities..........................................              (33,606)               (16,803)
       Obligation payable to RSG....................................             (753,850)              (795,328)
                                                                           -------------------    ------------------

       Net Assets...................................................        $     520,791          $     619,091
                                                                           ===================    ==================
</TABLE>

For the nine months ended September 30, 2002 and 2001, the revenues and expenses
of RSi BRE consisted of the following:

<TABLE>
<CAPTION>
                                                                               Nine Months Ended September 30,
                                                                           -----------------------------------------
                                                                                 2002                   2001
                                                                           ------------------     ------------------
<S>                                                                         <C>                    <C>
       Revenue-sharing agreement revenues...........................        $     318,068          $     314,690
       Late fee revenue.............................................               39,464                  7,107
       Depreciation.................................................             (203,064)              (208,803)
       Other operating expenses.....................................              (76,524)               (83,459)
       Interest expense.............................................             (176,906)              (166,364)
       Interest income..............................................                  662                  3,126
                                                                           ------------------     ------------------

       Net Loss.....................................................        $     (98,300)         $    (133,703)
                                                                           ==================     ==================
</TABLE>


The Financial Accounting Standards Board has issued the exposure draft,
Consolidation of Certain Special-Purpose Entities, an interpretation of ARB No.
51. Though the exposure draft is currently in the comment period, as the
exposure draft stands, consolidation of RSi BRE will not be required because the
Company is not the primary beneficiary of the special-purpose entity. However,
due to the uncertainty of these potential changes in accounting standards and
other current issues in the reporting environment, the Company has presented the
following pro forma financial information as though the investment in RSi BRE
had been accounted for on a consolidated basis as of September 30, 2002:

<TABLE>
<CAPTION>
<S>                                                                                            <C>
       Current Assets..................................................................        $    2,288,011
       Long-Term Assets................................................................             3,906,761
       Current Liabilities.............................................................            (2,064,238)
       Long-Term Liabilities...........................................................            (1,363,091)
</TABLE>

                                       6
<PAGE>


NOTE 4 - FINANCING AGREEMENT

During the nine months ended September 30, 2002, the Company, the Company
received $150,000 in debt financing under the terms of a financing agreement
with AMERESCO Leasing Corporation, a finance company relating to refreshment
centers placed by the Company with a hotel customer under a qualified
revenue-sharing agreement. The related note payable accrues interest at the
seven-year treasury rate plus 12.5%, or 17.19% per annum at September 30, 2002,
and is collateralized by refreshment centers with a value of $467,871. Notes
payable to AMERESCO Leasing Corporation totaled $1,551,739 at September 30,
2002, of which $188,648 is the current portion.

On September 18, 2002, management was notified by AMRESCO Leasing Corporation of
its intention to cease funding loans to the Company. There is no assurance that
management will be successful in obtaining a new source of financing, and if
successful that the terms of such new financing will be favorable to the
Company. If a new financing relationship is not procured, the financial
condition and results of operation of the Company will likely be adversely
affected.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

On March 28, 2001, the Company received a letter from the Company's former
chairman and chief executive officer in which he claimed he was due certain
severance and other payments in the aggregate amount of approximately $1,700,000
pursuant to the terms of his terminated employment agreement. The matter was
submitted to binding arbitration per the terms of the terminated employment
agreement. In September 2002, the arbitration was settled in favor of the
Company. Punitive damages, less arbitration costs, in the amount of $47,422 were
awarded to the Company and no claims were required to be paid to the Company's
former chairman and chief executive officer because he was deemed to be in
breach of his terminated employment agreement. The Company had not received the
settlement award as of September 30, 2002. The Company recorded a valuation
allowance of $47,422, effectively reducing the carrying value of the receivable
for the settlement award to zero as of September 30, 2002.

In November 2002, a former landlord in St. George, Utah filed a lawsuit against
the Company that alleges breach of a lease agreement and seeks payment in the
amount of $10,616 for delinquent rent, $7,544 for damages and approximately
$9,800 for occupancy beyond the term of the lease. The landlord is also seeking
interest on these amounts and attorney's fees related to the action. Management
intends to attempt to settle the claim. This claim is not expected to have a
material impact on the Company's financial position or the results of
operations.

NOTE 6 - STOCKHOLDERS' EQUITY

In February 2002, the Company issued 2,723,139 shares of common stock in a
private placement offering for $1,416,029 of gross proceeds, or $0.52 per share,
which includes a $66,429 conversion of an account payable into common stock,
before offering costs and commissions of $51,995. The net proceeds from the
private placement, after offering costs and commissions totaled $1,364,034.

                                       7
<PAGE>

                 eROOMSYSTEM TECHNOLOGIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Under the terms of the offering, the Company is obligated to include the common
shares issued in any registration filed by the Company within one year of the
date the common shares were issued. After one year the related stockholders have
the right, at the Company's expense, to demand that the common shares be
registered with the Securities and Exchange Commission.

On December 31, 2001, officers (and a related entity owned by a director to whom
an officer assigned 300,000 options), directors and a non-employee consultant
exercised options to purchase 950,000 shares of common stock (including 636,578
variable options) at $0.26 per share under the terms of options granted on
December 31, 2001, by payment of $26,000 in February 2002 and by issuing
$221,000 of 5% full-recourse promissory notes to the Company. Principal and
accrued interest on the promissory notes are due on December 31, 2005. In
addition to the shares purchased with the notes, the notes are secured by
637,500 shares of common stock that were held by the officers or the related
entity for more than six months at the date of exercise and by other assets.

The options exercised on December 31, 2001 included the early exercise of
400,000 unvested options. The common shares issued upon the early exercise are
subject to contingent repurchase call options held by the Company that will
lapse at the time, and to the extent, the options vest. The options vest through
December 31, 2002. The Company may exercise the repurchase call option on the
unvested portion of the common shares if the related officer terminates
employment with the Company prior to the date the related options vest. Each
call option is exercisable at the lesser of the fair value of the common stock
on the date exercised or $0.26 per share. The unvested common shares issued upon
the early exercise of the options have been included in common stock outstanding
from December 31, 2001. During the nine months ended September 30, 2002, 200,000
of these options vested.

During July 2002, the stockholders of the Company approved an amendment to the
2000 Stock Option and Incentive Plan, or the 2000 Plan, to increase the
authorized number of shares of common stock, reserved for issuance upon the
exercise of options issued under the 2000 Plan from 2,400,000 shares to
2,700,000 shares.

NOTE 7 - STOCK OPTIONS AND WARRANTS

Tender Offer and Variable Options

On January 7, 2002, the Company offered to exchange all options held by current
employees, directors, independent sales representatives and key consultants to
purchase shares of the Company's common stock with an exercise price of $1.50 or
more per share for new options to be granted under the Company's 2000 Stock
Option Plan. Under the terms of the tender offer, the Company agreed to grant
new options on or promptly after the first trading day that was at least six
months and one day after the date the tendered options were accepted for
exchange and cancelled. As a result of the tender offer, options to purchase
1,367,855 shares of common stock exercisable from $1.51 to $9.60 per share were
cancelled in January 2002. The Company granted new options under the tender
offer on July 23, 2002 for the purchase of 1,367,855 shares of common stock
exercisable at $0.37 per share, the market price of the Company's common stock
on the date granted. Each new option granted preserved the vesting schedule and
the vesting commencement date of the option it replaced. The new options will
expire in ten years if not exercised.

                                       8
<PAGE>

                 eROOMSYSTEM TECHNOLOGIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

In accordance with SFAS Interpretation No. 44, the Company indirectly reduced
the exercise price of 100,125 stock options by canceling options in January 2002
in connection with the tender offer and by granting options to the same persons
at lower exercise prices on December 31, 2001. As a result, the options granted
in December 2001 are being accounted for as variable options until they are
exercised, forfeited or expire. During the nine months ended September 30, 2002,
the Company recognized compensation expense relating to the variable options of
$3,579.

Stock Options and Warrants

During the nine months ended September 30, 2002, the Company granted options to
purchase 1,534,748 shares of common stock to employees, directors and
independent sales representatives. These options vested immediately through
December 31, 2002, have exercise prices ranging from $0.37 to $1.55 per share
and expire between April 2012 and July 2012.

During the nine months ended September 30, 2002, options to purchase 15,000
shares of common stock at $1.01 per share were exercised. Also during the nine
months ended September 30, 2002 options and warrants to purchase 362,803 shares
of common stock with exercise prices ranging from $0.26 to $16.00, expired.

At September 30, 2002, the Company had 3,139,175 options and warrants
outstanding at an average exercise price of $2.21 per share. Options and
warrants exercisable at September 30, 2002 totaled 3,059,180 and had an average
exercise price of $2.25 per share.

NOTE 8 - SUBSEQUENT EVENTS

Series D Convertible Preferred Stock - On November 1, 2002, the board of
directors of the Company approved an amendment to the articles of incorporation
and on November 13, 2002, the articles of incorporation were amended designating
2,777,778 authorized shares of preferred stock as Series D Convertible Preferred
Stock. When issued, the Series D Preferred Stock will pay 6% annual,
non-cumulative dividends, will have a liquidation preference over common stock
equal to the original purchase price plus any declared but unpaid dividends,
automatic will be converted into common stock by consent of a majority of Series
D Preferred stockholders and will have voting rights equal to the number of
shares of common stock issuable upon conversion.

The Series D Preferred Stock contains a protective provision to require consent
of majority of Series D Preferred stockholders for any action that (i) alters or
changes the rights, preferences or privileges of the Series D Preferred, (ii)
increases or decreases the authorized number of shares of Series D Preferred,
(iii) issues or creates (by reclassification or otherwise) any new class or
series of shares having rights, preferences, powers or privileges on par or
senior to the existing Series D Preferred, (iv) results in the redemption of any
shares of Series D Preferred or Common Stock, or (v) amends the Company's
articles of incorporation in any way that adversely affects the rights of the
Series D Preferred Stock.

On November 8, 2002, the Company entered into a Stock Purchase Agreement with a
shareholder for the issuance of up to 2,777,778 shares of Series D Convertible
Preferred Stock in a private placement offering for gross proceeds of up to
$2,500,000 at $0.90 per share of Series D Convertible Preferred Stock, including
proceeds from issuance of the convertible promissory note described below. The
Series D Convertible Preferred Stock will be convertible into common stock on a
1-for-6 basis. As a condition to closing the Series D Preferred Stock financing,
the Company must achieve the following: (a) obtain a new funding line to finance
the placement of its products on a revenue sharing basis; (b) comply with
Nasdaq's minimum bid requirement of $1 per share, for ten consecutive trading
days by January 15, 2003; and (c) obtain consent from Nasdaq, or a majority of
the Company's shareholders, to issue the Series D Preferred Stock on the terms
described above. There is no assurance that any proceeds will be received under
the private placement offering of the Series D Convertible Preferred Stock.

                                       9
<PAGE>

                 eROOMSYSTEM TECHNOLOGIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Convertible Promissory Note - On November 8, 2002, the Company entered into a
credit facility under the terms of a private placement offering with a
shareholder whereby the Company can borrow up to $322,500 under the terms of an
8% secured, convertible promissory note. The note holder is obligated to loan
the Company a minimum of $250,000 under the credit facility. Through November
11, 2002, the Company has not received any proceeds. From the date proceeds are
received, principal and accrued interest under the note will be convertible into
Series D Preferred Stock at $0.90 per share. Each share of Series D Preferred
Stock, if issued, will be convertible into six shares of common stock, or at
$0.15 per common share.

Principal and accrued interest under the promissory note will be due November 8,
2003 or earlier if in default. The note is secured by all the assets of the
Company excluding those assets that have been pledged to a finance company, and
is secured by a pledge of all issued and outstanding common stock of eRoomSystem
SPE, Inc. Up to 10% of the proceeds of the interim financing may be used to pay
existing Company indebtedness, including trade creditors, unless otherwise
approved in writing by the holder of the promissory note. The proceeds will be
placed in a third party trust account to fund the Company's ongoing operational
expenses, but such account will not be under the Company's control and therefore
will not be subject to execution by the Company's creditors.

In accordance with EITF 00-27, "Application of Issue No. 98-5 to Certain
Convertible Instruments," the Company has determined that the holder of the
convertible promissory note will receive a beneficial conversion option at each
date the promissory note is funded. This beneficial conversion option will be
valued at an amount equal to the proceeds received, will be allocated to
additional paid-in capital and will result in a discount to the promissory note.
The discount will be amortized as interest expense through November 8, 2003,
unless the promissory note is converted earlier into Series D Preferred Stock,
at which time the remaining unamortized discount will be recognized as interest
expense.

                                       10
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
           OF OPERATIONS.

         The following discussion should be read in conjunction with our
financial statements and notes to our financial statements, included elsewhere
in this report. This discussion contains forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of various factors
discussed elsewhere in this report.

         Certain information included herein contains statements that may be
considered forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, or the Securities Act, and Section 21E of
the Securities Exchange Act of 1934, as amended, or the Exchange Act, such as
statements relating to our anticipated revenues, gross margin and operating
results, future performance and operations, plans for future expansion, capital
spending, sources of liquidity and financing sources. Such forward-looking
information involves important risks and uncertainties that could significantly
affect anticipated results in the future, and accordingly, such results may
differ from those expressed in any forward-looking statements made herein. These
risks and uncertainties include, but are not limited to, those relating to our
liquidity requirements, the continued growth of the lodging industry, the
success of our product-development, marketing and sales activities, vigorous
competition in the lodging industry, dependence on existing management, leverage
and debt service (including sensitivity to fluctuations in interest rates),
domestic or global economic conditions, the inherent uncertainty and costs of
prolonged arbitration or litigation, and changes in federal or state tax laws or
the administration of such laws. A complete discussion of these risks and
uncertainties are contained in our Annual Report on Form 10-KSB, as filed with
the Securities and Exchange Commission on April 1, 2002.

OVERVIEW

         eRoomSystem Technologies, Inc. is a Nevada corporation incorporated on
August 31, 1999. We have developed and introduced to the lodging industry an
intelligent, in-room computerized platform and communications network, or the
eRoomSystem. The eRoomSystem is a computerized platform and processor-based
system that is installed within our eRoomServ refreshment centers and designed
to collect and control data. The eRoomSystem also supports our eRoomSafe, an
electronic in-room safe. As part of our expanding line of products, we
previously announced the introduction of the eRoomTray, an in-room ambient tray
that can sell a wide variety of products at room temperature, and eRoomEnergy,
an in-room digital thermostat that is designed to control virtually any fan coil
unit or packaged-terminal air conditioner found in hotel rooms. We also intend
to develop other applications and extensions to the eRoomSystem, including
information management services and direct credit card billing and remote
engineering and maintenance services.

ACCOUNTING POLICIES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires our management to make estimates and
assumptions that affect reported amounts and disclosures, some of which may
require revision in future periods. The most sensitive estimates affecting our
financial statements include future volatility used in valuing equity
instruments, allowance for bad debts, depreciable lives of refreshment centers
in service and of property and equipment, amortization life of patents and
deferred maintenance revenue and accrued liabilities. By their nature, these
judgments are subject to an inherent degree of uncertainty. Our judgments are
based on our historical experience, terms of existing contracts, our observance
of industry trends, information provided by or gathered from our customers and
information available from other outside sources, as appropriate. There can be
no assurance that actual results will not differ from our estimates. The
following is a summary of what management believes are the critical accounting
policies related to our operations. The application of these policies, in some
cases, requires our management to make subjective judgments regarding the effect
of matters that are inherently uncertain.

                                       11
<PAGE>

         Description of Revenues

         Historically, we have received substantially all of our revenues from
the sale, or placement under a revenue-sharing program, of our products in
hotels. We expect that these revenues will account for a substantial majority of
our revenues for the foreseeable future. We also generate limited revenues from
maintenance and support services.

         Our dependence on the lodging industry makes us vulnerable to downturns
in the lodging industry caused by the general economic environment. Such a
downturn could result in some hotels delaying or declining to purchase or place
our products or failing to renew our maintenance agreements, or it could result
in fewer purchases by hotel guests of goods and services from our products
installed in hotels. Time spent by individuals on travel and leisure is
typically discretionary for consumers and may be particularly affected by
adverse trends in the general economy. The success of our operations depends, in
part, upon discretionary consumer spending and economic conditions affecting
disposable consumer income such as employment, wages and salaries, business
conditions, interest rates, availability of credit and taxation.

         Through our revenue-sharing program, we install our products at little
or no upfront cost to our customers and share in the recurring revenues
generated from sales of goods and services related to our products. We retain
the ownership of the eRoomServ refreshment centers, eRoomSafes and eRoomTrays
throughout the term of the revenue-sharing agreements and the right to re-deploy
any systems returned to us upon the expiration or earlier termination of the
revenue-sharing agreements. We believe that our revenue-sharing program will
increase future placements of our products; however, we cannot assure you that
we will be successful in this effort.

         We have experienced substantial fluctuations in revenues from
period-to-period as a result of limited working capital to fund the development
and assembly of our products and to maintain sufficient component inventories.
In addition to limited working capital, fluctuations in revenues have partially
resulted from the transition to our revenue-sharing program under which revenues
are recognized over the seven-year life of the contract instead of immediately
upon installation of the product. We anticipate that over the next several years
the majority of our revenues will result from the placement of our products
pursuant to our revenue-sharing program, followed by sales and, to a lesser
extent, from maintenance agreements. We project that we will receive
approximately 60% of the recurring revenues from the sale of goods and services
generated by our eRoomServ refreshment centers, eRoomSafes and eRoomTray
solutions placed under revenue-sharing agreements. Our customers receive the
remainder of the recurring revenues.

         AMRESCO Leasing Corporation, which previously provided more than
$1,600,000 in financing relating to our products placed pursuant to revenue
sharing contracts, notified us in writing on September 18, 2002 of its intention
to cease funding loans to us. As a result, we have commenced discussions with
several financing groups to establish a new financing source for our revenue
sharing placements. While we believe a new financing relationship can be
established in the next few months, there can be no assurance that we will be
successful in doing so, and if successful that the terms of such new financing
will be favorable to us. If a new financing relationship is not procured, our
financial condition and results of operation will likely be adversely affected.

                                       12
<PAGE>

         Revenue Recognition

         Sales revenue from our products is recognized upon completion of
installation and acceptance by the customer. Sales revenue from the placement of
our eRoomServ refreshment centers, eRoomSafes and eRoomTrays under our
revenue-sharing program are accounted for similar to an operating lease, with
the revenues recognized as earned over the term of the agreement. In some
instances, our revenue-sharing agreements provide for a guaranteed minimum daily
payment by the hotel. We negotiate our portion of the revenues generated under
our revenue-sharing program based upon the cost of the equipment installed and
the estimated daily sales per unit for the specific customer. We seek a gross
profit margin of 35% on the sale and placement through our revenue-sharing
program of eRoomServ refreshment centers, eRoomSafes and eRoomTrays.

         We typically enter into installation, maintenance and license
agreements with our hotel customers. Installation, maintenance and license
revenues are recognized as the services are performed, or pro rata over the
service period. We defer all revenue paid in advance relating to future services
and products not yet installed and accepted by our customers.

         Description of Expenses

         Cost of product sales consists primarily of production, shipping and
installation costs. Cost of revenue-sharing arrangements consists primarily of
depreciation of capitalized costs for the products placed in service. We
capitalize the production, shipping, installation and sales commissions related
to the eRoomServ refreshment centers, eRoomSafes and eRoomTrays placed under
revenue-sharing agreements. Cost of maintenance fee revenues primarily consists
of expenses related to customer support and maintenance and legacy issues
related to installations made before January 2001.

         Selling, general and administrative expenses include selling expenses
consisting primarily of advertising, promotional activities, trade shows, travel
and personnel-related expenses and general and administrative expenses
consisting primarily of professional fees, salaries and related costs for
accounting, administration, finance, human resources, information systems and
legal matters.

         Research and development expenses consist of payroll and related costs
for hardware and software engineers, quality assurance specialists, management
personnel, and the costs of materials used by these employees in the development
of new or enhanced product offerings.

         In accordance with Financial Accounting Standards Board, or FASB,
Statement of Financial Accounting Standards, or SFAS, No. 86, "Accounting for
the Costs of Computer Software to be Sold, Leased or Otherwise Marketed,"
development costs incurred in the research and development of new software
products to be sold, leased or otherwise marketed are expensed as incurred until
technological feasibility in the form of a working model has been established.
Internally generated capitalizable software development costs have not been
material to date. We have charged our software development costs to research and
development expense in our consolidated statements of operations.

RESULTS OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

         Revenues

         Product Sales -- Revenues from product sales were $38,468 for the three
months ended September 30, 2002, compared to $100,311 for the three months ended
September 30, 2001, representing a decrease of $61,843, or 62.0%. The decrease
in revenues from product sales was due to the reduced number of eRoomServ
refreshment centers, eRoomSafes and eRoomTrays sold during the three months
ending September 30, 2002 as compared to the three months ended September 30,
2001.

                                       13
<PAGE>

         Revenue Sharing Arrangements -- Our revenue from revenue sharing
arrangements was $195,830 for the three months ended September 30, 2002,
compared to $178,129 for the three months ended September 30, 2001, representing
an increase of $17,701, or 9.9%. The increase in revenue from revenue sharing
arrangements was due primarily to the increased placement of Refreshment
Centers, eRoomSafes and eRoomTrays pursuant to our revenue sharing program
during the twelve months ended September 30, 2002.Maintenance Fee Revenues --
Our maintenance fee revenues were $119,211 for the three months ended September
30, 2002, compared to $137,357 for the three months ended September 30, 2001,
representing a decrease of $18,146, or 13.2%. The decrease was primarily due to
deferral of a portion of current maintenance fee revenues in anticipation of
future expenses associated with maintenance.

         Cost of Revenue

         Cost of Product Sales Revenue -- Our cost of product sales revenue for
the three months ended September 30, 2002 was $192,097 compared to $41,462 for
the three months ended September 30, 2001, an increase of $150,635, or 363.0%.
The gross margin (loss) percentage on revenue from product sales revenue was
(399.4)% for the three months ended September 30, 2002 compared to 58.7% for the
three months ended September 30, 2001. The increase in our cost of product sales
revenue and the significant decrease on our gross margin percentage on revenue
from product sales revenue was primarily the result of a one-time inventory
write down of $150,000 on overstocked maintenance components, the sale of
components at reduced margins in an effort to stimulate sales, and higher period
cost of manufacturing due to lower production volumes.

         Cost of Revenue Sharing Revenue -- Our cost of revenue sharing revenue
was $100,845 for the three months ended September 30, 2002, compared to $84,827
during the three months ended September 30, 2001, representing an increase of
$16,018, or 18.9%. The increase in the cost of revenue sharing revenue was due
to increased placement of units pursuant to our revenue sharing program. The
gross margin percentage on revenue sharing revenue was 48.5% for the three
months ended September 30, 2002 and 52.4% for the three months ended September
30, 2001. The de minimus decrease in gross margin percentage on revenue sharing
revenue from the three months ended September 30, 2002 to the three months ended
September 30, 2001 reflects the consistency of our gross margin percentage on
revenue sharing revenue.

         Cost of Maintenance Fee Revenue -- Our cost of maintenance fee revenue
was $185,668 for the three months ended September 30, 2002, compared to $87,241
for the three months ended September 30, 2001, representing an increase of
$98,429, or 112.8%. The gross margin (loss) percentage on maintenance fee
revenues was (55.8)% for the three months ended September 30, 2002 and 36.5% for
the three months ended September 30, 2001. The increase in our cost of
maintenance fee revenue and the decrease in gross margin percentages from the
three months ended September 30, 2001 to the three months ended September 30,
2002 was due to the maintenance of non-revenue producing units installed for
test purposes, and the failure of electronic components used in the manufacture
of our product and subsequent replacement of those failed components. In
addition to the component failure, the increase in our cost of maintenance fee
revenues can also be attributed to the deferral of a portion of current
maintenance fee revenues in anticipation of future expenses associated with
maintenance.

                                       14
<PAGE>

         The changes and percent changes with respect to our revenues and our
cost of revenue for the three months ended September 30, 2002 and 2001 are as
follows:
<TABLE>
<CAPTION>

                                                        For the Three Months
                                                        Ended September 30,
                                                 -----------------------------------                          Percent
                                                      2002               2001                 Change           Change
                                                 ---------------    ----------------    ---------------    -------------
Revenue
<S>                                              <C>                <C>                 <C>                     <C>
   Product sales........................         $      38,468      $      100,311      $     (61,843)          (62.0)%
   Revenue-sharing arrangements................        195,830             178,129             17,701             9.9%
   Maintenance fees.....................               119,211             137,357            (18,146)          (13.2)%
                                                 ---------------    ----------------    ---------------    -------------
        Total Revenue...................         $     353,509      $      415,797      $     (62,288)          (15.0)%
                                                 ---------------    ----------------    ---------------

Cost of Revenue
   Product sales........................         $     192,097      $       41,462      $     150,635           363.0%
   Revenue-sharing arrangements................        100,845              84,827             16,018            18.9%
   Maintenance..........................               185,668              87,241             98,427           112.8%
                                                 ---------------    ----------------    ---------------    -------------
        Total Cost of Revenue..................  $     478,610      $      213,530      $     265,080           124.1%
                                                 ---------------    ----------------    ---------------

Gross Margin PERCENTAGE
   Product sales........................             (399.4)%           58.7%
   Revenue-sharing arrangements................        48.5%            52.4%
   Maintenance..........................              (55.8)%           36.5%
        Total Gross Margin Percentage..........       (35.4)%           48.7%
</TABLE>

         Although the preceding table summarizes the net changes and percent
changes with respect to our revenues and our cost of revenue for the three
months ended September 30, 2002 and 2001, the trends contained therein are
limited and should not be viewed as a definitive indication of our future
results.

         Operating Expenses

         Selling, General and Administrative -- Selling, general and
administrative expenses, exclusive of non-cash compensation expense, were
$596,650 for the three months ended September 30, 2002, compared to $630,621 for
the three months ended September 30, 2001, representing a decrease of $33,971,
or 5.4%. The decrease in our selling, general and administrative expenses from
the three months ended September 30, 2002 to the three months ended September
30, 2001 reflects our ongoing efforts to further reduce fixed overhead expenses.

         Research and Development Expenses -- Research and development expenses
were $71,992 for the three months ended September 30, 2002, compared to $131,212
for the three months ended September 30, 2001, representing a decrease of
$59,220, or 45.1%. Research and development expenses represented 20.3% of our
total revenue for the three months ended September 30, 2002 and 31.6% of our
total revenue for the three months ended September 30, 2001. The decrease in
research and development expenses was primarily due to the completion of our new
Version 4 windows-based software platform, the upright-vend design refreshment
center and the eRoomTray.

         Non-Cash Compensation Expense -- Non-cash compensation expense was
$(53,440) for the three months ended September 30, 2002, compared to zero for
the three months ended September 30, 2001, a decrease of $53,440. The decrease
in non-cash compensation expense during the three months ended September 30,
2002 as compared to the three months ended September 30, 2001 was a result of
market fluctuations and subsequent re-valuation pursuant to variable accounting
treatment of options issued to employees.

                                       15
<PAGE>

         Other Expense, Net

         Other expense, net was $59,578 for the three months ended September 30,
2002, compared to $75,231 for the three months ended September 30, 2001,
representing a decrease of $15,653. The net decrease was due primarily to an
increase in interest and other income offset, in part, by an increase in
interest expense related to our borrowings pursuant to our financing arrangement
with AMRESCO.

         Loss Attributable to Common Stockholders

         We incurred losses attributable to common stockholders of $799,881 and
$634,797 during the three months ended September 30, 2002 and 2001,
respectively. The $165,084 increase in the loss attributable to common
stockholders was due primarily to decreased total revenue and increased total
cost of revenue, offset in part by reduced total operating expenses and other
expense, net. We have continued to incur losses subsequent to September 30, 2002
and, as a result, have experienced an increase in accumulated deficit. We
believe that we will continue to incur losses for a period of time.

COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

         Revenues

         Product Sales -- Revenues from product sales were $896,160 for the nine
months ended September 30, 2002, compared $992,227 for the nine months ended
September 30, 2001, representing a decrease of $96,067, or 9.7%. The decrease in
revenues from product sales was due to the reduced number of eRoomServ
refreshment centers, eRoomSafes, and eRoomTrays sold for the nine months ended
September 30, 2002 as compared to the nine months ended September 30, 2001.

         Revenue Sharing Arrangements -- Our revenue from revenue sharing
arrangements was $577,667 for the nine months ended September 30, 2002, compared
to $456,224 for the nine months ended September 30, 2001, representing an
increase of $121,443, or 26.6%. The increase in revenue from revenue sharing
arrangements was due primarily to the increased placement of Refreshment
Centers, eRoomSafes and eRoomTrays pursuant to our revenue sharing program
during the twelve months ended September 30, 2002.

         Maintenance Fee Revenues -- Our maintenance fee revenues were $238,459
for the nine months ended September 30, 2002, compared to $281,763 for the nine
months ended September 30, 2001, representing a decrease of $43,304, or 15.4%.
The decrease was primarily due to the deferral of a portion of current
maintenance fee revenues in anticipation of future expenses associated with
maintenance.

         Cost of Revenue

         Cost of Product Sales Revenue -- Our cost of product sales revenue for
the nine months ended September 30, 2002 was $838,349, compared to $597,613 for
the nine months ended September 30, 2001, an increase of $240,736, or 40.3%. The
increase was due to higher costs associated with product sales during the nine
months ended September 30, 2002, as compared to the nine months ended September
30, 2001. The gross margin percentage on revenue from product sales revenue was
6.5% for the nine months ended September 30, 2002 compared to 39.8% for the nine
months ended September 30, 2001. The decrease in gross margin percentage on
revenue from product sales revenue was primarily the result of a one-time
inventory write down of $150,000 on overstocked maintenance components, the sale
of components at reduced margins in an effort to stimulate sales, and higher
period cost of manufacturing due to lower production volumes.

                                       16
<PAGE>

         Cost of Revenue Sharing Revenue -- Our cost of revenue sharing revenue
was $290,582 for the nine months ended September 30, 2002, compared to $213,537
during the nine months ended September 30, 2001, representing an increase of
$77,045, or 36.1%. The increase in the cost of revenue sharing revenue was due
to increased placement of units pursuant to our revenue sharing program. The
gross margin percentage on revenue sharing revenue was 49.7% for the nine months
ended September 30, 2002 and 53.2% for the nine months ended September 30, 2001.
The minor decrease in gross margin percentage on revenue sharing revenue from
the nine months ended September 30, 2001 to the nine months ended September 30,
2002 resulted from, in part, the increased cost of product mix under our revenue
sharing agreements.

         Cost of Maintenance Fee Revenue -- Our cost of maintenance fee revenue
was $387,440 for the nine months ended September 30, 2002, compared to $284,977
for the nine months ended September 30, 2001, representing an increase of
$102,463, or 36.0%. The gross margin percentage on maintenance fee revenues was
(62.5)% for the nine months ended September 30, 2002 and (1.1)% for the nine
months ended September 30, 2001. The increase in our cost of maintenance fee
revenue and the decrease in gross margin percentages from the nine months ended
September 30, 2001 to the nine months ended September 30, 2002 was primarily due
to the failure of electronic components used in the manufacture of our product
and subsequent replacement of those failed components. In addition to the
component failure, the increase in our cost of maintenance fee revenues can also
be attributed to the deferral of a portion of current maintenance fee revenues
in anticipation of future expenses associated with maintenance.

         The changes and percent changes with respect to our revenues and our
cost of revenue for the six months ended September 30, 2002 and 2001 are as
follows:

<TABLE>
<CAPTION>
                                                        For the Nine Months
                                                        Ended September 30,
                                                 -----------------------------------                          Percent
                                                      2002               2001                 Change          Change
                                                 ---------------    ----------------    ---------------    -------------
Revenue
<S>                                              <C>                <C>                 <C>                     <C>
   Product sales........................         $      896,160     $      992,227      $     (96,067)          (9.7)%
   Revenue-sharing arrangements................         577,667            456,224            121,443           26.6 %
   Maintenance fees.....................                238,459            281,763            (43,304)         (15.4)%
                                                 ---------------    ----------------    ---------------
        Total Revenue...................         $    1,712,286     $    1,730,214      $     (17,928)          (1.0)%
                                                 ---------------    ----------------    ---------------

Cost of Revenue
   Product sales........................         $      838,349     $      597,613      $     240,736           40.3%
   Revenue-sharing arrangements................         290,582            213,537             77,045           36.1%
   Maintenance..........................                387,440            284,977            102,463           36.0%
                                                 ---------------    ----------------    ---------------
        Total Cost of Revenue..................  $    1,516,371     $    1,096,127      $     420,244           38.3%
                                                 ---------------    ----------------    ---------------

Gross Margin PERCENTAGE
   Product sales........................                  6.5%               39.8%
   Revenue-sharing arrangements................          49.7%               53.2%
   Maintenance..........................                (62.5)%              (1.1)%
        Total Gross Margin Percentage..........          11.4%               36.7%
</TABLE>

         Although the preceding table summarizes the net changes and percent
changes with respect to our revenues and our cost of revenue for the nine months
ended September 30, 2002 and 2001, the trends contained therein are limited and
should not be viewed as a definitive indication of our future results.

                                       17
<PAGE>

         Operating Expenses

         Selling, General and Administrative -- Selling, general and
administrative expenses, exclusive of non-cash compensation expense, were
$1,634,945 for the nine months ended September 30, 2002, compared to $2,348,112
for the nine months ended September 30, 2001, representing a decrease of
$713,167, or 30.4%. The decrease in our selling, general and administrative
expenses from the nine months ended September 30, 2001 to the nine months ended
September 30, 2002 reflects our ongoing efforts to reduce overhead.

         Research and Development Expenses -- Research and development expenses
were $202,945 for the nine months ended September 30, 2002, compared to $350,257
for the nine months ended September 30, 2001, representing a decrease of
$147,312, or 42.1%. Research and development expenses represented 11.9% of our
total revenue for the nine months ended September 30, 2002 and 20.2% of our
total revenue for the nine months ended September 30, 2001. The decrease in
research and development expenses was primarily due to the completion of the
research and development for our new windows-based software platform, our
upright vend design refreshment center and the eRoomTray.

         Non-Cash Compensation Expense -- Non-cash compensation expense was
$3,579 for the nine months ended September 30, 2002, compared to $52,602 for the
nine months ended September 30, 2001, representing a decrease of $49,023, or
93.2%. The increase in non-cash compensation expense during the nine months
ended September 30, 2002 as compared to the nine months ended September 30, 2001
resulted from market fluctuations and subsequent re-valuation pursuant to
variable accounting treatment of options issued to employees.

         Other Expense, Net

         Other expense was $297,221 for the nine months ended September 30,
2002, compared to $89,017 for the nine months ended September 30, 2001,
representing an increase of $208,204, or 233.9%. The increase is due primarily
to the increase in interest expense related to our borrowings pursuant to our
financing arrangement with AMRESCO and the write-off of the residual value of
refreshment centers associated with expired contracts.

         Loss Attributable to Common Stockholders

         We incurred losses attributable to common stockholders of $1,942,775
and $2,205,901 during the nine months ended September 30, 2002 and 2001,
respectively. The $263,126, or 11.9%, decrease in the loss attributable to
common stockholders was due primarily to reduced total operating expenses,
offset in part by increased total cost of revenue and other expense net. We have
continued to incur losses subsequent to September 30, 2002 and, as a result,
have experienced an increase in accumulated deficit. We believe that we will
continue to incur losses for a period of time.

LIQUIDITY AND CAPITAL RESOURCES

         During the nine months ended September 30, 2002, our principal capital
resources were $140,489 in funding through our financial arrangement with
AMRESCO and $1,297,605 in net proceeds from our private placement of common
stock in March 2002. In addition, during the fiscal year 2001, we received
$1,427,495 in funding from AMRESCO. The funds from AMRESCO and our private
placement have been used to fund working capital and general corporate purposes.

         At September 30, 2002, our principal sources of liquidity consisted of
$185,584 of cash and $677,296 of working capital compared to $1,031,232 of cash
and $1,200,968 of working capital at December 31, 2001. In addition, our
stockholders' equity was $2,767,444 at September 30, 2002, compared to
stockholders' equity of $3,309,722 at December 31, 2001, a decrease of $542,278.
The decrease in cash, working capital and stockholders' equity reflects the
continued use of cash by our operations and our current inability to generate
sufficient revenue to sustain our operations.

                                       18
<PAGE>

         Our accumulated deficit increased from $27,434,747 at December 31, 2001
to $29,377,522 at September 30, 2002. The increase in accumulated deficit
resulted from the net loss for the nine months ended September 30, 2002. We
anticipate that our accumulated deficit will continue to increase for the
foreseeable future.

         We used net cash of $1,625,725 in operating activities during the nine
months ended September 30, 2002, compared to $1,908,347 of net cash used in
operating activities during the nine months ended September 30, 2001. The
$283,073 decrease in the use of net cash in operating activities primarily
resulted from, in part, the $263,126 decrease in net loss, the $87,102 decrease
in prepaid expenses, and the $307,037 decrease in inventories offset by, in
part, the $144,681 decrease in distributions in excess of equity in loss from
RSi BRE, Inc., the $382,478 decrease in net cash received from accounts
receivable, and the $141,472 increase in customer deposits and deferred
maintenance revenue.

         Investing activities for the nine months ended September 30, 2002 used
net cash of $581,211, compared to $1,276,320 used during the nine months ended
September 30, 2001. The decrease in net cash used in investing activities
resulted from a reduction in additions to refreshment centers in service in the
amount of $729,576.

         Financing activities provided $1,360,839 during the nine months ended
September 30, 2002 compared to net cash of $492,070 provided during the nine
months ended September 30, 2001. The primary sources of cash during the nine
months ended September 30, 2002 was our private placement of common stock for
net proceeds of $1,297,605,proceeds from exercise of warrants, collection of
notes receivable from shareholders and proceeds from borrowings, offset in part
by principal payments on notes payable and principal payments on capital lease
obligations.

         The placement of products under revenue-sharing arrangements is capital
intensive. We estimate that we must place approximately 16,000 units pursuant to
our revenue-sharing program, along with the continued sale and placement of our
products, in order to provide adequate cash to sustain our operations. As of
September 30, 2002, we had 4,167 equivalent units placed pursuant to our
revenue-sharing program. Although we received proceeds from our financing
arrangement with AMRESCO and, in March 2002, from our private placement of
common stock, we will require additional cash to finance our planned expansion
and capital expenditures.

         On September 18, 2002, we were notified by AMRESCO of its intention to
cease funding loans to us. We have been working with several financing groups to
establish a new financing source for our revenue sharing placements. We believe
a new financing relationship can be established in the next few months, however
there can be no assurance that we will be successful in doing so, and if
successful that the terms of such new financing will be favorable to us. If a
new financing relationship is not procured, our financial condition and results
of operation will likely be adversely affected.

         In addition to procuring a new financing line, there is a need for
additional working capital to fund our business operations as well as the 90-day
seasoning period following placement of our products on a revenue sharing basis.
We have explored various debt and equity financing alternatives with several
institutions, investment banks, hedge funds and money managers. On November 8,
2002, we received a commitment for $250,000 of interim debt financing from our
largest stockholder. This debt financing may be increased up to $322,500. The
$250,000 investment is evidenced by a promissory note and security agreement,
interest to accrue at 8% per annum, payable in one year and secured with a first
priority security interest on all of our assets and all assets of eRoomSystem
Services, Inc., excluding those assets that have been pledged to AMRESCO, and a
pledge of all issued and outstanding common stock of eRoomSystem SPE, Inc. If
funded, the promissory note is convertible at the holder's option into Series D
Convertible Preferred Stock at $0.90 per share. Up to ten percent of the
proceeds of the interim financing may be used to pay existing indebtedness,
including trade creditors, unless otherwise approved in writing by the holder of
the promissory note. The interim financing proceeds have been placed in a third
party trust account to fund our ongoing operational expenses, but such account
will not be under our control and therefore will not be subject to execution by
our creditors.

                                       19
<PAGE>

         Our long-term financing strategy includes the proposed issuance of up
to $2,500,000 of Series D Preferred Stock, inclusive of the conversion of the
interim debt financing. The Series D Preferred Stock would be priced at $0.90 a
share, for a total of up to 2,777,778 shares. The Series D Preferred Stock would
be convertible into shares of common stock on a 1 for 6 basis, for a total
issuance of up to 16,666,667 shares of common stock assuming the conversion of
$2,500,000, or 2,777,778 shares, of Series D Preferred Stock. While the Series D
Preferred Stock financing would dilute the percentage holdings of our common
stockholders by approximately 60%, we believe this financing would provide us
with the necessary funds to fully implement our business plan.

         The Series D Preferred Stock would include a 6% non-cumulative
dividend, a liquidation preference equal to the original purchase price, plus
any declared but unpaid dividends, automatic conversion into common stock with
the consent of a majority of the Series D Preferred stockholders; voting rights
consisting of that number of votes equal to the number of shares of common stock
then issuable upon conversion of such shares of Series D Preferred Stock, and
two demand and unlimited piggy-back registration rights.

         As a condition to closing the Series D Preferred Stock financing, the
investors are requiring that we obtain the following: (a) a new funding line to
finance the placement of its products on a revenue sharing basis; (b) compliance
with Nasdaq's minimum bid requirement of $1 per share, for ten consecutive
trading days, by January 15, 2003; and (c) consent from Nasdaq, or a majority of
our shareholders, to issue the Series D Preferred Stock on the proposed terms.

         There is no assurance that we will be able to obtain the consent of
Nasdaq, or a majority of our shareholders, to undertake the Series D Preferred
Stock financing. If we are unsuccessful in obtaining the Series D Preferred
Stock financing, our ability to continue as a going concern will be in
substantial doubt. Based on the foregoing, exclusive of any proceeds from the
proposed Series D Preferred Stock financing, we may not have sufficient
cash-on-hand to sustain our routine business operations through the fourth
quarter of 2002 given the restricted nature of the interim debt financing, our
available cash position of $6,255 as of November 11, 2002 (exclusive of the
interim debt financing proceeds deposited in a third party trust account) and
our continued monthly operational losses.

                                       20
<PAGE>

CONTRACTUAL CASH OBLIGATIONS AND COMMERCIAL COMMITMENTS

         The following table presents our contractual cash obligations and
commercial commitments as of September 30, 2002, including those due by RSi BRE.
The table includes principal and interest on long-term debt, capital lease
obligations and principal and interest payments due by RSi BRE under revenue
sharing agreements. We have no other significant contractual obligations or
commercial commitments either on or off our consolidated balance sheet as of
this date.
<TABLE>
<CAPTION>

CONTRACTUAL CASH                                                   PAYMENTS DUE BY PERIOD
OBLIGATIONS
----------------------------------                                                                               > 5
                                        TOTAL             <1 YEAR          1-3 YEARS         4-5 YEARS          YEARS
----------------------------------    -------------    ------------    ---------------    --------------    -------------
<S>                                     <C>              <C>             <C>                <C>               <C>
Long-term Debt                          $2,405,386       $ 436,716       $    873,432       $  810,675        $  284,563
Capital Lease Obligations                    7,261           7,261                 -                -                 -
Other Long-term Obligations*             1,346,592         336,648            673,296          336,648                -
----------------------------------    -------------    ------------    ---------------    --------------    -------------
TOTAL                                   $3,759,239       $ 780,625       $  1,546,728       $1,147,323        $  284,563
                                      =============    ============    ===============    ==============    =============
</TABLE>

* Assumes we receive $0.57 per unit per day of the revenue from the revenue
sharing agreements that is applied to the obligation incurred by RSi BRE, Inc.,
our wholly-owned, unconsolidated subsidiary.

RECENT DOWNTURNS IN THE AIRLINE, TRAVEL AND LODGING INDUSTRIES

         Due to the weakening economy and the events of September 11, 2001, the
travel and lodging industries have experienced unprecedented downturns. More
specifically, the lodging industry has experienced lower hotel occupancy rates
due to reduced business and leisure travel. Since the success of our business is
directly linked to the performance of the travel and lodging industries, the
substantial layoffs in these industries, the postponement of future hotel
renovations and projects, the substantial drop-off in guest occupancy and the
reduction in business and leisure travel, including convention traffic, have
hurt our ability to finalize contracts with hotel properties with which we have
been meeting and negotiating. While the hospitality market has improved over the
last six to nine months, in terms of occupancy rates, REVPAR and ADR numbers,
the market is materially weaker than prior to September 11, 2001. In this
regard, there is no assurance that we will be able to close contracts with our
current potential customers or that we will be successful in starting
discussions with other hotel properties.

ITEM 3.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.

         All of our products are now manufactured and assembled in China.  Our
contract manufacturer, International Display Works Ltd., or IDW, purchases all
components of our refreshment center and eRoomTray products in China.  Our safe
manufacturer, Hospitality Safe Corporation, or HSC, manufactures and assembles
our eRoomSafes in China as well.  We pay IDW and HSC in U.S. dollars.

         Our products are primarily marketed in the United States, but we
eventually intend to further expand our marketing to the international lodging
market and to other industries domestically and internationally. As a result,
our financial results could be affected by weak economic conditions in foreign
markets. Because all of our revenues will be denominated in U.S. Dollars, a
strengthening of the dollar could make our products less competitive in foreign
markets.

                                       21
<PAGE>

As we expand operations internationally, we will continue to evaluate our
foreign currency exposures and risks and develop appropriate hedging or other
strategies to manage those risks. We have not revised our current business
practices to conform to Europe's conversion to the Euro.

ITEM 4.    EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

         (a) Evaluation of Disclosure Controls and Procedures. Our chief
executive officer, chief operating officer and chief financial officer, after
evaluating the effectiveness of our "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934, Rules 13a-14(c) and 15-d-14(c))
as of a date (the "Evaluation Date") within 90 days before the filing date of
this quarterly report, have concluded that, as of the Evaluation Date, our
disclosure controls and procedures were adequate and designed to ensure that
material information relating to us and our consolidated subsidiaries would be
made known to them by others within those entities.

         (b) Changes in Internal Controls. There were no significant changes in
our internal controls, or, to our knowledge, in other factors that could
significantly affect these controls subsequent to the Evaluation Date.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         On March 28, 2001, we received a letter from our former chairman and
chief executive officer, Steven Sunyich, in which he claims he is due certain
severance and other payments pursuant to the terms of his terminated employment
agreement. Mr. Sunyich claims that he is owed approximately $200,000 in
severance payments and approximately $1,500,000 in payments related to a
repurchase clause contained in his terminated employment agreement. The matter
has been submitted to binding arbitration, to be administered by the American
Arbitration Association pursuant to the terms of the terminated employment
agreement. In October 2001, the arbitrator issued a discovery order pursuant to
which the parties have been exchanging documents and witness lists in
preparation for the arbitration hearing. Although originally scheduled for
February 2002, the arbitration hearing was conducted on August 12, 2002 and
August 13, 2002. In October 2002, the arbitrator ruled in our favor. The
arbitration's ruling stated that Mr. Sunyich is obligated to pay us punitive
damages in the amount of $47,422 as a result of being found to have breached
several provisions of his employment contract with us.

         On November 7, 2002, we were served with a compliant for eviction and
breach of lease by PamJoy Realty, Inc., the landlord of our St. George facility.
Pam Joy Realty is claiming damages in the approximate amount of $30,000 for
unpaid rent, property taxes, date changes and attorneys' fees. We will attempt
to settle the claim quickly given that we have received $250,000 of interim
financing from Ash Capital, LLC. We estimate that our obligation to Pam Joy
Realty will not exceed $30,000 in total.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

          Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         Not applicable.

                                       22
<PAGE>

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         Non applicable.

ITEM 5.  OTHER INFORMATION.

         Listing Requirements. Our common stock has been publicly traded on the
Nasdaq SmallCap Market since August 3, 2000. Since July 27, 2002, our common
stock has failed to meet the minimum bid price requirement of $1.00 as required
by the continued listing rules of the Nasdaq SmallCap Market. Under the
continued listing rules, a company whose securities fall below the minimum bid
price or the minimum public float requirements for 30 consecutive business days
are given a 180-day grace period to regain compliance. A company may demonstrate
compliance by meeting the applicable standard for a minimum of 10 consecutive
business days. We must satisfy Nasdaq's minimum bid price requirement by January
23, 2003. If we fail to do so, we may be subject to delisting.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

     (a)    Exhibits.

              10.1     Stock Purchase Agreement.

              10.2     Convertible Secured Promissory Note.

              99.1     Certifications Pursuant to Section 906 of the
                       Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).

     (b)    Reports on Form 8-K.

         On November 14, 2002, we filed a Current Report on Form 8-K regarding
receipt of $250,000 of interim financing from Ash Capital, LLC and our pending
private placement of up to $2,500,000 of Series D Preferred Stock, subject to
receipt of Nasdaq or shareholder approval.


                                    SIGNATURE

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                     eROOMSYSTEM TECHNOLOGIES, INC.
                                     (Registrant)

Date:   November 14, 2002            By:  /s/ David S. Harkness
                                          --------------------------------------
                                          David S. Harkness
                                     Its: Chief Executive Officer, President and
                                          Chairman

                                       23

<PAGE>

                         eROOMSYSTEM TECHNOLOGIES, INC.

                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


     I, David S. Harkness, Chief Executive Officer, President and Chairman of
eRoomSystem Technologies, Inc., certify that:

1.                I have reviewed this quarterly report on Form 10-QSB of
                  eRoomSystem Technologies, Inc.;

2.                Based on my knowledge, this quarterly report does not contain
                  any untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements made, in light
                  of the circumstances under which such statements were made,
                  not misleading with respect to the period covered by this
                  quarterly report;

3.                Based on my knowledge, the financial statements, and other
                  financial information included in this quarterly report,
                  fairly present in all material respects the financial
                  condition, results of operations and cash flows of the
                  registrant as of, and for, the periods presented in this
                  quarterly report;

4.                The registrant's other certifying officer and I are
                  responsible for establishing and maintaining disclosure
                  controls and procedures (as defined in the Exchange Act Rules
                  13a-14 and 15d-14) for the registrant and we have:

                    a.   designed such disclosure controls and procedures to
                         ensure that material information relating to the
                         registrant, including its consolidated subsidiaries, is
                         made known to us by others within those entities,
                         particularly during this period in which the quarterly
                         report is being prepared;

                    b.   evaluated the effectiveness of the registrant's
                         disclosure controls and procedures as of a date within
                         90 days prior to the filing date of this quarterly
                         report (the "Evaluation Date"); and

                    c.   presented in this quarterly report our conclusions
                         about the effectiveness of the disclosure controls and
                         procedures based on our evaluation as of the Evaluation
                         Date;

5.                The registrant's other certifying officer and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the audit committee of registrant's
                  board of directors (or persons performing the equivalent
                  function):

                    a.   all significant deficiencies in the design or operation
                         of internal controls which could adversely affect the
                         registrant's ability to record, process, summarize and
                         report financial data and have identified for the
                         registrant's auditors any material weaknesses in
                         internal controls; and

                    b.   any fraud, whether or not material, that involves
                         management or other employees who have a significant
                         role in the registrant's internal controls; and

6.                The registrant's other certifying officer and I have indicated
                  in this quarterly report whether or not there were significant
                  changes in internal controls or in other factors that could
                  significantly affect internal controls subsequent to the date
                  of our most recent evaluation, including any corrective
                  actions with regard to significant deficiencies and material
                  weaknesses.


Date:  November 14, 2002     By:
                                ----------------------------------------
                                David S. Harkness, Chief Executive Officer,
                                   President and Chairman

                                       24
<PAGE>


                         eROOMSYSTEM TECHNOLOGIES, INC.

                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


     I, Derek K. Ellis, Chief Financial Officer and Treasurer of eRoomSystem
Technologies, Inc., certify that:

1.                I have reviewed this quarterly report on Form 10-QSB of
                  eRoomSystem Technologies, Inc.;

2.                Based on my knowledge, this quarterly report does not contain
                  any untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements made, in light
                  of the circumstances under which such statements were made,
                  not misleading with respect to the period covered by this
                  quarterly report;

3.                Based on my knowledge, the financial statements, and other
                  financial information included in this quarterly report,
                  fairly present in all material respects the financial
                  condition, results of operations and cash flows of the
                  registrant as of, and for, the periods presented in this
                  quarterly report;

4.                The registrant's other certifying officer and I are
                  responsible for establishing and maintaining disclosure
                  controls and procedures (as defined in the Exchange Act Rules
                  13a-14 and 15d-14) for the registrant and we have:

                    a.   designed such disclosure controls and procedures to
                         ensure that material information relating to the
                         registrant, including its consolidated subsidiaries, is
                         made known to us by others within those entities,
                         particularly during this period in which the quarterly
                         report is being prepared;

                    b.   evaluated the effectiveness of the registrant's
                         disclosure controls and procedures as of a date within
                         90 days prior to the filing date of this quarterly
                         report (the "Evaluation Date"); and

                    c.   presented in this quarterly report our conclusions
                         about the effectiveness of the disclosure controls and
                         procedures based on our evaluation as of the Evaluation
                         Date;

5.                The registrant's other certifying officer and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the audit committee of registrant's
                  board of directors (or persons performing the equivalent
                  function):

                    a.   all significant deficiencies in the design or operation
                         of internal controls which could adversely affect the
                         registrant's ability to record, process, summarize and
                         report financial data and have identified for the
                         registrant's auditors any material weaknesses in
                         internal controls; and

                    b.   any fraud, whether or not material, that involves
                         management or other employees who have a significant
                         role in the registrant's internal controls; and

6.                The registrant's other certifying officer and I have indicated
                  in this quarterly report whether or not there were significant
                  changes in internal controls or in other factors that could
                  significantly affect internal controls subsequent to the date
                  of our most recent evaluation, including any corrective
                  actions with regard to significant deficiencies and material
                  weaknesses.



Date: November 14, 2002
                        By:
                           -----------------------------------------------------
                           Derek K. Ellis, Chief Financial Officer and Treasurer

                                       25

<PAGE>

                                  EXHIBIT 99.1

                         eROOMSYSTEM TECHNOLOGIES, INC.

                            CERTIFICATION PURSUANT TO

                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


         In connection with the Quarterly Report of eRoomSystem Technologies,
Inc. (the "Company") on Form 10-QSB for the quarterly period ended September 30,
2002, as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), we, David S. Harkness, Chief Executive Officer, President and
Chairman of the Company, and Derek K. Ellis, Chief Financial Officer and
Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

     1.   The Report fully complies with the requirements of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     2.   The information contained in the Report fairly presents, in all
          material respects, the financial condition and result of operations of
          the Company.

By:                                                    Dated:  November 14, 2002
              --------------------------------------
              David S. Harkness
Title:        Chief Executive Officer, President and
              Chairman

By:                                                    Dated:  November 14, 2002
              --------------------------------------
              Derek K. Ellis
Title:        Chief Financial Officer and Treasurer

         This certification is made solely for the purposes of 18 U.S.C. Section
1350, subject to the knowledge standard contained therein, and not for any other
purpose.

                                       26