**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-KSB**

| **HOTEL                OUTSOURCE MANAGEMENT INTERNATIONAL INC.**                  |
|-----------------------------------------------------------------------------------|
| (Name                of Small Business Issuer in its charter)                     |
|                                                                              |   |
| **Delaware**                                                                      | **13-4167393** |
| (State                of Incorporation)                                           | (IRS                Identification Number) |
|                                                                              |   |
| **80                Wall Street, Suite 815****New                York, New York** | **10005** |
| (Address                of principal executive offices)                           | (Zip                Code) |

|                               | Name                of each exchange on which |
|------------------------------------|-----------------------------------------------|
| Title                of each class | Registered                                    |
| 0                                  | 0                                             |

**Common      Stock, par value $0.001**

----

**36,548,815      shares at $0.50**
**(1)**

**      = $18,274,407**

**(APPLICABLE      ONLY TO CORPORATE REGISTRANTS)**

**36,548,815**

**DOCUMENTS      INCORPORATED BY REFERENCE**

----

| **PART                  I**  |                                                                                                                                                                                                                                                                                                            |
|------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Item                  1      | Business.....................................................................................................................................................................           | 5 |
|                         | General.........................................................................................................................................................................        | 5 |
|                         | Our                  Growth                  Strategy...................................................................................................................................................... | 5 |
|                         | Operations...................................................................................................................................................................               | 6 |
|                         | Competition..................................................................................................................................................................                   | 7 |
|                         | Customers                  and                  Markets.................................................................................................................................................        | 9 |
|                         | Government                  Regulations................................................................................................................................................                             | 9 |
|                         | Intellectual                  Property.......................................................................................................................................................               | 9 |
|                         | Employees...................................................................................................................................................................                | 10 |
|                         | Corporate                  Structure.......................................................................................................................................................                 | 10 |
| Item                  2      | Description                  of                  Property.................................................................................................................................................      | 10 |
| Item                  3      | Legal                  Proceedings........................................................................................................................................................              | 11 |
| Item                  4      | Submission                  of Matters to a Vote of Security                  Holders..........................................................................................................                                                                 | 11 |
|                         |                                                                                                                                                                                                                                                                                                            |   |
| **PART                  II** |                                                                                                                                                                                                                                                                                                            |
|                         |                                                                                                                                                                                                                                                                                                            |   |
| Item                  5      | Market                  for Registrant’s Common Equity, Related Stockholder                  Matters,                                                                                                                                                                                                     |   |
|                         |                                                                                                                                                                                                                                                                                                            | and                  Small Business Issuer Purchases of Equity                  Securities.................................................................................................. | 11 |
| Item                  6      | Management’s                  Discussion and Analysis of Financial Condition and                                                                                                                                                                                                                          |   |
|                         |                                                                                                                                                                                                                                                                                                            | Results                  of                  Operations......................................................................................................................................................... | 12 |
|                         | Forward-Looking                  Statements...........................................................................................................................................                                  | 12 |
|                         | Critical                  Accounting                  Policies.............................................................................................................................................             | 13 |
|                         | Revenue                  Recognition, Accounts Receivable and Allowance for                  Doubtful                                                                                                                                                                                                           |   |
|                         |                                                                                                                                                                                                                                                                                                            | Accounts............................................................................................................................................................... | 13 |
|                         | Long-Lived                  Assets........................................................................................................................................................              | 13 |
|                         | Overview.....................................................................................................................................................................           | 14 |
|                         | Cost                  and                  Expenses ................................................................................................................................................................................                                                        |  14 |
|                         | Financing                Agreement .............................................................................................................................................................................                                                                                           |  14 |
|                         | Results                  of                  Operations.................................................................................................................................................... | 15 |
|                         | Liquidity                    and Capital                    Resources.......................................................................................................................................                | 16 |
|                         | Subsequent                  Events........................................................................................................................................................              | 17 |
|                         | Off-Balance                  Sheet                  Arrangements......................................................................................................................................                          | 18 |
|                         | Inflation.......................................................................................................................................................................        | 18 |
|                         | International                  Tax                  Implications..........................................................................................................................................              | 18 |
| Item                  7      | FinancialStatements........................................................................................................................................................                             | 18 |
|                         | Report                  of Independent Registered Public Accounting Firm..............................................................................................................                                                                                                                          |   |
|                         | Consolidated                  Balance                  Sheets...........................................................................................................................................                |   |
|                         | Consolidated                  Statements of                  Operations..............................................................................................................................                                   |   |
|                         | Consolidated                  Statements of shareholders’                  Equity................................................................................................................                                                 |   |
|                         | Consolidated                  Statements of Cash                  Flows............................................................................................................................                                     |   |
|                         | Notes                  to Consolidated Financial                  Statements.......................................................................................................................                                         |   |
| Item                  8      | Changes                  In and Disagreements With Accountants on Accounting on                                                                                                                                                                                                                                 |   |
|                         |                                                                                                                                                                                                                                                                                                            | Accounting                  and Financial                  Disclosure............................................................................................................................ | 18 |
| Item                  8A     | Controls                  and                  Procedures..................................................................................................................................................         | 18 |
| Item                  8B     | Other                  Information...........................................................................................................................................................           | 19 |

----

**TABLE      OF CONTENTS**

**(Continued)**

| **PART                  III** |                                                                                                                                                                                                                                                                                                         |
|-------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          |                                                                                                                                                                                                                                                                                                         |
| Item                  9       | Directors                  and Executive Officers of the                  Registrant..............................................................................................                                                                   | 19 |
| Item                  10      | Executive                  Compensation.................................................................................................................................................                     | 21 |
| Item                  11      | Security                  Ownership of Certain Beneficial Owners and Management and                                                                                                                                                                                                                          |   |
|                          |                                                                                                                                                                                                                                                                                                         | Related                  Stockholder                  Matters....................................................................................................................................... | 22 |
| Item                  12      | Certain                  Relationships and Related                  Transactions.................................................................................................................                                                | 24 |
| Item                  13      | Exhibits........................................................................................................................................................................ | 25 |
| Item                  14      | Principal                  Accountant Fees and                  Services............................................................................................................................                                 | 26 |
|                          | Signatures.....................................................................................................................................................................          | 27 |
|                          |                                                                                                                                                                                                                                                                                                         |   |

----

**FORM      10-KSB**

**HOTEL      OUTSOURCE MANAGEMENT INTERNATIONAL, INC.**

**PART      I.**

**ITEM      1.       DESCRIPTION OF BUSINESS**

**General      **

**Our      Growth Strategy **

----

**Operations**

**Complete      Outsource Solution.**

----

|   | § | No                capital expenditure on the minibars |
|--------|--------|-------------------------------------------------------|

|   | § | A                new revenue stream, if no minibars were previously installed and                operational |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | § | No                labor expenses and no operating                costs |
|--------|--------|------------------------------------------------------------------------|

|   | § | No                purchase of goods and no inventory                management |
|--------|--------|--------------------------------------------------------------------------------|

|   | § | Added                service to guests, thereby improving the customer’s competitive                edge |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | § | No                downside: hotel is minimizing its risks, both financial and                other |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | § | Added                flexibility, via the customer’s option to purchase the                system |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | § | Outsourcing                allows the hotel to focus on major revenue                sources |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | § | Quality                of service: we specialize in the                field |
|--------|--------|------------------------------------------------------------------------------|

|   | § | Increased                control and management, extensive                reporting |
|--------|--------|-------------------------------------------------------------------------------------|

|   | § | No                maintenance by customer |
|--------|--------|-------------------------------------------|

|   | § | Periodic                technical and technological                upgrades |
|--------|--------|-----------------------------------------------------------------------------|

**Outsource      Solution for Leased Base.**

**Management      & Operation of Installed Base.**

**Management      of Installed Base.**

**Other.**

**Competition**

----

|   | § | implementation                of our exclusive operating                procedures |
|--------|--------|------------------------------------------------------------------------------------|

|   | § | procurement                of the consumables that are offered in the                minibars |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | § | management                of inventory control and monitoring of expiry dates of                consumables |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | § | implementation                of procedures to handle and reduce                rebates |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | § | daily                reconciliation of accounts |
|--------|--------|-------------------------------------------------|

|   | § | training                of minibar attendants and front office                employees |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | § | maintenance                and support |
|--------|--------|----------------------------------------|

|   | § | taking                active involvement in the selection and pricing of                consumables |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | § | implementing                innovative and attractive product mixes for different room                categories |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | § | producing                attractive, creative and novel                menus |
|--------|--------|------------------------------------------------------------------------------|

|   | § | improving                minibar visibility |
|--------|--------|---------------------------------------------|

|   | § | proposing                and implementing effective promotional                activities |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | § | reducing                rebates & manual emptying of minibars by                guests |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | § | in-depth                and real-time data logging and reporting, thereby creating extensive                sales                statistics and enabling effective data-mining, designed to adapt                the                system to improve performance |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Customers      and Markets **

|   | **Ø** | Hyatt                Regency San Francisco, USA |
|--------|------------|-------------------------------------------------|

|   | **Ø** | Grand                Hyatt Seattle, USA |
|--------|------------|-----------------------------------------|

|   | **Ø** | Hyatt                Regency Boston, USA |
|--------|------------|------------------------------------------|

|   | **Ø** | The                Renaissance Mayflower, Washington DC,                USA |
|--------|------------|-----------------------------------------------------------------------------|

|   | **Ø** | ArabellaSheraton                Bogenhausen, Munich, Germany |
|--------|------------|--------------------------------------------------------------|

|   | **Ø** | ArabellaSheraton                Grand, Munich, Germany |
|--------|------------|--------------------------------------------------------|

|   | **Ø** | Sheraton                Diana Majestic, Milano, Italy |
|--------|------------|-------------------------------------------------------|

|   | **Ø** | Radisson                Bay Point, Malta |
|--------|------------|------------------------------------------|

|   | **Ø** | Radisson                Golden Sands, Malta |
|--------|------------|---------------------------------------------|

|   | **Ø** | Le                Meridien, Malta |
|--------|------------|-----------------------------------|

|   | **Ø** | Palazzo                InterContinental, Johannesburg,                S.Africa |
|--------|------------|--------------------------------------------------------------------------------|

|   | **Ø** | Airport                InterContinental, Johannesburg, S.Africa |
|--------|------------|-----------------------------------------------------------------|

|   | **Ø** | Arabella                Sheraton Cape Town, S. Africa |
|--------|------------|-------------------------------------------------------|

|   | **Ø** | David                InterContinental Tel-Aviv, Israel |
|--------|------------|--------------------------------------------------------|

|   | **Ø** | Carlton                Hotel, Tel-Aviv, Israel |
|--------|------------|------------------------------------------------|

|   | **Ø** | Sheraton                City Tower, Tel-Aviv, Israel |
|--------|------------|------------------------------------------------------|

|   | **Ø** | Dan                Hotel, Tel-Aviv, Israel |
|--------|------------|--------------------------------------------|

|   | **Ø** | The                Daniel, Herzliya, Israel |
|--------|------------|---------------------------------------------|

|   | **Ø** | David                Citadel (ex Hilton), Jerusalem,                Israel |
|--------|------------|----------------------------------------------------------------------------|

**Governmental      Regulation**

**Intellectual      Property**

----

**Employees**

**Corporate      Structure**

**HOS**
**Bartech**
**BSI**

**HOS**

**HOMI      Israel**

**HOMI      South Africa**

**HOMI      Australia**

**HOMI      Germany**

**HOMI      Italy**

**ITEM      2: **
**DESCRIPTION      OF PROPERTY **

|   | · | Our                corporate headquarters are located at 80 Wall Street, Suite 815,                New York,                New York, in the offices of Schonfeld & Weinstein, L.L.P., at no                additional cost to us. Schonfeld & Weinstein, L.L.P. serves as our US                Counsel and also owns shares in our company. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | HOMI                Israel’s corporate headquarters are currently located at 4 Raul Wallenberg                Street, Tel Aviv, Israel, with a monthly rent of $400. This office                is                leased from an unaffiliated third party. We also lease a virtual                office at                116 West 23rd Street, New York, New York from Select Office Suites,                an                unrelated third party, for $100 per month on a month-to-month basis. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | HOS                has its corporate headquarters at 1 Embarcadero Center, Suite 500,                San                Francisco, California 94111. The monthly rent is $500. Most of HOS'                operations are conducted from the office we utilize at the Hyatt                Regency                San Francisco, which is one of our customers. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | HOMI                South Africa operates from an office in Johannesburg for monthly                rent of                $350. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|

|   | · | In                connection with our European operations, we also lease an office                in Paris,                France, for monthly rent of approximately $1,350 (€1,130). |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**ITEM      3: **
**LEGAL      PROCEEDINGS **

**ITEM      4**
**SUBMISSION      OF MATTERS TO VOTE OF SECURITY HOLDERS**

**PART      II. **

**ITEM      5. **
**MARKET      FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL      BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES**

**Market      For Common Stock **

| First                  Quarter 2005  |
|--------------------------------------|
|                                 |
| High                  Bid $0.60      | Low                  Bid $0.48 |
|                                 |   |
|                                 |   |
| Second                  Quarter 2005 |
|                                 |
| High                  Bid $1.20      | Low                  Bid $0.30 |
|                                 |   |
|                                 |   |
| Third                  Quarter 2005  |
|                                 |   |
| High                  Bid $1.18      | Low                  Bid $0.38 |
|                                 |   |
|                                 |   |
| Fourth                  Quarter 2005 |
|                                 |
| High                  Bid $1.23      | Low                  Bid $0.37 |
|                                 |   |

----

**Recent      Sales of Unregistered Securities**

**ITEM      6. **
**MANAGEMENTS      DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL      CONDITION**

**Forward-Looking      Statements**

**Critical      Accounting Policies **

----

**Revenue      recognition, Accounts Receivable and Allowance for Doubtful      Accounts**

**Long-Lived      Assets **

**Overview**

----

**Costs      and Expenses**

|   | (1) | the                purchase of the minibars system to be installed in hotels; this capital                expense is charged to property and equipment and depreciated over                a period                of ten years; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | the                purchase of the consumables to be placed in the minibars; we purchase                these products from various vendors; sometimes the customer will                purchase                the alcoholic beverages to be placed in the minibars and we reimburse                the                customer for such purchases; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | labor                costs of the minibar attendants; |
|--------|-----|-------------------------------------------------------|

|   | (4) | G&A,                and marketing; |
|--------|-----|----------------------------------------|

|   | (5) | maintenance                of the minibar systems; |
|--------|-----|----------------------------------------------------|

|   | (6) | finance                expenses. |
|--------|-----|----------------------------------|

**Financing      Agreement**

----

**Revenues**

| Location                                  | Percentage                  of Revenues |
|-------------------------------------------|-----------------------------------------|
|                                      | 2005                                    |   | 2004 |
|                                      |                                    |   |   |
| United                  States of America | 41%                                     |   | 42% |
| Europe                                    | 23                                      |   | 10 |
| Israel                                    | 20                                      |   | 26 |
| South                  Africa             | 16                                      |   | 22 |
| Totals                                    | 100%                                    |   | 100% |

**Gross      Profit**

**Cost      Of Revenues: **

----

**Operating      Expenses **

**Net      Loss**

**Liquidity      And Capital Resources**

----

**Subsequent      Events**

----

**Off      Balance Sheet Arrangements**

**Inflation**

**International      Tax Implications **

**ITEM      7.**
**FINANCIAL STATEMENTS**

**ITEM      8.**
**CHANGES      AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE **

**ITEM      8A.**
**CONTROLS      AND PROCEDURES**

----

**ITEM      **
**8B.      OTHER INFORMATION**

**PART      III**

**ITEM      9. **
**DIRECTORS      AND EXECUTIVE OFFICERS **

**Directors      and Executive Officers**

| NAME                              | AGE    | POSITION                                  |
|-----------------------------------|--------|-------------------------------------------|
|                              |   |                                      |
| Jacob                  Ronnel     | 49     | CEO,                  President, Director |
|                              |   |                                      |
| Ariel                  Almog      | 38     | COO,                  Secretary, Director |
|                              |   |                                      |
| Sigal                  Grinboim   | 41     | CFO                                       |
|                              |   |                                      |
| Avraham                  Bahry    | 60     | Chairman                                  |
|                              |   |                                      |
| Jules                  Polak      | 59     | Director                                  |
|                              |   |                                      |
| Boaz                  Tamir       | 53     | Director                                  |
|                              |   |                                      |
| Jacob                  Faigenbaum | 52     | Director                                  |

**Biographies      **

**Jacob      Ronnel**

----

**Ariel      Almog**

**Sigal      Grinboim**

**Avraham      Bahry**

**Boaz      Tamir**

**Jules      M. Polak**

**Jacob      Faigenbaum**

**Compliance      with Section 16(a) of the Exchange Act**

----

**Code      of Ethics**

**Audit      Committee Financial Expert**

| **ITEM.                10** | **EXECUTIVE                COMPENSATION** |
|-----------------------------|-------------------------------------------|

| NameAndPrincipalPosition         | Year                                                    | Annual                  Compensation | Long-Term                  Compensation | All                  Other Compen-sation($) |
|----------------------------------|---------------------------------------------------------|--------------------------------------|-----------------------------------------|---------------------------------------------|
| Salary($)                        | Bonus($)                                                |  OtherAnnualCompen-sation($)    | Awards                                  |
| RestrictedStockAward(s)($)       | Securities                  Underlying Options/ SARs($) |
| Jacob                  Ronnel(1) |                                                    |                                 |                                    |                                        |   |   |   |
| CEO,                  President  | 2003                                                    | $100,000                             |                                    |                                        |   |   |   |
|                             |  2004                                              | $100,000                             |                                    |                                        |   |   | $13,491 |
|                                  | 2005                                                    | $107,994                             |                                    | $4,750-                  interest           |  |  |  |
| Ariel                  Almog(2)  |                                                    |                                 |                                    |                                        |   |   |   |
| COO,                  Secretary  | 2003                                                    | $130,200                             |                                    |                                        |   |   |   |
|                             |  2004                                              | $161,000                             |                                    |                                        |   |   |   |
|                             | 2005                                                    | $153,979                             |                                    | $6,000-                  interest           |   |   |   |
| Sigal                  Grinboim  |                                                    |                                 |                                    |                                        |   |   |   |
| CFO                              | 2003                                                    | N/A                                  |                                    |                                        |   |   |   |
|                             | 2004                                                    | $20,000                              |                                    |                                        |   |   |   |
|                             | 2005                                                    | $48,000                              |                                    |                                        |   |   |   |
| Avraham                  Bahry   |                                                    |                                 |                                    |                                        |   |   |   |
| Chairman                         | 2003                                                    | N/A                                  |                                    |                                        |   |   |   |
|                             | 2004                                                    | $5,000                               |                                    |                                        |   |   |   |
|                             |  2005(3)                                           | $0                                   |                                    |                                        |   |   |   |

----

| (1) | In                2004, Mr. Ronnel’s salary was paid as follows: HOMI Israel- $24,497;                HOS-$39,996; HOMI- $48,998. According to the employment agreement                entered                into by Jacob Ronnel and HOS which commenced June 2002, Mr. Ronnel                shall                serve as Chief Executive Officer at $80,000 per year; however, Mr.                Ronnel                received only 50% of his base salary ($40,000 per year) until June                2003,                and resumed his $80,000 per year salary in July 2003. Mr. Ronnel                is                entitled to an annual performance-based bonus. HOS may terminate                this                agreement upon 90 days written notice. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Mr.                Almog’s entire salary was paid by HOS. |
|-----|-----------------------------------------------------------------|

| (3) | Mr.                Avraham Bahry has a consulting agreement with HOMI, pursuant to which                he                receives $75,000 per year commencing January 1, 2005; however, he                has                agreed to waive any payments until such time as HOMI achieves a net                profit. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Directors      Compensation**

**ITEM      11:**
**SECURITY      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER      MATTERS**

**Principal      Stockholders**

| ·   | More                than 5% of the outstanding shares of our common stock; |
|--------------------|----------------------------------------------------------------------------|
| ·   | Each                of our officers and directors; |
|--------------------|----------------------------------------------------|
| ·   | All                  of our officers and directors as a                  group. |
|--------------------|---------------------------------------------------------------------------------|

----

| Names                and Address of Beneficial Owner                                                                                          | Number                of Shares Beneficially Owned | %                Beneficially Owned |
|-----------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|-------------------------------------|
|                                                                                                                                          |                                               |                                |
| Jacob                Ronnel21                Hasvoraim Street Tel                Aviv, Israel                                                 | 2,379,312                                          | 6.5%                                |
|                                                                                                                                          |                                               |                                |
| Ariel                Almog224                Maypoint Drive, San                Raphael, CA                                                   | 2,894,832                                          | 7.9%                                |
|                                                                                                                                          |                                               |                                |
| Blackborn                Consulting (1999) LTD.(1) 25                HaMerad Street Tel                Aviv, Israel                      | 3,176,917                                          | 8.7%                                |
|                                                                                                                                          |                                               |                                |
| Rodia                Mihali (2)21                Neher St Munich,                Germany                                                      | 1,307,917(                                         | 3.6%                                |
|                                                                                                                                          |                                               |                                |
| Sigal                Grinboim7                Barazani Street Ramat                Aviv, Israel                                               | 0                                                  | 0%                                  |
|                                                                                                                                          |                                               |                                |
| Avraham                Bahry1                Gan Hashikmin Street Ganei-Yehuda-Savion,                Israel                                  | 3,566,838                                          | 9.8%                                |
|                                                                                                                                          |                                               |                                |
| Jules                Polak4                Kiriati Street Ramat                Gan, Israel                                                    | 0                                                  | 0%                                  |
|                                                                                                                                          |                                               |                                |
| Boaz                Tamir10                Hoaranim Street Zichron-Yaacov,                Israel                                              | 0                                                  | 0%                                  |
|                                                                                                                                          |                                               |                                |
| Robert                W. Singer (3)2110                West County Line Road Jackson,                New Jersey                               | 0                                                  | 0%                                  |
|                                                                                                                                          |                                               |                                |
| Jacob                FaigenbaumMigdal                Moshe Aviv7                Jabotinsky Street, 19th FloorRamat                Gan, Israel | 0                                                  | 0%                                  |
|                                                                                                                                          |                                               |                                |
| All                officers and directors as a group                (10 people)(2)(3)                                                         | 5,946,150                                          | 16.3%(2)                            |

| (1) | The                beneficial owner of the securities held by Blackborn Consulting is                Mr.                Benzion Perko, 17 Alterman Street, Kfar-Saba, Israel. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Mr                Mihali resigned as director in                2005. |
|-----|-----------------------------------------------------------------------|

| (3) | Senator                Singer resigned as a director in                2005 |
|-----|-----------------------------------------------------------------------------|

----

**ITEM      12:**
** **
**CERTAIN      RELATIONSHIPS AND RELATED TRANSACTIONS. **

| Description                                                      |   | 2004    |   | 2005    |
|------------------------------------------------------------------|--------|---------|--------|---------|
|                                                             |   |    |   |    |
| Rent                    and office services                      | $      | 37,000  | $      | -       |
| Directors’                    fees and liability insurance |   | -       |   | 45,000  |
| Consulting                    fees                               |   | 158,000 |   | 242,000 |
|                                                             |   |    |   |    |
| Totals                                                           | $      | 195,000 | $      | 287,000 |

----

**ITEM      13.**
**EXHIBITS      **

| (a) | Exhibits                required by Item 601 of Regulation                S-B |
|-----|-------------------------------------------------------------------------------|

| 2.1                                    | Acquisition                Agreement between Benjamin Acquisitions, Inc. and Bartech Mediterranean                International, Ltd.                (1) (2)                                                                                   |
|----------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                                    | Certificate                of Incorporation                (1) (2)                                                                                                                                                                             |
|                    3.1A | Certificate                of Amendment to Certificate of Incorporation(1) (2)                                                                                                                                                                 |
| 3.2                                    | By-Laws                (1) (2)                                                                                                                                                                                                                 |
| 10.1                                   | HOMI                Israel-BSI Agreement for Israel, Jordan and Turkey                (1) (3)                                                                                                                                                  |
| 10.2                                   | HOMI                Israel-BSI Agreement for South Africa                (1) (3)                                                                                                                                                               |
| 10.3                                   | HOS-BSI                Stock Purchase Agreement((1) 3)                                                                                                                                                                                         |
| 10.4                                   | HOS-BSI                Stockholders' Agreement                (1) (3)                                                                                                                                                                          |
| 10.5                                   | HOS-BSI                Option                (1) (3)                                                                                                                                                                                           |
| 10.6                                   | HOS                Purchase Option Agreement                (1) (3)                                                                                                                                                                            |
| 10.7                                   | Bank                Leumi Credit Agreement                (1) (3)                                                                                                                                                                              |
| 10.8                                   | Bank                Leumi Promissory Note                (1) (3)                                                                                                                                                                               |
| 10.9                                   | Bank                Leumi Security Agreement                (1) (3)                                                                                                                                                                            |
| 10.10                                  | Assignment                by HOMI Israel to Protel Bilgisayar Limited Sirketi                (1) (3)                                                                                                                                           |
| 10.11                                  | Agreement                between HOMI Israel and Intercontinental Hotels Corporation                (1) (4)                                                                                                                                    |
| 10.12                                  | Strategic                Alliance between Bartech E.M.E.A SARL and HOMI                (1) (6)                                                                                                                                                 |
| 10.13                                  | Consulting                Agreement between HOMI Israel and Muscum Holding Corp.                (1) (5)                                                                                                                                        |
| 10.14                                  | Employment                Agreement between HOS and Ariel Almog                (1) (5)                                                                                                                                                         |
| 10.15                                  | Employment                Agreement between HOS and Jacob Ronnel                (1) (5)                                                                                                                                                        |
| 10.16                                  | Agreement                with Rodia Mihali                (1) (6)                                                                                                                                                                              |
| 10.17                                  | Loan                Agreement by and between HOMI and Jacky Ronnel dated December 1,                2003                (1) (7)                                                                                                                     |
| 10.18                                  | Loan                Agreement by and between HOMI and Ariel Almog dated December 1,                2003(1)                (7)                                                                                                                       |
| 10.19                                  | Loan                Agreement by and between HOMI and Avraham Bahry and Rodia Mihali                dated                March 1, 2003(1)                (7)                                                                                        |
| 10.20                                  | Financing                Agreement between HOMI and Solog Mifalelei Srigah Ltd. dated February                28,                2005(9)                                                                                                            |
| 10.21                                  | Financing                Agreement between HOMI and Solog Mifalelei Srigah Ltd., as amended                on May                17, 2005(10)                                                                                                       |
| 10.22                                  | Loan                Agreement by and between HOMI and Avraham Bahry and Rodia Mihali                dated                November 2004.                                                                                                             |
| 14.0                                   | Code                of Ethics(8)                                                                                                                                                                                                                    |
| 21.0                                   | Subsidiaries(3)                                                                                                                                                                                                                                     |
| 31.1                                   | Certification                of Sigal Grinboim and Jacob Ronnel pursuant to Rule 13q-14(a) of                the                Securities Exchange Act of 1934                                                                                     |
| 32.1                                   | Certification                required by Rule 13a-14(b) under the Securities Exchange Act of 1934                and                Section 1350 of Chapter 63 of Title 18 of the United States Code                (18                U.S.C. 1350) |

----

|   | (1) | Incorporated by reference. |
|--------|-----|----------------------------|
|   | (2) | Incorporated                by reference from initial filing of registration statement on Form                SB-2                filed July 7, 2002. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Incorporated                by reference from Amendment No. 1 to registration statement on Form                SB-2                filed October 15, 2002. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Incorporated                by reference from Amendment No. 2 to registration statement on Form                SB-2                filed January 21, 2003. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Incorporated                by reference from Amendment No. 3 to registration statement on Form                SB-2                filed July 3, 2003. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Incorporated                by reference from Amendment No. 4 to registration statement on Form                SB-2                filed August 6, 2003. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (7) | Incorporated                by reference from Form 8-K filed April 8,                2004. |
|--------|-----|--------------------------------------------------------------------------------------------|

|   | (8) | Incorporated                by reference from Form 10-KSB filed on April 16,                2004. |
|--------|-----|---------------------------------------------------------------------------------------------------|

|   | (9) | Incorporated                by reference from Form 8-k filed March 1,                2005 |
|--------|-----|-------------------------------------------------------------------------------------------|
|   | (10)  | Incorporated by reference from Form 8-k filed May              19,              2005 |
|--------|------------|--------------------------------------------------------------------------------------|

----

**ITEM      14.**
**PRINCIPAL      ACCOUNTANT FEES AND SERVICES.**

**Audit      Committee Pre-Approval Policies and Procedures**

** **

----

**SIGNATURES**

| HOTEL                OUTSOURCE MANAGEMENT INTERNATIONAL, INC. |
|---------------------------------------------------------------|
|                                                          |   |   |
| Dated:                April 17, 2006                          |   | By:                /s/ Jacob Ronnel |
|                                                          |   | Jacob                Ronnel, President |
|                                                          |   |   |
|                                                          |   |   |

|   | /s/                Jacob Ronnel                        |   | /s/                Ariel Almog                  |
|--------|--------------------------------------------------------|--------|-------------------------------------------------|
|   | Jacob                Ronnel, President, Director       |   | Ariel                Almog, Secretary, Director |
| Dated: | April                17, 2006                          | Dated: | April                17, 2006                   |
|   |                                                   |   |                                            |
|   | /s/                Sigal Grinboim                      |   | /s/                Jacob Faigenbaum             |
|   | Sigal                Grinboim, Chief Financial Officer |   | Jacob                Faigenbaum, Director       |
| Dated: | April                10, 2006                          | Dated: | April                10, 2006                   |
|   |                                                   |   |                                            |
|   | /s/Avraham                Bahry                        |   | /s/                Jules                Polak   |
|   | Avraham                Bahry, Director                 |   | Jules                Polak, Director            |
| Dated: | April                17, 2006                          | Dated: | April                17, 2006                   |
|   |                                                   |   |                                            |
|   |                                                   |   |                                            |
|   | /s/Boaz                Tamir                           |   |                                            |
|   | Boaz                Tamir, Director                    |   |                                            |
| Dated: | April                17, 2006                          |   |                                            |

----

**HOTEL        OUTSOURCE MANAGEMENT **

**INTERNATIONAL        INC. **

**AND        SUBSIDIARIES**

**INDEX**

|                                                                        |   |
|-----------------------------------------------------------------------------|--------|
|                                                                        | Page   |
|                                                                        |   |
| Report                  of Independent Registered Public Accounting Firm    | 3      |
|                                                                        |   |
| Consolidated                  Balance Sheets                                | 4      |
|                                                                        |   |
| Consolidated                  Statements of Operations                      | 6      |
|                                                                        |   |
| Consolidated                  Statements of Changes in Shareholders' Equity | 7      |
|                                                                        |   |
| Consolidated                  Statements of Cash Flows                      | 8      |
|                                                                        |   |
| Notes                  to the Consolidated Financial Statements             | 10     |
|                                                                        |   |

----

**LETTERHEAD        OF KINGERY & CROUSE, P.A.]**

**REPORT        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

*To        the Stockholders and directors of Hotel Outsource International Management        Inc.        and subsidiaries: *

*We        have audited the accompanying consolidated balance sheets of Hotel Outsource        International Management Inc. and subsidiaries (the “Company”) as of December        31, 2005 and 2004 and the related consolidated statements of operations,        shareholders’ equity and cash flows for the years then ended. These consolidated        financial statements are the responsibility of the Company’s management. Our        responsibility is to express an opinion on these consolidated financial        statements based on our audits.*

*We        conducted our audits in accordance with the standards of the Public Company        Accounting Oversight Board (United States of America). Those standards require        that we plan and perform the audits to obtain reasonable assurance about        whether        the consolidated financial statements are free of material misstatement.        The        Company is not required to have, nor were we engaged to perform, an audit        of its        internal control over financial reporting. Our audits included consideration        of        internal control over financial reporting as a basis for designing audit        procedures that are appropriate in the circumstances, but not for the purpose        of        expressing an opinion on the effectiveness of the Company’s internal control        over financial reporting. Accordingly, we express no such opinion. An audit        includes examining, on a test basis, evidence supporting the amounts and        disclosures in the consolidated financial statements. An audit also includes        assessing the accounting principles used and significant estimates made by        management, as well as evaluating the overall consolidated financial statement        presentation. We believe that our audits provide a reasonable basis for our        opinion.*

*In        our opinion, the consolidated financial statements referred to above present        fairly, in all material respects, the consolidated financial position of        the        Company as of December 31, 2005 and 2004, and the consolidated results of        its        operations and cash flows for the years then ended in conformity with accounting        principles generally accepted in the United States of America.*

*Kingery        & Crouse, P.A. s/s*

*April        17, 2006 *

*Tampa,        FL*

*2801          WEST BUSCH BOULEVARD, SUITE 200, TAMPA, FLORIDA 33618*

*PHONE:          813.874.1280 ■ FAX: 813.874.1292 ■ *
*WWW.TAMPACPA.COM*

----

**CONSOLIDATED        BALANCE SHEETS                                                                                     **

**US        Dollars in thousands **

|                                                                                                                       |   | **December                  31,**                  |   | **December                  31,**     |
|----------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|--------|---------------------------------------|
|                                                                                                                       |   | **2004**                                           |   | **2005**                              |
|                                                                                                                       |   |                                               |   |                                  |
|  **ASSETS**                                                                                                           |   |                                               |   |                                  |
|                                                                                                                       |   |                                               |   |                                  |
| CURRENT                  ASSETS:                                                                                           |   |                                               |   |                                  |
|                                                                                                                       |   |                                               |   |                                  |
| Cash                  and cash equivalents                                                                                 |   |  263                                          |   | 543                                   |
| Short-term                  bank deposits                                                                                  |   |                        34 |   |                    92            |
| Receivables:                                                                                                               |   |                                               |   |                                  |
| Trade                  (net of allowance for doubtful accountsof                  $ 0.00 as of December 31, 2005 and 2004) |   | 270                                                |   | 496                                   |
| Shareholder                  loan                                                                                          |   |                    55                         |   |                      2 |
| Other                  related party                                                                                       |   |                    32                         |   |                    11            |
| Other                                                                                                                      |   | 217                                                |   |                    91            |
| Inventories                                                                                                                |   | 170                                                |   | 178                                   |
| Prepaid                  expenses and other current assets                                                                 |   |                    66                         |   |                    68            |
|                                                                                                                       |   |                                               |   |                                  |
| Total                  current assets                                                                                      |   |  1,107                                        |   |  1,481                           |
|                                                                                                                       |   |                                               |   |                                  |
| INVESTMENT                  IN AFFILIATE                                                                                   |   | 8                                                  |   | 9                                     |
|                                                                                                                       |   |                                               |   |                                  |
| PROPERTY                  AND EQUIPMENT, NET:                                                                              |   |                                               |   |                                  |
|                                                                                                                       |   |                                               |   |                                  |
| Minibars                                                                                                                   |   | 3,943                                              |   | 4,024                                 |
| Other                  property and equipment                                                                              |   | 74                                                 |   |  85                              |
|                                                                                                                       |   |                                               |   |                                  |
| Total                  property and equipment, net                                                                         |   | 4,017                                              |   | 4,109                                 |
|                                                                                                                       |   |                                               |   |                                  |
| INTANGIBLES:                                                                                                               |   |                                               |   |                                  |
|                                                                                                                       |   |                                               |   |                                  |
| Contract                  rights, net                                                                                      |   | 57                                                 |   | 43                                    |
| Loan                  acquisition costs                                                                                    |   |                    -                          |   | 61                                    |
|                                                                                                                       |   |                                               |   |                                  |
| Total                  intangibles                                                                                         |   | 57                                                 |   |  104                             |
|                                                                                                                       |   |                                               |   |                                  |
| OTHER                  ASSETS                                                                                              |   | 13                                                 |   | 19                                    |
|                                                                                                                       |   |                                               |   |                                  |
| **TOTAL**                                                                                                                  |   | 5,202                                              |   |                     5,722   |

----

**CONSOLIDATED      BALANCE SHEETS                                                                                     **

**US      Dollars in thousands (except share data)**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | **December                31,**     |   | **December                31,** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|--------|---------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | **2004**                            |   | **2005**                        |
| **LIABILITIES                AND SHAREHOLDERS' EQUITY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                |   |                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |   |                            |
| CURRENT                LIABILITIES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                |   |                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |   |                            |
| Short-term                bank credit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 359                                 |   |                   -   |
| Current                maturities of other notes payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | 307                                 |   | 279                             |
| Due                to Bartech Systems International                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 735                                 |   |                  76        |
| Notes                payable to shareholders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 712                                 |   | -                               |
| Trade                payables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 200                                 |   | 281                             |
| Other                accounts payable and accrued expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 221                                 |   | 211                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |   |                            |
| Total                current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | 2,534                               |   | 847                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |   |                            |
| LONG-TERM                LIABILITIES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                |   |                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |   |                            |
| Notes                payable to shareholders, net of current maturities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 611                                 |   | 1,067                           |
| Other                notes payable, net of current maturities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 226                                 |   | 1,215                           |
| Accrued                liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                  13            |   |  19                        |
| Deferred                taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                  48            |   |  11                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |   |                            |
| Total                liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 3,432                               |   | 3,159                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |   |                            |
| MINORITY                INTEREST                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 500                                 |   | 471                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |   |                            |
| SHAREHOLDERS'                EQUITY:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |   |                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |   |                            |
| Share                capital -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                |   |                            |
| Preferred                stock of $ 0.001 par value - Authorized: 5,000,000 shares as of                December 31, 2005 and 2004; Issued and outstanding: 0 shares as of                December 31, 2005 and 2004;Common                stock of $ 0.001 par value - Authorized: 105,000,000 shares as of                December 31, 2005 and 100,000,000 shares as of December 31, 2004;                Issued                and outstanding 30,447,522 shares as of December 31, 2005 and 28,874,880                shares as of December 31, 2004; |   |  29                            |   |  30                        |
| Additional                paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 3,491                               |   | 4,556                           |
| Accumulated                other comprehensive income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |  45                            |   | (71)                            |
| Accumulated                deficit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                   (2,295) |   | (2,423)                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |   |                            |
| Total                shareholder’s equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 1,270                               |   | 2,092                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                |   |                            |
| **TOTAL**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 5,202                               |   | 5,722                           |

----

**CONSOLIDATED      STATEMENTS OF OPERATIONS                                                                            **

**US      Dollars in thousands (except share and per share data)**

|                                                                                                                                                    |   | **Years                ended December 31,** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|
|                                                                                                                                                    |   |                                        |   | **2004** |   | **2005** |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Revenues                                                                                                                                                |   |                                        |   | 1,647 |   | 2,814 |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Costs                of revenues:                                                                                                                       |   |                                        |   |   |   |   |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Depreciation                                                                                                                                            |   |                                        |   |                  (362) |   |  (418) |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Other                                                                                                                                                   |   |                                        |   |   (797) |   |                  (1,174) |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Gross                profit                                                                                                                             |   |                                        |   | 488 |   | 1,222 |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Operating                expenses:                                                                                                                      |   |                                        |   |   |   |   |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Selling                and marketing                                                                                                                    |   |                                        |   |                  (243) |   |  (240) |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| General                and administrative                                                                                                               |   |                                        |   |                  (960) |   |  (975) |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Operating                profit (loss)                                                                                                                  |   |                                        |   |                  (715) |   |                  7 |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Other                income (expense):                                                                                                                  |   |                                        |   |   |   |   |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Interest                and foreign currency translation losses, net                                                                                    |   |                                        |   | (67) |   |  (318) |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Gain                on sales of property and equipment                                                                                                  |   |                                        |   | - |   | 125 |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Other                                                                                                                                                   |   |                                        |   |                  (2) |   |  (3) |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Loss                before provision (benefit) for income taxes                                                                                         |   |                                        |   |                  (784) |   |  (189) |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Provision                (benefit) for income taxes                                                                                                     |   |                                        |   | (11) |   | 27 |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Loss                before equity in earnings of affiliated company and minority interests                in                losses of subsidiaries, net |   |                                        |   |  (795) |   | (162) |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Equity                in earnings of an affiliated company                                                                                              |   |                                        |   |                  8 |   |  1 |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Minority                interests in net losses of subsidiaries, net                                                                                    |   |                                        |   | 55 |   | 33 |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Net                loss                                                                                                                                 |   |                                        |   |  (732) |   |  (128) |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Basic                and diluted net loss per share                                                                                                     |   |                                        |   |                   (0.029)  |   |                  (0.004) |
|                                                                                                                                                    |   |                                        |   |   |   |   |
| Weighted                average number of shares used in computing basic and diluted net                loss per                share                   |   |                                        |   | 25,605,107 |   | 29,781,745 |

----

**STATEMENTS      OF CHANGES IN SHAREHOLDERS' EQUITY                                                                      **

**US      Dollars in thousands (except shares data)**

|                                                    |   | **Number                of****Shares                of Common****Stock**      |   | **Common****Stock**     |   | **Additional                paid-in capital** |   | **Accumulated                other comprehensive income (loss)**  |   | **Accumulated****deficit** |   | **Other                Comprehensive loss**                                               |   | **Total**                                  |
|---------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|-------------------------|--------|-----------------------------------------------|--------|-------------------------------------------------------------------|--------|----------------------------|--------|-------------------------------------------------------------------------------------------|--------|--------------------------------------------|
|                                                    |   |                                                                          |   |                    |   |                                          |   |                                                              |   |                       |   |                                                                                      |   |                                       |
| Balance                as of December 31, 2003          |   | 23,000,000                                                                    |   | 23                      |   | 1,579                                         |   |                       34            |   | (1,563)                    |   |                             - |   |                    73       |
|                                                    |   |                                                                          |   |                    |   |                                          |   |                                                              |   |                       |   |                                                                                      |   |                                       |
| Issuance                of shares                       |   |  4,874,880                                                               |   |                  5 |   | 1,826                                         |   |                     -                         |   | -                          |   |                             - |   | 1,831                                      |
| Issuance                of shares for services          |   |  1,000,000                                                               |   |                  1 |   |                     86    |   |                     -                         |   | -                          |   |                             - |   |                     87 |
| Foreign                currency translation adjustments |   |                           - |   | -                       |   |                     -     |   |                       11            |   | -                          |   |                           11            |   |                     11 |
| Net                loss                                 |   |                           - |   | -                       |   |                     -     |   |                         - |   | (732)                      |   |                        (732)                           |   |  (732)                                |
|                                                    |   |                                                                          |   |                    |   |                                          |   |                                                              |   |                       |   |                                                                                      |   |                                       |
| Total                comprehensive loss                 |   |                                                                          |   |                    |   |                                          |   |                                                              |   |                       |   |                        (721)                           |   |                                       |
|                                                    |   |                                                                          |   |                    |   |                                          |   |                                                              |   |                       |   |                                                                                      |   |                                       |
| Balance                as of December 31, 2004          |   | 28,874,880                                                                    |   | 29                      |   | 3,491                                         |   |                     45                        |   | (2,295)                    |   | -                                                                                         |   | 1,270                                      |

| Issuance                of shares, net of stock issuance costs |   |  1,549,542                                                               |   | 1      |   | 1,050                                      |   |       -     |   | -       |   | -      |   | 1,051  |
|----------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|--------|--------|--------------------------------------------|--------|-------------------------------------------|--------|---------|--------|--------|--------|--------|
| Issuance                of shares for services                 |   |                      23,100                          |   | -      |   |                     15 |   |                     - |   | -       |   | -      |   | 15     |
| Foreign                currency translation adjustments        |   |                           - |   | -      |   |                     -  |   | (116)                                     |   | -       |   | (116)  |   | (116)  |
| Net                loss                                        |   |                           - |   | -      |   |                     -  |   |                    -       |   | (128)   |   | (128)  |   | (128)  |
|                                                           |   |                                                                          |   |   |   |                                       |   |                                      |   |    |   |   |   |   |
| Total                comprehensive loss                        |   |                                                                          |   |   |   |                                       |   |                                      |   |    |   | (244)  |   |   |
|                                                           |   |                                                                          |   |   |   |                                       |   |                                      |   |    |   |   |   |   |
| Balance                as of December 31, 2005                 |   | 30,447,522                                                                    |   | 30     |   | 4,556                                      |   | (71)                                      |   | (2,423) |   |   |   | 2,092  |

----

**CONSOLIDATED      STATEMENTS OF CASH FLOWS                                                                            **

**US        Dollars in thousands **

|                                                                                                                            |   | **Year                  ended December 31,** |
|---------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|
|                                                                                                                            |   |                                         | **2004** |   | **2005** |
| **CASH                  FLOWS FROM OPERATING ACTIVITIES:**                                                                      |   |                                         |   |   |   |
| Net                  loss                                                                                                       |   |                                         | (732) |   | (128) |
| **Adjustments                  to reconcile net loss to net cash provided by (used in) operating                  activities:** |   |                                         |   |   |
| Depreciation                  and amortization                                                                                  |   |                                         | 370 |   | 435 |
| Compensation                  expense resulting from shares granted                                                             |   |                                         | 87 |   | 15 |
| Decrease                  in accrued severance pay, net                                                                         |   |                                         | (2) |   | - |
| Accrued                  interest and linkage difference on loans, net                                                          |   |                                         | (42) |   | 103 |
| Equity                  in earnings of an affiliated company                                                                    |   |                                         | (8) |   | (1) |
| Gain                  on sales of property and equipment                                                                        |   |                                         | - |   | (125) |
| Minority                  interest in net losses of subsidiaries, net                                                           |   |                                         | (55) |   | (27) |
| Provision                  (benefit) for deferred income taxes                                                                  |   |                                         | 23 |   | (32) |
| **Changes                  in assets and liabilities:**                                                                         |   |                                         |   |   |   |
| Inventories                                                                                                                     |   |                                         | (62) |   | (19) |
| Trade                  receivables                                                                                              |   |                                         | (16) |   | (246) |
| Related                  party receivables                                                                                      |   |                                         | (64) |   | 67 |
| Other                  accounts receivable and prepaid and other assets                                                         |   |                                         | (134) |   | 93 |
| Trade                  payables                                                                                                 |   |                                         | 57 |   | 101 |
| Other                  accounts payable and accrued expenses                                                                    |   |                                         | 117 |   | 114 |
|                                                                                                                            |   |                                         |   |   |   |
| Net                  cash provided by (used in) operating activities                                                            |   |                                         | (461) |   | 350 |
|                                                                                                                            |   |                                         |   |   |   |
| **CASH                  FLOWS FROM INVESTING ACTIVITIES:**                                                                      |   |                                         |   |   |   |
|                                                                                                                            |   |                                         |   |   |   |
| Purchases                  of property and equipment                                                                            |   |                                         | (1,308) |   | (1,641) |
| Proceeds                  from sales of property and equipment                                                                  |   |                                         | - |   | 310 |
| Short-term                  bank deposits, net                                                                                  |   |                                         | (14) |   | (58) |
|                                                                                                                            |   |                                         |   |   |   |
| Net                  cash used in investing activities                                                                          |   |                                         | (1,322) |   | (1,389) |
|                                                                                                                            |   |                                         |   |   |   |
| **CASH                  FLOWS FROM FINANCING ACTIVITIES:**                                                                      |   |                                         |   |   |   |
|                                                                                                                            |   |                                         |   |   |   |
| Issuance                  of shares, net                                                                                        |   |                                         | 1,508 |   | 1,051 |
| Issuance                  of shares to minority in subsidiary                                                                   |   |                                         | 322 |   | - |
| Proceeds                  from borrowings under other notes payable                                                             |   |                                         | - |   | 1,315 |
| Cash                  paid for loan acquisition costs                                                                           |   |                                         | - |   | (66) |
| Repayment                  of other notes payable                                                                               |   |                                         | (351) |   | (376) |
| Proceeds                  from (repayments of) shareholder loans                                                                |   |                                         | 458 |   | (300) |
| Short-term                  bank credit, net                                                                                    |   |                                         | (36) |   | (324) |
|                                                                                                                            |   |                                         |   |   |   |
| Net                  cash provided by financing activities                                                                      |   |                                         | 1,901 |   | 1,300 |
|                                                                                                                            |   |                                         |   |   |   |
| Effect                  of exchange rate changes on cash and cash equivalents                                                   |   |                                         | 8 |   | 19 |
|                                                                                                                            |   |                                         |   |   |   |
| Change                  in cash and cash equivalents                                                                            |   |                                         | 126 |   | 280 |
|                                                                                                                            |   |                                         |   |   |   |
| Cash                  and cash equivalents at the beginning of the year                                                         |   |                                         | 137 |   | 263 |
|                                                                                                                            |   |                                         |   |   |   |
| Cash                  and cash equivalents at the end of the year                                                               |   |                                         | 263 |   | 543 |

----

**CONSOLIDATED      STATEMENTS OF CASH FLOWS                                                                            **

**US        Dollars in thousands **

| **Supplemental                    disclosure of non-cash investing and financing activities and                    cash flow                    information:** | **Years                    ended December 31,**                 |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|
|                                                                                                                                                           |                                                            |   |   | **2004** |   | **2005** |
|                                                                                                                                                           |                                                            |   |   |   |   |   |
| (a)                                                                                                                                                            | Non-cash                    investing and financing activities: |   |   |   |   |   |
|                                                                                                                                                           | Purchase                    of property and equipment           |   |   | 735 |   | 76 |
|                                                                                                                                                           |                                                            |   |   |   |   |
| Loans                    from shareholders converted into common shares                                                                                        |                                                            |   | 323 |   | - |
|                                                                                                                                                           |                                                            |   |   |   |   |
| (b)                                                                                                                                                            | Cash                    paid during the year for interest       |   |   | 79 |   | 141 |

----

| **NOTE                  1:-** | **NATURE                  OF OPERATIONS AND BASIS OF                  PRESENTATION** |
|-------------------------------|--------------------------------------------------------------------------------------|

|  Subsidiary                  Name                                                                                                                |  Location                | OwnershipPercentage | Numberof                  Minibars |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|---------------------|------------------------------------|
|                                                                                                                                                  |                          |                |                               |
| HOMI                  Israel Ltd. (fka Bartech Med)                                                                                                   | Israel                        | 100%                | 1,787                              |
| Hotel                  Outsource Services, Inc. (“HOS”)                                                                                   | U.S.A.                        | 70%                 | 2,515                              |
| HOMI                  Europe SARL                                                                                                                     | Europe                        | 100%                | 2,334                              |
|                                    HOMI South Africa (Proprietary) Limited | South                  Africa | 60%                 | 868                                |

----

| **NOTE                  2:-** | **SIGNIFICANT                  ACCOUNTING POLICIES** |
|-------------------------------|------------------------------------------------------|

----

| Description                                         | Percentages              |
|-----------------------------------------------------|--------------------------|
|                                                |                     |
| Minibars                                            | 10                       |
| Computers                  and electronic equipment | 15                  - 33 |
| Office                  furniture and equipment     | 7                        |

----

----

----

|   |                                                   | December                  31, |
|--------|--------------------------------------------------------|-------------------------------|
|   |                                                   |                          |
|   | Exchange                  Rates                        | 2003                          | 2004 | 2005 |
|   |                                                   |                          |   |   |
|   | New                  Israeli shekel (NIS)              | $                  0.228      | $                  0.232 | $                  0.217 |
|   | EURO                  (EU)                             | $                  1.264      | $                  1.364 | $                  1.183 |
|   | South                  African Rand (Sar)              | $                  0.152      | $                  0.178 | $                  0.158 |
|   |                                                   |                          |   |   |
|   | Percentage                  Change in Rate of Exchange |                          |   |
|   |                                                   |                          |   |   |
|   | NIS                                                    | 8.1%                          | 1.7% | (6.4%) |
|   | EU                                                     | 20.5%                         | 7.9% | (13.2%) |
|   | Sar                                                    | 29.9%                         | 17.1% | (11.2%) |

----

**NOTE        3:-**
**        PROPERTY AND EQUIPMENT**

|                                                | December                  31, |   | December                  31, |
|-----------------------------------------------------|-------------------------------|--------|-------------------------------|
|                                                | 2004                          |   | 2005                          |
| Cost                                                |                          |   |                          |
| Minibars                                            | 4,753                         |   | 5,139                         |
| Vehicle                                             | 27                            |   | 27                            |
| Computers                  and electronic equipment | 42                            |   | 61                            |
| Office                  furniture and equipment     | 54                            |   | 76                            |
|                                                |                          |   |                          |
| Total                  cost                         | 4,876                         |   | 5,303                         |
|                                                |                          |   |                          |
| Accumulated                  depreciation:          |                          |   |                          |
| Minibars                                            | 810                           |   | 1,115                         |
| Vehicle                                             | 4                             |   | 10                            |
| Computers                  and electronic equipment | 28                            |   | 43                            |
| Office                  furniture and equipment     | 17                            |   | 26                            |
|                                                |                          |   |                          |
| Total                  accumulated depreciation     | 859                           |   | 1,194                         |
|                                                |                          |   |                          |
| Property                  and equipment, net        | 4,017                         |   | 4,109                         |

| **NOTE                  4:-** | **SHORT-TERM                  BANK CREDIT** |
|-------------------------------|---------------------------------------------|

----

| **NOTE                  5:-** | **OTHER                  NOTES PAYABLE** |
|-------------------------------|------------------------------------------|

| Other                  notes payable are comprised of the following:                                                           |
|-------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                | **Annual****interest                  rates** |   | **December                  31,****2004** |   | **December                  31,****2005** |
| Notes                  payable to banks:                                                                                            |   |   |   |   |   |
| In                  NIS (payable in equal monthlyinstallments                  of $6,000)                                           |                    8% |   |                    78 |   |                         6 |
| In                  US dollars (2)                                                                                                  | 10% |   | 330 |   |                     220 |
| In                  US dollars or linked thereto                                                                                    | Libor                  +2.25% |   |                    40 |   |                       - |
| In                  Euro                                                                                                            |                     9.7% |   |                    85 |   |                       - |
| In                  Rand (payable over a period ofthree                  years with final payment duein                  June 2008) |                    10.8% |   |                     - |   |                      211 |
|                                                                                                                                |   |   |   |   |   |
| Total                  notes payable to banks                                                                                       |   |   | 533 |   |                     437 |
|                                                                                                                                |   |   |   |   |   |
| Notes                  payable to others (1)                                                                                        | 11.67% |   |                    - |   | 1,057 |
|                                                                                                                                |   |   |   |   |   |
| Total                                                                                                                               |   |   | 533 |   | 1,494 |
|                                                                                                                                |   |   |   |   |   |
| Less                  - current maturities                                                                                          |   |   | (307) |   | (279) |
|                                                                                                                                |   |   |   |   |   |
| Other                  notes payable                                                                                                |   |   | 226 |   | 1,215 |

|   | (1)    | In                  March and June 2005 the Company received from Horizon Challenges                  Investment Company Ltd. (“Horizon”) loans in the total amount of $1.1                  million. The loans were provided pursuant to an amended financing                  agreement dated March 1, 2005 (the “Agreement”). Pursuant to the                  Agreement, the amount of financing which the parties had originally                  agreed                  would be provided by Horizon was reduced from $10 million to $1.1                  million,                  after Horizon notified the Company that it did not have adequate                  funds to                  meet the initial commitment. As a result of this matter, the potential                  option grant to Horizon for the purchase of the Company’s shares was                  cancelled. The loans bear interest at a fixed rate of11.67% and                  are to be                  repaid in monthly principal and interest |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | installments                  of approximately $15,800 for a period of nine years. The loans                  are secured                  by a lien on all minibars purchased with the proceeds of such loans,                  a                  security interest and assignment of a portion of the Company’s monthly                  revenues from such minibars in the amount required to pay each                  month’s                  principal plus interest on the indebtedness, and any sales or insurance                  proceeds received from the disposition of such minibars.                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   |

|   | (2) | The                  note requires monthly principal and interest payments of approximately                  $11,000 through December 1, 2007, at which time any remaining principal                  and interest is due. The loan is secured by funds deposited in                  such bank                  by a shareholder, as well as a first security position in the minibars                  purchased with the proceeds of the loan and all accounts and contract                  rights arising from the agreement with the hotel in which the minibars                  are                  located. In the event the Company defaults on the loan, the shareholder                  may require the bank to assign him its rights and security interests                  in                  the loan. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Years                  EndingDecember                  31, |   | Amounts |
|------------------------------------------------------------|--------|---------|
|                                                       |   |    |
| 2006                                                       |   | 279     |
| 2007                                                       |   | 290     |
| 2008                                                       |   | 143     |
| 2009                                                       |   | 113     |
| 2010                                                       |   | 127     |
| Thereafter                                                 |   | 542     |
|                                                       |   |    |
| Total                                                      |   | 1,494   |

| **NOTE                  6:-** | **GAIN                  ON SALES OF PROPERTY AND                  EQUIPMENT** |
|-------------------------------|-------------------------------------------------------------------------------|

| **NOTE                  7:-** | **COMMITMENTS** |
|-------------------------------|-----------------|

----

| **NOTE                  8:-** | **SHAREHOLDERS’                  EQUITY** |
|-------------------------------|-------------------------------------------------|

|  2004                  Equity Issuances |   |   Number                  of shares |   |  Increase                  in Common Stock and Additional Paid-In Capital |   | Stock                  Based Compensation |
|----------------------------------------------|--------|-----------------------------------------------|--------|--------------------------------------------------------------------------------|--------|-------------------------------------------|
|                                         |   |                                          |   |                                                                           |   |                                      |
| For                  services                | (1)    | 1,000,000                                     |   | 87                                                                             |   | 87                                        |
| For                  debt conversion         | (2)    | 828,000                                       |   | 414                                                                            |   | -                                         |
| For                  cash                    |   | 260,000                                       |   | 110                                                                            |   | -                                         |
| For                  debt conversion         | (3)    | 1,818,182                                     |   | 580                                                                            |   | -                                         |
| For                  cash                    | (3)    | 1,016,176                                     |   | 327                                                                            |   | -                                         |
| For                  debt conversion         | (4)    | 952,522                                       |   | 400                                                                            |   | -                                         |
|                                         |   |                                          |   |                                                                           |   |                                      |
| Totals                                       |   | 5,874,880                                     |   | 1,918                                                                          |   | 87                                        |

| (1)   | In                February 2004 the board of directors approved a series of agreements                with                shareholders by which in return for services rendered to the Company                in                2003 and 2004, they were issued 1,000,000 shares at no consideration.                $213                and $87 were recorded as stock based expenses in 2003 and 2004,                respectively. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)   | In                May 2004 the Company approved the conversion of loans extended to                the                Company by shareholders and others amounting to $414 into 828,000                shares                of restricted Company common stock. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3)   | In                March 2004 two shareholders extended to the Company loans amounting                to                $600 for the purpose of purchase of additional minibars. These loans                were                converted into share capital as part of the rights offering the Company                held in July 2004. Pursuant to such offering, on July 10, 2004, the                Company commenced an offering to its existing shareholders, pursuant                to                which each shareholder was offered the right to purchase one share                of the                Company’s restricted common stock for every 5.566 shares of common stock                held as of such date. A total of 4,500,180 shares were offered. The                purchase price was $0.33 per share. This offering expired on August                12,                2004 and the Company raised $936 including the conversion of the                aforementioned stockholder loans, and issued 2,834,358 shares of                common                stock. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4)   | In                September 2004 a shareholder lent the Company $150. In October 2004                the                Company converted this loan, plus a previous loan of $250 into 952,522                shares of common stock. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  2005                  Equity Issuances    |   |    Number                  of shares |   |  Increase                  in Common Stock and Additional Paid-In Capital |   | Stock                  Based Compensation |
|-------------------------------------------------|--------|-----------------------------------------------------|--------|--------------------------------------------------------------------------------|--------|-------------------------------------------|
|                                            |   |                                                |   |                                                                           |   |                                      |
| Issuance                  of stock for cash     |   | 226,771                                             |   | 173                                                                            |   | -                                         |
| Issuance                  of stock for services |   | 23,100                                              |   | 15                                                                             |   | 15                                        |
| Issuance                  of stock for cash     |   | 861,540                                             |   | 560                                                                            |   | -                                         |
| Issuance                  of stock for cash     |   | 182,000                                             |   | 137                                                                            |   | -                                         |
| Issuance                  of stock for cash     |   | 279,231                                             |   | 181                                                                            |   | -                                         |
|                                            |   |                                                |   |                                                                           |   |                                      |
| Totals                                          |   | 1,572,642                                           |   | 1,065                                                                          |   | 15                                        |

| **NOTE                  9:-** | **CUSTOMERS                  AND GEOGRAPHIC INFORMATION** |
|-------------------------------|-----------------------------------------------------------|

|                        | Years                  ended December 31, |
|-----------------------------|-------------------------------------------|
|                        |                                      |   | 2004 |   | 2005 |
|                        |                                      |   |   |   |   |
| Customer                  A |                                      |   | 12.8% |   | 8.9% |
| Customer                  B |                                      |   | 9.2% |   | 5.8% |
| Customer                  C |                                      |   | - |   | 11.4% |
| Customer                  D |                                      |   | 8.1% |   | 8.9% |
| Customer                  E |                                      |   | 21.2% |   | 13.4% |
| Customer                  F |                                      |   | 11.4% |   | 6.2% |

----

|                          | Years                  ended December 31, |
|-------------------------------|-------------------------------------------|
|                          |                                      |   | 2004 |   | 2005 |
|                          |                                      |   |   |   |   |
| Israel                        |                                      |   | 26% |   | 20% |
| South                  Africa |                                      |   | 22% |   | 16% |
| USA                           |                                      |   | 42% |   | 41% |
| Europe                        |                                      |   | 10% |   | 23% |
| Total                         |                                      |   | 100% |   | 100% |

| **NOTE                  10:-** | **INCOME                  TAXES** |
|--------------------------------|-----------------------------------|

|                                                                       | December                  31, |   | December                  31, |
|----------------------------------------------------------------------------|-------------------------------|--------|-------------------------------|
|                                                                       | 2004                          |   | 2005                          |
|                                                                       |                          |   |                          |
| Operating                  loss carry forwards                             | 512                           |   | 864                           |
| Temporary                  differences in regard to property and equipment | (230)                         |   | (163)                         |
|                                                                       |                          |   |                          |
| Net                  deferred tax asset before valuation allowance         | 282                           |   | 701                           |
| Valuation                  allowance                                       | (330)                         |   | (712)                         |
|                                                                       |                          |   |                          |
| Net                  non-current deferred income tax liability (foreign)   | (48)                          |   | (11)                          |

----

| Subsidiary                                                            |   | Net                  Operating Loss Carryforward |   | ExpiringIn                  Various Years Through |
|-----------------------------------------------------------------------|--------|--------------------------------------------------|--------|---------------------------------------------------|
|                                                                  |   |                                             |   |                                              |
| Hotel                  Outsource Management International, Inc.       |   | 1,048                                            |   | 2025                                              |
| HOMI                  Israel Ltd.                                     |   | 605                                              |   | None                                              |
| Hotel                  Outsource Services, Inc.                       |   | 608                                              |   | 2025                                              |
| HOMI                  Europe SARL                                     |   | 72                                               |   | None                                              |
| HOMI                  South Africa (Proprietary) Limited South Africa |   | 227                                              |   | None                                              |
| HOMI                  - Malta                                         |   | 5                                                |   | None                                              |
|                                                                  |   |                                             |   |                                              |
| Total                                                                 |   | 2,565                                            |   |                                              |

|                            | Year                  ended December 31, |
|---------------------------------|------------------------------------------|
|                            |                                     |   | 2004 |   | 2005 |
|                            |                                     |   |   |   |   |
| Current                  taxes  |                                     |   | - |   | (5) |
| Deferred                  taxes |                                     |   | (11) |   | 32 |
|                            |                                     |   |   |   |   |
|                            |                                     |   | (11) |   | 27 |

| Israel                        |   |   | 13     |   | 15     |
|-------------------------------|--------|--------|--------|--------|--------|
| South                  Africa |   |   | (9)    |   | 112    |
| USA                           |   |   | 717    |   | 91     |
| Europe                        |   |   | 63     |   | (29)   |
|                          |   |   |   |   |   |
| Total                         |   |   | 784    |   | 189    |

| **NOTE                  11:-** | **NOTES                  PAYABLE TO SHAREHOLDERS** |
|--------------------------------|----------------------------------------------------|

----

| **NOTE                  12:-** | **OTHER                  RELATED PARTY TRANSACTIONS** |
|--------------------------------|-------------------------------------------------------|

|  Description                                              |   |  2004 |   | 2005   |
|----------------------------------------------------------------|--------|------------|--------|--------|
|                                                           |   |       |   |   |
| Rent                  and office services - see note 7         |   | 37         |   | -      |
| Directors’                  fees and liability insurance |   | -          |   | 45     |
| Consulting                  fees                               |   | 158        |   | 242    |
|                                                           |   |       |   |   |
| Totals                                                         |   | 195        |   | 287    |

| **NOTE                  13:-** | **OTHER                  SUBSEQUENT EVENTS** |
|--------------------------------|----------------------------------------------|

----