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

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

----

----

EXPLANATORY NOTE

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|                                                         | Page   |
|--------------------------------------------------------------|--------|
|                                                         |   |
| Report      of Independent Registered Public Accounting Firm | 2      |
|                                                         |   |
| Consolidated      Balance Sheets                             | 3-4    |
|                                                         |   |
| Consolidated      Statements of Operations                   | 5      |
|                                                         |   |
| Statement      of Changes in Shareholders' Equity            | 6      |
|                                                         |   |
| Consolidated      Statements of Cash Flows                   | 7-8    |
|                                                         |   |
| Notes      to the Consolidated Financial Statements          | 9-27   |

----

----

|                                                                                                            |   |   | December      31, |
|-----------------------------------------------------------------------------------------------------------------|--------|--------|-------------------|
|                                                                                                            | Note   |   | 2008              |   | 2007 |
|                                                                                                            |   |   |              |   |   |
|  ASSETS                                                                                                    |   |   |              |   |   |
|                                                                                                            |   |   |              |   |   |
| CURRENT      ASSETS:                                                                                            |   |   |              |   |   |
|                                                                                                            |   |   |              |   |   |
| Cash      and cash equivalents                                                                                  |   |   | 770               |   | 2,344 |
| Short-term      bank deposits                                                                                   |   |   | 27                |   | 5 |
| Trade      receivables (net of allowance for doubtful accounts of $ zero as of      December 31, 2008 and 2007) |   |   | 719               |   | 791 |
| Other      accounts receivable                                                                                  | 3      |   | 249               |   | 125 |
| Inventories                                                                                                     |   |   | 260               |   | 251 |
|                                                                                                            |   |   |              |   |   |
| TOTAL      CURRENT ASSETS                                                                                       |   |   | 2,025             |   | 3,516 |
|                                                                                                            |   |   |              |   |   |
| LONG-TERM      INVESTMENTS:                                                                                     |   |   |              |   |   |
|                                                                                                            |   |   |              |   |   |
| Severance      pay fund                                                                                         |   |   | 28                |   | 33 |
|                                                                                                            |   |   |              |   |   |
|                                                                                                            |   |   |              |   |   |
|                                                                                                            |   |   |              |   |   |
| PROPERTY      AND EQUIPMENT, NET:                                                                               | 4      |   |              |   |   |
|                                                                                                            |   |   |              |   |   |
| Minibars      and related equipment                                                                             |   |   | 5,320             |   | 4,541 |
| Other      property and equipment                                                                               |   |   | 109               |   | 56 |
|                                                                                                            |   |   |              |   |   |
|                                                                                                            |   |   | 5,429             |   | 4,597 |
|                                                                                                            |   |   |              |   |   |
| OTHER      ASSETS:                                                                                              | 5      |   |              |   |   |
|                                                                                                            |   |   |              |   |   |
| Deferred      expenses, net                                                                                     |   |   | 67                |   | 90 |
| Intangible      assets                                                                                          |   |   | 73                |   | 56 |
|                                                                                                            |   |   |              |   |   |
| TOTAL      OTHER ASSETS                                                                                         |   |   |  140         |   | 146 |
|                                                                                                            |   |   |              |   |   |
| TOTAL                                                                                                           |   |   |  7,622       |   | 8,292 |

----

|                                                                                                                                                                                                                                                                                                        |   |   | December      31, |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------|
|                                                                                                                                                                                                                                                                                                        | Note   |   | 2008              |   | 2007 |
|  LIABILITIES      AND SHAREHOLDERS' EQUITY                                                                                                                                                                                                                                                             |   |   |              |   |   |
|                                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| CURRENT      LIABILITIES:                                                                                                                                                                                                                                                                                   |   |   |              |   |   |
|                                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| Short      term bank credits                                                                                                                                                                                                                                                                                |   |   | 4                 |   | - |
| Loans      from shareholders                                                                                                                                                                                                                                                                                | 6      |   | 809               |   | - |
| Current      maturities of convertible notes                                                                                                                                                                                                                                                                | 7      |   | 219               |   | - |
| Current      maturities of long-term loans                                                                                                                                                                                                                                                                  | 8      |   | 113               |   | 292 |
| Trade      payables                                                                                                                                                                                                                                                                                         |   |   | 1,110             |   | 374 |
| Accrued      expenses and other current liabilities                                                                                                                                                                                                                                                         | 9      |   | 292               |   | 299 |
|                                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| TOTAL      CURRENT LIABILITIES                                                                                                                                                                                                                                                                              |   |   | 2,547             |   | 965 |
|                                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| LONG-TERM      LIABILITIES:                                                                                                                                                                                                                                                                                 |   |   |              |   |   |
|                                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| Long-term      loans, net of current maturities                                                                                                                                                                                                                                                             | 8      |   | 669               |   | 785 |
| Convertible      notes                                                                                                                                                                                                                                                                                      | 7      |   | 260               |   | 494 |
| Accrued      severance pay                                                                                                                                                                                                                                                                                  |   |   | 44                |   | 45 |
| Deferred      taxes                                                                                                                                                                                                                                                                                         | 15     |   | 25                |   | 21 |
|                                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| TOTAL      LONG-TERM LIABILITIES                                                                                                                                                                                                                                                                            |   |   | 998               |   | 1,345 |
|                                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| COMMITMENTS,      CONTINGENT LIABILITIES AND LIENS                                                                                                                                                                                                                                                          | 10     |   |              |   |   |
|                                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| MINORITY      INTEREST                                                                                                                                                                                                                                                                                      |   |   | -                 |   | (26) |
|                                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| SHAREHOLDERS'      EQUITY:                                                                                                                                                                                                                                                                                  | 11     |   |              |   |   |
|                                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| Share      capital -                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| Preferred      stock of $ 0.001 par value –5,000,000      shares  Authorized; Zeroshares  issued      and outstanding;Common      stock of $ 0.001 par value –    105,000,000      shares Authorized; 41,122,078 shares issuedandoutstanding; |   |   | 41                |   | 41 |
| Additional      paid-in capital                                                                                                                                                                                                                                                                             |   |   | 8,048             |   | 8,048 |
| Accumulated      other comprehensive income                                                                                                                                                                                                                                                                 |   |   | 238               |   | 195 |
| Accumulated      deficit                                                                                                                                                                                                                                                                                    |   |   | (4,250)           |   | (2,276) |
|                                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| TOTAL      SHAREHOLDERS' EQUITY                                                                                                                                                                                                                                                                             |   |   | 4,077             |   | 6,008 |
|                                                                                                                                                                                                                                                                                                        |   |   |              |   |   |
| TOTAL                                                                                                                                                                                                                                                                                                       |   |   | 7,622             |   | 8,292 |

----

|                                                                                                                             |   | Year      ended December 31, |
|----------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|
|                                                                                                                             | Note   |                         | 2008 |   | 2007 |
|                                                                                                                             |   |                         |   |   |   |
| Revenues                                                                                                                         | 12     |                         | 3,700 |   | 3,775 |
|                                                                                                                             |   |                         |   |   |   |
| Cost      of revenues:                                                                                                           |   |                         |   |   |   |
|                                                                                                                             |   |                         |   |   |   |
|     Depreciation                                                                                             |   |                         | (599) |   | (607) |
|                                                                                                                             |   |                         |   |   |   |
|     Other                                                                                                    |   |                         | (1,760) |   | (1,606) |
|                                                                                                                             |   |                         |   |   |   |
| Gross      profit                                                                                                                |   |                         | 1,341 |   | 1,562 |
|                                                                                                                             |   |                         |   |   |   |
| Operating      expenses:                                                                                                         |   |                         |   |   |   |
|                                                                                                                             |   |                         |   |   |   |
|      Research      and Development                                                                      |   |                         | (180) |   | (134) |
|                                                                                                                             |   |                         |   |   |   |
|       Selling      and marketing                                                                   |   |                         | (460) |   | (296) |
|                                                                                                                             |   |                         |   |   |   |
|      General      and administrative                                                                    |   |                         | (1,987) |   | (1,410) |
|                                                                                                                             |   |                         |   |   |   |
| Loss      before financial expenses and other income, net                                                                        |   |                         | (1,286) |   | (278) |
|                                                                                                                             |   |                         |   |   |   |
| Financial      expenses, net                                                                                                     | 13     |                         |         (680) |   |           - |
|                                                                                                                             |   |                         |   |   |   |
| Other      income, net                                                                                                           | 14     |                         | 6 |   | 752 |
|                                                                                                                             |   |                         |   |   |   |
| Income      (loss) before taxes on income                                                                                        |   |                         | (1,960) |   | 474 |
|                                                                                                                             |   |                         |   |   |   |
|  Taxes      on income                                                                                                       | 15     |                         | (14) |   | (36) |
|                                                                                                                             |   |                         |   |   |   |
| Income      (loss) before equity in earnings of an affiliated company and minority      interests in losses of subsidiaries, net |   |                         | (1,974) |   | 438 |
|                                                                                                                             |   |                         |   |   |   |
| Minority      interest in losses of subsidiaries, net                                                                            |   |                         | - |   | 12 |
|                                                                                                                             |   |                         |   |   |   |
| Net      income (loss)                                                                                                           |   |                         | (1,974) |   | 450 |
|                                                                                                                             |   |                         |   |   |   |
|                                                                                                                             |   |                         |   |   |   |
| Basic      and diluted net income (loss) per share                                                                               |   |                         |               (0.048) |   |                   0.011 |
|                                                                                                                             |   |                         |   |   |   |
| Weighted      average number of shares used in computing basic and diluted net income      (loss) per share                      |   |                         |   41,122,078 |   |     40,361,891 |

----

|                                                                                                                                                    |   | Number      ofShares      of CommonStock |   | Common      Stock Par Value |   | Additional      paid-in capital |   | Accumulated      other comprehensive income |   | Accumulateddeficit |   | Other      Comprehensive income (loss)                                                                        |   | Total                                                   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|-----------------------------|--------|---------------------------------|--------|---------------------------------------------|--------|--------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|
| Balance      as of December 31, 2006                                                                                                                    |   | 39,967,937                               |   | 40                          |   | 7,585                           |   | 52                                          |   | (2,726)            |   |                   - |   | 4,951                                                   |
|                                                                                                                                                    |   |                                     |   |                        |   |                            |   |                                        |   |               |   |                                                                                                          |   |                                                    |
| Issuance      of shares (see also Note 11)                                                                                                              |   | 1,154,141                                |   | 1                           |   | 463                             |   | -                                           |   | -                  |   | -                                                                                                             |   | 463                                                     |
|   Foreign      currency      translation               adjustments |   | -                                        |   | -                           |   | -                               |   | 143                                         |   | -                  |   | 143                                                                                                           |   | 143                                                     |
|   Net      income                                                                                                                             |   | -                                        |   | -                           |   | -                               |   | -                                           |   | 450                |   | 450                                                                                                           |   | 450                                                     |
|                                                                                                                                                    |   |                                     |   |                        |   |                            |   |                                        |   |               |   |                                                                                                          |   |                                                    |
| Total      comprehensive income                                                                                                                         |   |                                     |   |                        |   |                            |   |                                        |   |               |   | 593                                                                                                           |   |                                                    |
|                                                                                                                                                    |   |                                     |   |                        |   |                            |   |                                        |   |               |   |                                                                                                          |   |                                                    |
| Balance      as of December 31, 2007                                                                                                                    |   | 41,122,078                               |   | 41                          |   | 8,048                           |   | 195                                         |   | (2,276)            |   | -                                                                                                             |   | 6,008                                                   |
|                                                                                                                                                    |   |                                     |   |                        |   |                            |   |                                        |   |               |   |                                                                                                          |   |                                                    |
| Foreign      currency translation adjustments                                                                                                           |   | -                                        |   | -                           |   |  -                         |   | 43                                          |   | -                  |   | 43                                                                                                            |   | 43                                                      |
|   Net      loss                                                                                                                               |   | -                                        |   | -                           |   | -                               |   | -                                           |   | (1,974)            |   | (1,974)                                                                                                       |   |         (1,974) |
|                                                                                                                                                    |   |                                     |   |                        |   |                            |   |                                        |   |               |   |                                                                                                          |   |                                                    |
| Total      comprehensive loss                                                                                                                           |   |                                     |   |                        |   |                            |   |                                        |   |               |   |               (1,931)                   |   |                                                    |
|                                                                                                                                                    |   |                                     |   |                        |   |                            |   |                                        |   |               |   |                                                                                                          |   |                                                    |
| Balance      as of December 31, 2008                                                                                                                    |   | 41,122,078                               |   | 41                          |   |  8,048                     |   | 238                                         |   |  (4,250)      |   |                                                                                                          |   | 4,077                                                   |

----

|                                                                                               | Year      ended December 31, |
|----------------------------------------------------------------------------------------------------|------------------------------|
|                                                                                               |                         |   | 2008 |   | 2007 |
| CASH      FLOWS FROM OPERATING ACTIVITIES:                                                         |                         |   |   |   |   |
| Net      income (loss)                                                                             |                         |   | (1,974) |   |              450 |
| Adjustments      to reconcile net income (loss) to net cash provided by operating      activities: |                         |   |   |   |
| Gain      on sale of investment                                                                    |                         |   | - |   | (275) |
| Depreciation      and amortization                                                                 |                         |   | 734 |   | 641 |
| Share-based      compensation                                                                      |                         |   | - |   | 15 |
| Increase      in accrued severance pay, net                                                        |                         |   | 4 |   | 4 |
| Accrued      interest and linkage difference on loans, net                                         |                         |   | - |   | (2) |
| Interest      and linkage differences in regard to shareholders and      subsidiaries              |                         |   | 409 |   | 18 |
| Equity      loss  from an affiliated  company                                  |                         |   | 30 |   | - |
| Gain      on sale of property and equipment                                                        |                         |   | - |   | (2) |
| Minority      interest in losses of subsidiaries, net                                              |                         |   | - |   | (12) |
| Provision      for deferred income taxes                                                           |                         |   | 17 |   | 10 |
| Other      income                                                                                  |                         |   | - |   | (472) |
| Changes      in assets and liabilities:                                                            |                         |   |   |   |   |
| Decrease      (increase) in inventories                                                            |                         |   | (25) |   | 7 |
| Decrease      (increase) in trade receivables                                                      |                         |   |              16 |   | (227) |
| Increase      in related parties                                                                   |                         |   | (14) |   | - |
| Decrease      (increase) in other accounts receivable                                              |                         |   | (163) |   | 10 |
| Increase      in trade payables                                                                    |                         |   |            236 |   | 53 |
| Increase      (decrease) in accrued expenses and other current    liabilities                      |                         |   |              13 |   | (191) |
|                                                                                               |                         |   |   |   |   |
| Net      cash provided by  (used in) operating activities                                |                         |   | (717) |   | 27 |
|                                                                                               |                         |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:                                                         |                         |   |   |   |   |
| Proceeds      from sale of shares in an affiliate                                                  |                         |   | - |   |   2,353 |
| Purchases      of property and equipment                                                           |                         |   |       (1,354) |   |  (640) |
| Proceeds      from sales of property and equipment                                                 |                         |   |              82 |   | 11 |
| Short-term      bank deposits, net                                                                 |                         |   |           (22) |   | 13 |
| Acquisition      of intangibles                                                                    |                         |   |           (17) |   | (30) |
| Acquisition      of a newly consolidated company  (Appendix A)                           |                         |   | - |   |           16 |
| Acquisition      of a minority interest in a subsidiary                                            |                         |   | (73) |   | - |
|                                                                                               |                         |   |   |   |   |
| Net      cash provided by (used in) investing activities                                           |                         |   | (1,384) |   |    1,723 |
|                                                                                               |                         |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:                                                         |                         |   |   |   |   |
| Proceeds      (repayments) of long-term loans from shareholders, net                               |                         |   |            685 |   | (5) |
| Repayments      of long-term loans from banks and others                                           |                         |   | (119) |   | (310) |
| Short-term      bank credits                                                                       |                         |   | 4 |   | - |
| Proceeds      from issuance of convertible notes, net of deferred    expenses                      |                         |   | - |   | 338 |
| Dividend      from an affiliated company                                                           |                         |   |               - |   | 6 |
| Issue      of shares, net                                                                          |                         |   |                 - |   | 1 |
|                                                                                               |                         |   |   |   |   |
| Net      cash provided by financing activities                                                     |                         |   |            570 |   | 30 |
|                                                                                               |                         |   |   |   |   |
| Effect      of exchange rate changes on cash and cash equivalents                                  |                         |   |             (43) |   | (45) |
| Increase      (decrease) in cash and cash equivalents                                              |                         |   | (1,574) |   | 1,735 |
| Cash      and cash equivalents at the beginning of the year                                        |                         |   |         2,344 |   | 609 |
| Cash      and cash equivalents at the end of the year                                              |                         |   |            770 |   | 2,344 |

----

| Appendix      A -                                             |                                                            |
|---------------------------------------------------------------|-----------------------------------------------------------------|
|   Acquisition      of a newly consolidated company: | Year      ended December 31,                                    |
|                                                          |                                                            |   |   | 2008 |   | 2007 |
|                                                          | Working      capital, net (excluding cash and cash equivalents) |   |   | - |   | 32 |
|                                                          | Excess      cost attributed to fixed assets                     |   |   | - |   | (16) |
|                                                          |                                                            |   |   | - |   | 16 |

| Appendix      B -                                                                                           |                                                                                                                                     |
|-------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|
| Supplemental      disclosure of non-cash investing and financing activities and cash flow      information: | Year      ended December 31,                                                                                                             |
|                                                                                                        |                                                                                                                                     |   |   | 2008 |   | 2007 |
|                                                                                                        |   Non-cash      investing and financing activities:                                                                            |   |   |   |   |   |
|                                                                                                        |                                                                                                                                     |   |   |   |   |   |
|                                                                                                        |    Acquisition      of property and equipment on short-term credit                                                        |   |   | 702 |   |            58 |
|                                                                                                        |                                                                                                                                     |   |   |   |   |
|                                                                                                        |   Prepayments      in regard of property and equipment                                                                         |   |   |            42 |   |            - |
|                                                                                                        |                                                                                                                                     |   |   |   |   |
|                                                                                                        |   Cash      paid during the year for interest                                                                                  |   |   |         122 |   | 98 |
|                                                                                                        |                                                                                                                                     |   |   |   |   |   |
|    Cash      paid during the period for income taxes                                         |                                                                                                                                     |   | 35 |   | 48 |
|                                                                                                        |   Conversion      of accounts payable into share capital                                                                       |   |   | - |   | 77 |
|                                                                                                        |                                                                                                                                     |   |   |   |   |   |
|                                                                                                        |                                                                                                                                     |   |   |   |   |   |
|                                                                                                        |   Investment      in shares of an affiliate in exchange for shares issued by  the      Company net of issue expenses |   |   | - |   | 371 |
|                                                                                                        |                                                                                                                                     |   |   |   |   |   |

----

| a.   | Hotel      Outsource Management International, Inc. ("HOMI") was incorporated in      Delaware on November 9, 2000. HOMI and its subsidiaries, as identified in      Note 2c below, are engaged in the distribution, marketing and operation of      computerized minibars in hotels located in the United States, Europe,      Israel, Australia and South Africa. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        b.  | During      2006, the Company commenced its own research and development program aimed      at the development of a new range of products. The HOMI® 336 (the system),      a novel, computerized minibar system designed to increase the accuracy of      the automatic billing and reduce the cost of operating the minibars.      Subsequently, during the second half of 2007, the Company entered the      production phase of the system. The first pilot installation of the system      was completed in early 2008. Additional installations have been completed      since that time and the Company continues to manufacture the system for      scheduled installations. Further, the HOMI® 330 system, an additional new      range product, is currently in the final stages of      development. |
|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | On      February 13, 2007, HOMI and several of its subsidiaries entered into a      series of agreements with BSI and one of its subsidiaries, pursuant to      which the parties settled and resolved all outstanding disputes between      them. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | On December 28, 2007, HOMI Israel, which is a      wholly owned subsidiary of HOMI and which indirectly owned 60% of HOMI SA,      entered into an agreement ("the Agreement") with Ice Maiden International      Ltd. and its beneficial owners ("Ice Maiden"), which owned the remaining      40% of HOMI SA. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|        e.  | Investment      in Homi (Operation 99) Ltd. |
|----------------------|---------------------------------------------|

| f.   | At      December 31, 2008, we had $797 in cash, including short term deposits. For      the year ended December 31, 2008, we had a net loss of $1,974. Management      believes that the $603 raised in HOMI’s January 2009 rights offering, the      conversion of  $814 in outstanding loans, and commitments from      shareholders to lend HOMI a total of $350 by  May 15, 2009, as      well as the effect of reducing corporate expenses, will provide sufficient      cash for the ongoing operations of the company for the next twelve      months.  In addition, HOMI intends to raise funds within the      next six months and adopt a new financing plan which will provide required      funds for the company’s growth. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a. | Use      of estimates: |
|--------|----|------------------------|

----

|   | b. | Financial      statements in U.S. dollars: |
|--------|----|--------------------------------------------|

|   | c. | Principles      of consolidation: |
|--------|----|-----------------------------------|

|                                             |              |                      | Number      of Operational Minibars |
|--------------------------------------------------|-------------------|---------------------------|-------------------------------------|
|  Subsidiary Name                            |  Area        | Ownership      Percentage |  31.12.2008                    |   |  31.12.2007 |
| HOMI      Israel Ltd.                            | Israel            | 100%                      | 2,638                               |   | 1,611 |
| HOMI      USA, Inc. (1)                          | U.S.A.            | 100%                      | 2,829                               |   | 2,610 |
| HOMI      Europe Sarl (2)                        | ROW               | 100%                      | 2,758                               |   | 2,580 |
| HOMI      South Africa (Proprietary) Limited (3) | South      Africa |  100%                |  483                           |   |     858 |
| HOMI      (Operation 99) Ltd. (4)                | Israel            | 100%                      |    167               |   |    167 |
|                                             |              |                      | 8,875                               |   | 7,826 |

| (1)   | Until      February 2007 – the company's interest in HOMI USA was 70%. See note      1(c). |
|-----------------|--------------------------------------------------------------------------------------------------|

| (2)   | Through      subsidiaries in Italy (including a Malta branch), Germany, Australia,      France and the U.K. |
|-----------------|-------------------------------------------------------------------------------------------------------------|

| (3)   | From      March 2008, HOMI South Africa (Pty) Ltd. ("HOMI SA") is a 100% wholly      owned subsidiary of HOMI Israel Ltd. ("HOMI Israel"). Prior to such date,      HOMI Israel's interest in HOMI SA was 60%.). |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4)   Prior      year – 50% holdings (see Note 1e). |
|--------|--------------------------------------------------------------------------|

----

|   | d. | Cash      and cash equivalents: |
|--------|----|---------------------------------|

|   | e. | Short-term      bank deposits: |
|--------|----|--------------------------------|

|   | f. | Inventory: |
|--------|----|------------|

|   | g. | Property      and equipment: |
|--------|----|------------------------------|

|                                    | %                  |   |
|-----------------------------------------|--------------------|--------|
| Minibars                                | 10                 |
| Computers      and electronic equipment | 15      – 33 |
| Office      furniture and equipment     | 7                  |

|   | h. | Other      assets: |
|--------|----|--------------------|

| 1.   | Intangible      assets – |
|----------------|--------------------------------|

| 1.1   | Contract      rights for operating minibars in a hotel in South Africa were amortized      using the straight-line method over the contract periods with the hotels -      ten years. The rights were completely amortized since the Company ceased      its operations with the hotel and new goodwill was subsequently created      from acquisition of a minority in SouthAfrica. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.2  | Trademarks      registered in several countries worldwide are capitalized and will be      amortized over the life span of the asset (twenty  years). |
|--------|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|        2.  | Deferred      expenses represent loan acquisition costs arising from the other long-term      loan originated in 2005 and convertible notes payable issued in 2007 and      2006 (see Note 7). |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | i. | Impairment      of long-lived assets: |
|--------|----|---------------------------------------|

|   | j. | Revenue      Recognition, Accounts Receivable and Allowance for Doubtful      Accounts: |
|--------|----|-----------------------------------------------------------------------------------------|

|   | k. | Investments      in affiliates: |
|--------|----|---------------------------------|

----

| NOTE      2:- | SIGNIFICANT      ACCOUNTING POLICIES (cont.) |
|---------------|----------------------------------------------|

|   | l. | Research      and Development costs: |
|--------|----|--------------------------------------|

|  |  m. | Accounting      for stock based compensation: |
|--|----------|-----------------------------------------------|

|   |   | The      Company uses Financial Accounting Standards Board Statement Number 123      (“FAS 123 (R)”), “Share-Based Payments,” to recognize compensation expense      in an amount equal to the fair value of share-based payments such as stock      options granted to employees. Since the Company does not have any share      based arrangements, the adoption of this Statement has not affected the      Company’s consolidated financialstatements. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | n. | Income      taxes: |
|--|----|--------------------|

|   | o. | Concentrations      of credit risk: |
|--------|----|-------------------------------------|

----

|   | p. | Severance      pay: |
|--------|----|---------------------|

|  | q. | Concentrations      of Credit Risk and Fair Value of Financial  Instruments: |
|--|----|------------------------------------------------------------------------------|

|  | r. | Basic      and Diluted Net Income (Loss) perShare: |
|--|----|----------------------------------------------------|

----

|  | s.   | Exchange      rates: |
|--|----------------|----------------------|

|                                          |   | December    31,                                   |
|-----------------------------------------------|--------|---------------------------------------------------|
|                                          |   | 2008                                              |   | 2007 |
| New      Israeli Shekel (NIS)                 |   |    $  0.263              |   | $  0.260 |
| Euro      (EU)                                |   |    $  1.393              |   | $  1.471 |
| South      African Rand (SAR)                 |   |    $  0.106              |   | $  0.147 |
| Australian      Dollar (AU$)                  |   |    $  0.686              |   | $  0.887 |
| Pound      Sterling (GBP)                     |   |    $  1.459              |   | $  2.005 |
|                                          |   |                                              |   |   |
|                                          |   | Year      Ended December 31,                      |
| Increase      (Decrease) in Rate of Exchange: |   | 2008                                              |   | 2007 |
| NIS                                           |   |  1.1%                                        |   |   9.7% |
| EU                                            |   |  (5.3%)                                      |   | 11.7% |
| SAR                                           |   |        (27.9%) |   |   2.8% |
| AU$                                           |   |        (22.7%) |   |  12.2% |
| GBP                                           |   |        (27.2%) |   |   2.2% |

|   | t. | Advertising      Costs: |
|--------|----|-------------------------|

|   | u. | Implementation      of new accounting Standards: |
|--------|----|--------------------------------------------------|

----

----

|                        | December      31, |
|-----------------------------|-------------------|
|                        | 2008              |   | 2007 |
|                        |              |   |   |
| Prepayment      and others  | 130               |   | 72 |
| Government      authorities | 115               |   | 51 |
| Shareholders                | 4                 |   | 2 |
|                        |              |   |   |
|                        | 249               |   | 125 |

|                                       | December  31,                                  |
|--------------------------------------------|----------------------------------------------------------|
|                                       | 2008                                                     |   | 2007 |
| Cost:                                      |                                                     |   |   |
| Minibars                                   | 7,367                                                    |   | 6,319 |
| Production      equipment and parts        | 621                                                      |   | 547 |
| Computers      and electronic equipment    | 135                                                      |   | 70 |
| Office      furniture, equipment and other | 98                                                       |   | 91 |
|                                       |                                                     |   |   |
|                                       | 8,221                                                    |   | 7,027 |
| Accumulated      depreciation:             |                                                     |   |   |
| Minibars                                   | 2,614                                                    |   | 2,325 |
| Production      equipment and parts        |          54 |   | - |
| Computers      and electronic equipment    | 66                                                       |   | 57 |
| Office      furniture, equipment and other | 58                                                       |   | 48 |
|                                       |                                                     |   |   |
|                                       | 2,792                                                    |   | 2,430 |
|                                       |                                                     |   |   |
| Depreciated      cost                      | 5,429                                                    |   | 4,597 |

----

|                                                                      | December      31, |
|---------------------------------------------------------------------------|-------------------|
|                                                                      | 2008              |   | 2007 |
| (A)      Intangible assets                                                |              |   |   |
|       Contract      rights and goodwill (1) |              |   |   |
|       Cost                                  | 27                |   | 53 |
|       Accumulated      amortization         | -                 |   | (42) |
|       Effect      of exchange rate change   | -                 |   | 15 |
|                                                                      | 27                |   | 26 |
|                                                                      |              |   |   |
|       Trademark      (1)                    | 46                |   | 30 |
|                                                                      |              |   |   |
|                                                                      | 73                |   | 56 |

| (B)      Deferred expenses -                                          |   |   |   |
|-----------------------------------------------------------------------|--------|--------|--------|
|       Cost                              | 116    |   | 116    |
|       Accumulated      amortization (2) | (49)   |   | (26)   |
|                                                                  | 67     |   | 90     |
|                                                                  | 140    |   | 146    |

|   | (1) | See      Note 2h. |
|--------|-----|-------------------|

|  | (2)   |  Deferred      expenses in regard to loans received are amortized over the loan period of      nine years. |
|--|-----------------|-----------------------------------------------------------------------------------------------------------------|

----

| During      the years 2006 and 2007, HOMI raised $ 494 through the issuance of notes.      The notes bear interest at a rate of 8% per annum and are convertible into      common stock at a conversion price ranging between $ 0.50 and $ 0.80 per      share, depending on the conversion dates. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                               |
| Interest      on the notes is due and payable on a quarterly basis commencing March      2007. Principal will be repaid in eight equal quarterly installments      commencing December 2008. The principal repaid was $15.                                                                         |
|                                                                                                                                                                                                                                                                                               |
| The      financing under the notes was performed via a third party company,      unaffiliated with the  Company, based on a Memorandum of      Understanding dated September 2006 as amended in February 2007, in return      for a 10% commission on the amount raised.                 |
|                                                                                                                                                                                                                                                                                               |

| Presentation      in the financial statements: |   | December      31, |
|------------------------------------------------|--------|-------------------|
|                                           |   | 2008              |   | 2007 |
| Long-term      liability                       |   | 260               |   | 494 |
| Current      maturities of long-term liability |   | 219               |   | - |
|                                           |   |              |   |   |
|                                           |   | 479               |   | 494 |

| a.       Composed      as follows: |                                                                                                                          |   |              |
|-----------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|
|                                                                  |                                                                                                                          |   | December      31, |
|                                                                  |                                                                                                                          |   | 2008              |   | 2007 |
|                                                                  | From      others (1)                                                                                                          |   |              | 782 |   | 885 |
|                                                                  | From      Minority (2)                                                                                                        |   |              | - |   | 192 |
|                                                                  |                                                                                                                          |   |              |   |   |   |
|                                                                  | Total                                                                                                                         |   |              | 782 |   | 1,077 |
|                                                                  | Less      - current maturities (includes $ 0 and $ 192 from shareholders as of      December 31, 2008 and 2007, respectively) |   |              | (113) |   | (292) |
|                                                                  |                                                                                                                          |   |              |   |   |   |
|                                                                  |                                                                                                                          |   | 669               |   | 785 |

|        (1)  | In      March and June, 2005, HOMI and the subsidiary in the U.S. received from      Horizon Challenges Investment Company Ltd. (“Horizon”) loans in the total      amount of $ 1.1 million, which Horizon undertook to provide to the Company      (“the Financing”), pursuant to a Financing Agreement, dated as of March 1,      2005, as amended on May 17, 2005. The loans bear interest at the rate of      11.67% and are to be repaid in monthly installments for nine years. The      loans are secured by a lien on all minibars in respect of which the loan      was received, and a security interest and assignment of a portion of HOMI      and/or its subsidiaries’ monthly revenues from those minibars, in the      amount required to pay each month’s repayments on all outstanding loans,      principal plus interest. |
|-----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        (2)  |  See      Note 16i. |
|-----------------------|--------------------------|

----

|   | b. | Aggregate      maturities of long-term loans for years subsequent to December 31, 2008      are as follows: |
|--------|----|-------------------------------------------------------------------------------------------------------------|

|  Year               |   | Amount |
|--------------------------|--------|--------|
| 2009                     |   | 113    |
| 2010                     |   | 126    |
| 2011                     |   | 142    |
| 2012                     |   | 159    |
| 2013      and thereafter |   | 242    |
|                     |   |   |
|                     |   | 782    |

|                                   | December      31, |
|----------------------------------------|-------------------|
|                                   | 2008              |   | 2007 |
| Accrued      expenses                  | 117               |   | 64 |
| Employees      and payroll accruals    | 80                |   | 49 |
| Government      authorities and others | 58                |   | 66 |
| Related      parties                   | 34                |   | 90 |
| Other                                  | 3                 |   | 30 |
|                                   |              |   |   |
|                                   | 292               |   | 299 |

|   | a. | HOMI      and its affiliates have contractual obligations towards hotels with regard      to the operation of minibars in hotel rooms. HOMI and its affiliates own      most of these minibars. Several hotels have a contractual purchase option      granted which enables them to purchase the minibars at a price which      results in a profit for the Company, and the agreement with the hotel is      then terminated. To date, no hotel has exercised such an      option. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | b. | As      of the balance sheet date, there is a guarantee given by a shareholder of      the company to a bank, which is limited to $10. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------|

|   | c. | Liens      have been placed on certain Company's assets, including the rights to      receivables from customers, in favor of banks and others, as security for      amounts due. Total liabilities that are secured by these liens as of      December 31, 2008 and 2007 amount to approximately $ 782 and $ 885,      respectively. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d. | Liens      on behalf of the loan received from Horizon – see Note 8a    (1). |
|--------|----|------------------------------------------------------------------------------------|

----

|   | e. | Rent      expense |
|--------|----|-------------------|

| a.   | During      the second quarter of 2007, shareholders signed a notice of conversion to      convert shareholders' loans in the amount of approximately $ 77 to 153,396      common shares of HOMI, at the rate of $ 0.50 per share, in accordance with      a resolution of the Company's Board of  Directors. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (see      also Note 16e.) |
|--------|---------------------------|

| b.   | During      the third quarter of 2007, HOMI issued 48,387 shares of common stock at a      price of $ 0.295 per share (representing a value of $ 15), as      consideration for bona fide legal consulting services that it received      from its legal counsel. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | a. | Major      customers’ data as a percentage of total sales to unaffiliated      customers: |
|--------|----|-------------------------------------------------------------------------------------------------|

|            |   | Year      ended December 31, |
|-----------------|--------|------------------------------|
|            |   | 2008                         |   | 2007 |
|            |   |                         |   |   |
| Customer      A |   | 11.2%                        |   | 9.1% |
| Customer      B |   |   9.7%             |   | 8.7% |
| Customer      C |   |   9.4%             |   | 6.3% |
| Customer      D |   |   8.9%             |   | 8.5% |
| Customer      E |   |  7.8%                   |   | 10.7% |
| Customer      F |   |  5.6%                   |   | 8.2% |

|   | b. | Breakdown      of Consolidated Sales to unaffiliated Customers according to Geographic      Regions: |
|--------|----|------------------------------------------------------------------------------------------------------|

|              |   |   | Year      ended December 31, |
|-------------------|--------|--------|------------------------------|
|              |   |   | 2008                         |   | 2007 |
|              |   |   |                         |   |   |
| ROW               |   |   | 35%                          |   | 36% |
| Israel            |   |   | 32%                          |   | 21% |
| USA               |   |   | 28%                          |   | 30% |
| South      Africa |   |   | 5%                           |   | 13% |
| Total             |   |   | 100%                         |   | 100% |

|  | c.   | As      of December 31, 2008, $212 of the consolidated long-lived assets were      located in South Africa; $690 were located in Israel; $3,235 in the USA;      and $1,292 in ROW. As of December 31, 2007, $489 of the consolidated      long-lived assets were located in South Africa, $383 were located in      Israel, $2,182 in the USA and $1,543 inROW. |
|--|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                       | Year      ended December 31, |
|--------------------------------------------|------------------------------|
|                                       |                         | 2008 |   | 2007 |
|                                       |                         |   |   |   |   |
|  Interest      on long-term loans (1) |                         | 160 |   | 117 |
| Linkage      difference and others, net    |                         |   |  520 |   | (117) |
|                                       |                         |   |   |   |   |
|                                       |                         |   |  680 |   |  - |

----

|                                                                                                        | Year      ended December 31, |
|-------------------------------------------------------------------------------------------------------------|------------------------------|
|                                                                                                        |                         | 2008 |   | 2007 |
|  Income      from termination of agreements,      net      (see Note 1c) | -                            |   | 472 |
|  Income      from sale of investment, net (see (1) below)                                              | -                            |   | 270 |
|  Income      from transactions with a subsidiary's minority  (see Note      1d)              | 7                            |   | - |
| Others                                                                                                      |                         | (1) |   |   10 |
|                                                                                                        |                         |   |   |   |
|                                                                                                        |                         | 6 |   | 752 |

|        (1) |  On      February 13, 2007, HOMI sold all its common and preferred shares which it      held in BSI to Eurogest Foundation, a Vaduz, Liechtenstein Corporation      ("Eurogest"), at a price of $ 0.55 per share, for the total sale price of      $ 2.35 million, which was paid to HOMI by  Eurogest. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | a.   | Corporate      tax structure: |
|--|----------------|-------------------------------|

|   |   b. | Pursuant      to the Income Tax (Inflationary Adjustments) Law - 1985, till 2007 results      for tax purposes in Israel are measured in real terms, in accordance with      changes in the Israeli Consumer Price Index. However, Paragraph 9(f) of      Statement of Financial Accounting Standard No. 109, "Accounting for Income      Taxes," prohibits the recognition of deferred tax liabilities or assets      that arise from differences between the financial reporting and tax bases      of assets and liabilities that are remeasured from the local currency into      U.S. dollars using historical exchange rates and that result from changes      in exchange rates or indexing for taxpurposes. |
|--------|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  c. | The      subsidiary in the USA is subject to both federal and state tax. The      federal tax is determined according to taxable income, for the first $ 50      taxable income the rate is 15%. In addition, a 9.3% California state tax      is applicable. |
|--------|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | (1)   As      of December 31, 2008 HOMI Inc. had approximately $ 2,058 net operating      loss carryforwards. |
|----------------|------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | As      of December 31, 2008 HOMI Israel Ltd. had approximately $ 445 Israeli net      operating loss carryforwards. The loss carryforwards in Israel have no      expiration date. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) |   As      of December 31, 2008, HOMI USA had approximately $1,869 net operating loss      carryforwards. Utilization of U.S. net operating losses may be subject to      substantial annual limitation due to the “change in ownership” provisions      of the Internal Revenue Code of 1986 and similar state provisions. The      annual limitations may result in the expiration of net operating losses      before utilization. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | As      of December 31, 2008 the Subsidiary in Australia had net operating loss      carryforwards of $ 387. |
|--------|-----|--------------------------------------------------------------------------------------------------------------|

|  | (5)  |  As      of December 31, 2008 the Subsidiaries in Italy and Malta had net operating      loss carryforwards of $ 219. |
|--|-----------|----------------------------------------------------------------------------------------------------------------------------|

----

|   | e. | Deferred      income taxes: |
|--------|----|-----------------------------|

|                                                          | December      31, |
|---------------------------------------------------------------|-------------------|
|                                                          | 2008              |   | 2007 |
| Operating      loss carryforwards                             | 1,687             |   | 1,196 |
| Temporary      differences in regard to expenses and property | (95)              |   | (84) |
|                                                          |              |   |   |
| Net      deferred tax asset before valuation allowance        | 1,592             |   | 1,112 |
| Valuation      allowance                                      | (1,617)           |   | (1,133) |
|                                                          |              |   |   |
| Net      deferred tax                                         | (25)              |   | (21) |

|   | f. | Composition      of taxes on income: |
|--------|----|--------------------------------------|

|                | Year      ended December 31, |
|---------------------|------------------------------|
|                |                         |   | 2008 |   | 2007 |
|                |                         |   |   |   |   |
| Current      taxes  |                         |   | (10) |   | (25) |
| Deferred      taxes |                         |   | (4) |   | (11) |
|                |                         |   |   |   |   |
|                |                         |   | (14) |   | (36) |

|   | g. | Breakdown      of losses (income) before taxes: |
|--------|----|-------------------------------------------------|

|              | Year      Ended December 31, |
|-------------------|------------------------------|
|              | 2008                         |   | 2007 |
| Israel            | 299                          |   | (598) |
| South      Africa | (18)                         |   | 28 |
| USA               | 796                          |   | 114 |
| ROW               | 883                          |   | (18) |
|              |                         |   |   |
| Total             | 1,960                        |   | (474) |

|   | h. | The      main items for reconciliation between the statutory tax rate of the      Company and the effective tax rate are the non-recognition of tax benefits      from accumulated net operating losses carryforward among the various      subsidiaries worldwide due to uncertainty of the realization of such tax      benefits. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | a. | The      following transactions with related parties are included in the financial      statements: |
|--------|----|-----------------------------------------------------------------------------------------------------|

|                                         | Year      ended December 31,                                                                                                    |
|----------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|
|                                         | 2008                                                                                                                            |   | 2007 |
| Directors'      fees and liability insurance | 60                                                                                                                              |   |                66 |
|                                         |                                                                                                                            |   |   |
| Consulting      and management fees          |         534                                                                             |   | 575 |
|                                         |                                                                                                                            |   |   |
| Interest      Expense                        |                      4 |   |                 18 |
|                                         |                                                                                                                            |   |   |
|                                         |         598                                                                             |   |          659 |

|   | b. | Guarantees      and participation of shareholders - see Note10. |
|--------|----|-----------------------------------------------------------------|

|   | c. | During      the year 2007, an affiliated company paid the Company, reimbursement of      expense and management fees of$ 70. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------|

|   | d. | As      for balances and loans as of December 31, 2008 and 2007 - see Note 6 and      Note 9. |
|--------|----|-----------------------------------------------------------------------------------------------|

|   | e.     In      December 2003, HOMI entered into agreement with two shareholders pursuant      to which each agreed to lend HOMI $ 150 with notes payable bearing      interest at fixed rate of 4%. In 2007, the outstanding balance of the      loans was converted into shares of HOMI's common  stock. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | f. | Directors'      fees of $ 35 and $ 30 for the years 2008 and 2007, respectively and      directors’ insurance expenses of $ 25 and $ 36 for the years 2008 and      2007, respectively. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | g. | The      Management of the Company is entitled to an annual bonus which is computed      as a percentage of the Company's Earnings before Income Tax, Depreciation      and Amortization ("EBITDA") and as a percentage of the Company's Net      Profits (cumulative). In the years 2008 and 2007, such bonus expense, as      it relates to managers which are related parties, was in the amounts of $      0 and $ 73, respectively. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | h. | The      Company agreed to pay an annual management and consulting fee to a company      that is owned by its Chairman. The services are in addition to the      Chairman's normal duties as an officer of the Company. The fee, payable      only if the Company is profitable, is graduated according to defined      profit milestones. In the years 2008 and 2007, such fees amounted to $ 0      and $ 60, respectively |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | i. | The      minority shareholders of HOMI's South African subsidiary up to the year of      2007 granted a loan to the subsidiary amounting to $ 192 as of December      31, 2007 (see Note 8a). The loan was linked to the South African Rand with      variable annual interest of 14% for the year 2007. The loan was repaid      during 2008, as part of the agreement by which HOMI (through a subsidiary)      acquired all of the minority shareholder's shares in HOMI South Africa      (see Note 1d). |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| a.   | In      February 2009, HOMI completed a subscription rights offering. HOMI raised      an amount of $ 1,418 part by conversion of loans from shareholders and      part by an additional mobilization of capital. In consideration, HOMI      issued 28,357,262 common stock shares at $ 0.05 per share (see also Note      6). |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | On      February 10, 2009, Remstone Limited, a wholly owned subsidiary of HOMI      Israel Ltd., which is a wholly owned subsidiary of HOMI, sold its interest      in HOMI's South African subsidiary to CLevo Corporation S.A., a Panama      corporation. The purchase price was $ 205 on a "no cash no debt" basis.      The transaction was effective as of January 28, 2009. As a result, HOMI      South Africa changed its name, and ceased to be a subsidiary or affiliate      of HOMI. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| • |   | pertain      to the maintenance of records that in reasonable detail accurately and      fairly reflect the transactions and dispositions of our      assets; |
|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | provide      reasonable assurance that transactions are recorded as necessary to permit      preparation of financial statements in accordance with generally accepted      accounting principles, and that our receipts and expenditures are being      made only in accordance with authorizations of our management and our      board of directors; and |
|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | provide      reasonable assurance regarding prevention or timely detection of      unauthorized acquisition, use, or disposition of our assets that could      have a material effect on our financial  statements. |
|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 1 |   | Entity control level.      Management concluded that entity control level was not optimal. This      material weakness is a result of significant deficiencies in the company's      control environment. |
|---|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 |   | Segregation of duties in the      finance department. Management’s job description of financial      employees was not properly designed. Specifically, the Company did not      maintain proper segregation of duties between its financial      personnel. |
|---|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | the      integration of updated financial software and the establishment of      additional controls over financialreporting; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | the      creation of new mechanisms for the review and approval of invoices to      customers and/or from suppliers; |
|------------------|----------------------------------------------------------------------------------------------------------------------|

| (iii)   | increased      frequency of sudden checks; |
|-------------------|--------------------------------------------|

| (iv)   | increased      levels of discussions and documentation by senior financial      management; |
|------------------|---------------------------------------------------------------------------------------------|

| (v)   | the      establishment of additional controls over financial    reporting |
|-----------------|---------------------------------------------------------------------------|

----

|   | (a) | Exhibits      required by Item 601 of RegulationS-K |
|--------|-----|-----------------------------------------------------|

| Exhibit      No. | Description                                                                                                                                                                                                                                                   |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |                                                                                                                                                                                                                                                          |
| 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             | BTM-BSI      Agreement for Israel, Jordan and Turkey (1)      (3)                                                                                                                                                                                             |
| 10.2             | BTM-BSI      Agreement for South Africa (1)      (3)                                                                                                                                                                                                          |
| 10.3             | HOS-BTM      Stock Purchase Agreement (1)      (3)                                                                                                                                                                                                            |
| 10.13            | Consulting      Agreement between BTM 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)                                                                                                                                                                                           |
| 10.17            | Loan      Agreement by and between HOMI and Jacky Ronnel dated December1, 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 Rohia Mihali dated      March 1, 2003(1)      (7)                                                                                                                                               |
| 10.20            | Financing      Agreement between HOMI and Solog Mifallei Srigah Ltd. dated February 28,      2005(1)                                                                                                                                                          |
| 10.21            | Loan      Agreement by and between HOMI and Avraham Bahry and Rodia Mihali dated      November 2004(1)                                                                                                                                                        |
| 10.22            | Loan      Agreement by and between HOMI and Avraham Bahry and Rodia Mihali dated      November 2004.(1) (8)                                                                                                                                                   |
| 10.33            | Loan      Agreement by and between HOMI and Avraham Bahry and Daniel Cohen dated      November 11, 2008(1) (11)                                                                                                                                               |
| 10.34            | Employment      Agreement by and between HOMI Europe S.A.R.L and Jacob Ronnel dated      January 1, 2008 (1)(11)                                                                                                                                              |
| 10.35            | Employment      Agreement by and between HOMI Israel Ltd. and Daniel Cohen dated August      11, 2008 (1) (11)                                                                                                                                                |
| 10.36            | Employment      Agreement by and between HOMI Israel Ltd. and Linor Labandter dated August      11, 2008. (1)(11)                                                                                                                                             |
| 10.37            | Loan      Agreement by and between HOMI and Jacob Ronnel and Aryeh Reif dated      December 8, 2008 (12)                                                                                                                                                      |
| 10.38            | Loan      Agreement by and between HOMI and Daniel Cohen dated April 17, 2009      (13)                                                                                                                                                                  |
| 10.39            | Loan      Agreement by and between HOMI and Avraham Bahry dated May 12,      2009(14)                                                                                                                                                                         |
| 14.0             | Code      of Ethics (8)                                                                                                                                                                                                                                       |
| 31.1*            | Certification      of HOMI’s President pursuant to Rule13a- 14(a) of the Securities Exchange      Act of 1934*                                                                                                                                          |
| 31.2*            | Certification      of HOMI’s Chief Financial Officer pursuant to Rule13a- 14(a) of the      Securities Exchange Act of 1934*                                                                                                                            |
| 32.1*            | Certification      of HOMI’s President and HOMI’s Chief Financial Officer required by Rule      13a-14(b) under the Securities Exchange Act of 1934 and Section 1350 of      Chapter 63 of Title 18 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 the 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 |
|--------|------|----------------------------------------------------------------|

|   | (11) | Incorporated      by reference from Amendment No. 3 to registration statement on Form S-1      filed November 24, 2008. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------|

|   | (12) | Incorporated      by reference from Form 8-K filed December 12,  2008. |
|--------|------|------------------------------------------------------------------------|

|   | (13) | Incorporated      by reference from Form 8-K filed April 21,2009. |
|--------|------|-------------------------------------------------------------------|

|   | (14) | Incorporated      by reference from 8-K filed May 15,2009. |
|--------|------|------------------------------------------------------------|

|   | * | Filed      herewith. |
|--------|---|----------------------|

----

SIGNATURES

|   Date: June 4,      2009 | Hotel      Outsource Management International, Inc.                                                           |
|--------------------------------|---------------------------------------------------------------------------------------------------------------|
|                           |                                                                                                          |   |
|                           | By:                                                                                                           | /s/      Daniel Cohen |
|                           | Daniel      Cohen                                                                                             |
|                           | President                                                                                                     |
|                           | (On behalf of the Registrant and as Principal Executive Officer) |

|   | By:                                                                                                                                           | /s/      Jacob Ronnel |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|
|   | Jacob      Ronnel                                                                                                                             |
|   | Chief Financial Officer                                                                                                             |
|   | (On behalf of the Registrant and asPrincipal Financial Officer      and Principal Accounting Officer) |

| Dated:      June 4, 2009 | /s/      Daniel Cohen                                 |
|--------------------------|-------------------------------------------------------|
|                     | Daniel      Cohen                                     |
|                     | President,      Director                              |
|                     |                                                  |
| Dated:      June 4, 2009 | /s/      Jacob Ronnel                                 |
|                     | Jacob      Ronnel                                     |
|                     | Chief      Executive Officer, Chief Financial Officer |
|                     | and      Director                                     |
|                     |                                                  |
| Dated:      June 4, 2009 | /s/                                                   |
|                     | Ariel      Almog                                      |
|                     | Director                                              |
|                     |                                                  |
| Dated:      June 4, 2009 | /s/      Avraham Bahry                                |
|                     | Avraham      Bahry                                    |
|                     | Director                                              |
|                     |                                                  |
| Dated:      June 4, 2009 | /s/      Jacob Faigenbaum                             |
|                     | Jacob      Faigenbaum                                 |
|                     | Director                                              |
|                     |                                                  |
| Dated:      June 4, 2009 | /s/                                                   |
|                     | Yoav      Ronen                                       |
|                     | Director                                              |
|                     |                                                  |
| Dated:      June 4, 2009 | /s/      Kalman Huber                                 |
|                     | Kalman      Huber                                     |
|                     | Director                                              |
|                     |                                                  |

----