U.S.
SECURITIES AND EXCHANGE
 COMMISSION
 Washington,
D.C. 20549
  FORM
10-KSB
  x ANNUAL REPORT
UNDER SECTION 13 OR 15(d)
 OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the
fiscal year ended December 31, 2007
  o TRANSITION REPORT
UNDER SECTION 13 OR 15(d)
 OF
THE SECURITIES EXCHANGE ACT OF 1934
  Commission
File No. 000-26213
  ROOMLINX,
INC.
  (Name of
Small Business Issuer in its charter)
  Nevada
                83-0401552(State
      or other jurisdiction of
                (I.R.S.
      Employerincorporation
      or organization)
                Identification
      No.)
 
 2150
W. 6th
Avenue, Unit H, Broomfield, CO 80020
 (Address
of principal executive offices)
  (303)
544-1111
 (Issuer's
telephone number)
  Securities
registered under Section 12(b) of the Act: None
  Securities
registered under Section 12(g) of the Act:
  (i)
                Common
      Stock, $.001 Par Value; and(ii)
                Class
      A Preferred Stock, $.20 Par Value.
  
  Check
whether the issuer (1) filed all reports required to be filed by section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes: o No: x
  Check
if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of the Form 10-KSB or any
amendment to this Form 10-KSB x
  State
issuer's revenues for its most recent fiscal year: $2,241,250
  State
the aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.)
  The
aggregate market value of the voting stock held by non-affiliates of the
registrant is approximately $1,790,507as of October 6,
2008.
  As
of October 6, 2008, the registrant’s issued and outstanding shares were as
follows:  157,065,781 shares common stock, 720,000 shares of Class A
Preferred Stock, and 1,000 shares of Series C Preferred Stock.
  TRANSITIONAL
SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE):
  Yes o No x
  2
  INDEXPART
      IItem
      1.
                Description of Business
                4Item
      2.
                Description of Properties
                12Item
      3.
                Legal Proceedings
                13Item
      4.
                Submission of Matters to a Vote of Security
      Holders
                13PART
      IIItem
      5.
                Market for Common Equity and Related Stockholder
      Matters
                13Item
      6.
                Management's Discussion and Analysis of Financial Condition
      and Plan of Operations
                19Item
      7.
                Financial Statements
                29Item
      8.
                Changes in and Disagreements with Accountants on Accounting
      and Financial Disclosure
                50Item
      8A.
                Controls and Procedures
                50Item
      8B.
                Other Information
                51PART
      IIIItem
      9.
                Directors, Executive Officers, Promoters and Control
      Persons; Compliance with Section 16(a) of the Exchange
    Act
                51Item
      10.
                Executive Compensation
                54Item
      11.
                Security Ownership of Certain Beneficial Owners
      Management
                56Item
      12.
                Certain Relationships and Related
      Transactions
                57Item
      13.
                Exhibits
                58Item
      14.
                Principal Accountant Fees and Services
                60Signatures
                61
  3
 Index
   PART
I
  ITEM 1. DESCRIPTION OF BUSINESS
  ORGANIZATIONAL
HISTORY/RECENT MANAGEMENT DEVELOPMENTS
  This
Form 10-KSB for the year ended December 31, 2007 is being filed on or about
October 8, 2008.  We expect that we will file all of our delinquent
quarterly and annual reports through and including the Form 10-Q for the quarter
ended September 30, 2008 in the next 60 days, but no assurance can be given with
respect to these matters.
  On
December 27, 2005, our stock was removed from listing from the OTC Bulletin
Board as a result of our failure to timely file our Form 10-QSB for the quarter
ended September 30, 2005.  Since such date, our stock has traded only
on the “Pink Sheets”.
  On
February 8, 2007, Mr. Woody McGee was appointed as a member of our Board of
Directors; effective as of October 12, 2007, Mr. McGee resigned from our Board
of Directors.
  On
April 14, 2008, we issued to Creative Hospitality Associates (“CHA”) a Warrant
pursuant to a sales agent agreement with CHA (the “Agreement”).
  The
Warrant is initially exercisable for Series B Preferred Stock.  At such
time as we have a sufficient number of shares of common stock authorized to
permit the exercise of the Warrant for common stock (the “Triggering Event”),
the Warrant will automatically be exercisable for common stock and not Series B
Preferred Stock.  The maximum number of shares of common stock for which
the Warrant is ultimately exercisable for is 15,000,000 and the ultimate
exercise price per share of common stock for which the Warrant is exercisable is
$0.02 per share, each of which is subject to adjustment and the conditions
contained in the Warrant.  The Warrant becomes ultimately exercisable for
such 15,000,000 shares of common stock pursuant to a vesting schedule as set
forth in the Warrant that provides that the Warrant becomes ultimately
exercisable for 500,000 shares of common stock with each 1,000 rooms in a hotel
or other property that CHA or its affiliate introduces to us and in which our
Media and Entertainment System is installed.  No installations have
been made through October 6, 2008.
  On
July 31, 2008 we entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with an Investor Group, and certain affiliated trusts (collectively,
the “Investors”), pursuant to which we simultaneously sold and issued to the
Investors an aggregate of $2,500,000 of Series C Preferred Stock (“Series C
Stock”).  In connection with the Purchase Agreement, the Registrant
also issued Warrants to the Investors for the purchase of additional shares of
Series C Stock or common stock and entered into a Registration Rights Agreement
with the Investors.
  4
 Index
   On
July 31, 2008 Peter Bordes and Herbert Hunt resigned from the Board of Directors
and Judson Just and Christopher Blisard were appointed to serve as Directors of
Roomlinx to fill the vacancies on the Board of Directors created by the
resignations, each to serve as a Director until the next annual meeting of
shareholders and until his successor has been elected and
qualified.
 
 GENERAL
  We
focus our business on providing wired networking solutions and Wireless Fidelity
networking solutions, also known as Wi-Fi, for high speed internet access to
hotels, convention centers, corporate apartments and special events locations.
As of October 6, 2008, our current customer base consisted of approximately 147
hotels and 24,709 guest and meeting rooms.
  Our
solution offers easy to use access, providing instant and seamless connections
for laptop users from anywhere throughout a property, including guest rooms,
meeting rooms, back office and public areas, over a high-speed connection that
is up to 300 times faster than a standard dial-up modem. Users on this network
have access to home and corporate email accounts and Virtual Private Networks,
also known as VPNs. These users have flexible billing options, choosing from any
one of free service, flat rate, time-based usage or unlimited. In addition these
users can expand the service to include value-added services such as wireless
point of sale, maintenance, check-in and internet telephony
services.
  As
of September 12, 2007 we announced that we are entering into the in-room media
and entertainment market.  The new Roomlinx product will provide
premium applications for internet-based business and entertainment media to
venues serving the visitor market such as hotels, resorts, and time share
properties.
  The
Roomlinx internet based media and entertainment offering will include a broad
range of content and features to satisfy guests while maximizing revenue
opportunities for the hotelier.  The solution includes movies, gaming,
international and US television programming, music and news; local travel and
concierge information; and business productivity tools that include desktop
applications, conferencing and printing applications.
  We
believe we will generate revenue through:
 1.
                Ongoing
      Connectivity Service and Support Contracts2.
                Delivery
      of  Content and Advertising3.
                Delivery
      of Business and Entertainment applications4.
                E-commerce
  5
 Index
 
 OUR
SERVICES
  Currently we offer the following services to our
customers:
  v
                site-specific
      determination of needs and requirements;v
                design
      and installation of the wireless or wired network;v
                the
      development and installation of a media and entertainment
      system;v
                full
      maintenance and support of the network and media and entertainment
      system;v
                technical
      support to assist guests and hotel staff 24 hours a day, 7 days a week,
      365 days a year;v
                hotel
      staff and management training;v
                marketing
      assistance and continuous network and system monitoring to ensure high
      quality of service.
  The
main services we currently offer are the installation and servicing of wired and
wireless networks and the development and installation of our media and
entertainment system for hotels.
  Our
strategy is to focus our resources on delivering a wide range of communications
and information services to the hospitality industry. In addition, we plan to
enter, either organically, or through partnerships with current providers, the
sale of our services to other hospitality, recreational and both public and
private facilities.
  The
networks that we install can supply the hotel with all of the internet
requirements to the hotel's back office, guest rooms, restaurants, lobbies,
convention center and meeting rooms over the internal local area network (LAN).
For convention centers requiring a high-speed connection for their booths and
meeting areas, our wireless local area network (WLAN) product enables portable
and mobile computer users to seamlessly access the Internet from anywhere within
the convention center. Users access the Internet without any modification to
their computer and can walk freely about the premises while still being
connected to the network.
  When
we commence service to a new hotel property, we install hardware in the hotel
and integrate that hardware into the hotel's billing server. We give the client
hotel property two options in acquiring our high-speed Internet services: the
hotel can buy the system and pay us a monthly service fee to maintain technical
support (usually on a per room per month basis), or the hotel can lease-to-own
the system with a third party and pay us a monthly service fee. We also obtain
fee income by enabling "meeting rooms" for our hotel customers.
  6
 Index
   We
generally have the first right of refusal to provide all wireless services to
the hotel as well as to provide value added services over the installed network.
We believe that we will increase sales by offering our new in-room media and
entertainment solution to our current wired and wireless internet customer
base.  Roomlinx’ goal is to be the sole source solution for in-room
technology, redefining how the hotel guests access traditional free-to-guest
television, contemporary web content, premium, pre-release, and high-definition
material, along with business tools and information specific to the property and
their stay. We currently deliver this via our user-friendly, streamlined
interface displayed on a sleek, flat-panel HD LCD television and powered by our
Roomlinx media console.  We believe we have truly converged the
television and personal computer into one offing in hotel rooms.
  We
believe that the potential market for our services is largely underserved,
providing us with opportunities for additional growth. Subject to capital
constraints, we intend to leverage the "Roomlinx" brand and distribution to
offer a wider portfolio of products and services.
  We
seek to deepen penetration within our installed customer base and expand the
breadth of our overall customer base by distinguishing our current and future
offerings with value-added solutions through increased marketing
activities.
  OUR
STRATEGY
  Our
short term strategies include the following:
  v
                We
      are seeking to grow the number of rooms installed with our new media and
      entertainment system;v
                We
      are seeking to make our new media and entertainment product our core
      competency and focus on quality service and highly-profitable
      opportunities;v
                We
      are seeking to grow the number of rooms under management. We can improve
      our margins through the recurring revenues that we receive from rooms
      under management;v
                We
      are seeking to attain preferred vendor status or become a brand standard
      with premier hotel chains. Our hotel customers include many of the
      country's most highly regarded hotel chains. If we are successful in
      attaining preferred vendor status or becoming a brand standard, we will be
      able to expand our services to cover the applicable chain's site
      map;v
                We
      are seeking to leverage our core competency by expanding the markets we
      serve beyond hotels to time share, extended stay units, and resort
      properties;v
                We
      hope to expand the IP-based services that we offer to
    include:v
                voice
      over the Internet (VoIP) availability;v
                IP-based
      television programming;v
                IP-based
      advertising through the LCD television and laptop;v
                IP-based
      E-Commerce through the LCD television;v
                wireless
      video on demand (VOD) availability; andv
                Managed
      technical services, to provide special technical services to
      users.v
                We
      hope to offer content or portal services to our customers, thereby
      enabling us to generate "per click"
revenues.
  7
 Index
   Our
longer term strategies include the following:
  v
                We
      hope to be able to offer our media and entertainment solution to
      consumers;v
                We
      hope to capture those consumers as they use our product in the hotel
      rooms; andv
                We
      have begun to consider expansion into the Caribbean and European hotel
      industry,v
                We
      have begun to consider other infrastructure and value added services to
      include in our media and entertainment
product
  Ultimately,
we hope to position ourselves as our customers' central in-room communications,
entertainment and media provider. From our installed hardware, we hope to
provide telephony, broadband, security, managed technology, printing, video and
business center services for our customers. However, we cannot assure our
investors that we will be successful in attaining these goals or that we will
not pursue other strategies when opportunities arise. Among other things,
capital constraints and competition, among other factors, may preclude us from
attaining our goals.
  SALES
AND MARKETING
  SALES
  As of October 6, 2008, our direct sales force
consisted of 4 persons and our channel sales program consisted of 1 master sales
agent and 5 sales agents. While we will always require a small in-house team of
direct sales representatives, we believe that if we are to grow the scale of our
operations, it will be necessary for us to develop a channel sales program
utilizing sales agents and re-sellers. As a result, our direct sales are
supplemented by strategic alliances with communication marketing companies and
communication providers. These organizations already have preferred access to
customers, which may give us an advantage in the marketplace. These sales representatives are paid on a
commission basis. We provide sales training and packaged marketing materials to
our independent representatives in order to obtain optimum installation
contracts.
  8
 Index
   There
are four succinct areas of outsource marketing in the hospitality sector that we
concentrate our sales efforts on:
  v
                Hospitality
      Consultants - This group sells consulting services to hotel ownership and
      management groups.  For the most part, they have strong
      relationships with the aforementioned groups to provide consulting
      expertise.v
                Independent
      Communication Sales Representatives, and Representative Organizations –
      this group sells communication products into the hotel
      industry.  Because they sell multiple lines of communication
      services to hotels, they have direct contact with the Information Systems
      director. These services save money for the hotels as well as providing
      them with additional income to the hotel, and as such they have good
      access to the decision-maker in this market.v
                Wholesale
      Equipment Suppliers, Equipment Installers in the Hospitality Market - This
      group sells and installs central phone systems - also know as PBX systems
      - voice mail systems, property management systems and software related
      services directly into the hotel market. Since these services are directly
      related to both the income and marketing sides of the hospitality area, we
      believe that their access to this clientele is very
  good.v
                The
      Hotel Interconnect Individual or Companies - This group handles the
      installation and the maintenance for the independent communications sales
      representative and interconnect
companies.
  Typically,
at least one and often all three of the above groups interact with the hotel
industry on a daily basis. This provides us with a valuable source of sales and
marketing personnel with direct contact into the industry.
  MARKETING
  We
typically deploy a marketing mix consisting of grass roots marketing by joining
industry specific affiliations such as HTNG (Hotel Technology Next Generation)
and AHLA (American Hotel and Lodging Association) direct mail, internet direct
response, print ads in periodicals aimed at hospitality industry, and tradeshow
sponsorship and support.
  OPERATIONS
  We
have built a foundation on which to achieve growth with minimal fixed
expenditures. We have achieved this by building the infrastructure and quality
controls to outsource the following functions: system integration, bandwidth
provisioning, system deployment, and technical support and service.
  For
our high speed wired and wireless offering we act as a service provider that
aggregates the products and services required to install wireless high-speed
networks and deploys them through a delivery infrastructure that combines
in-house technical and RF (radio frequency) experts with select system
integrators in the customer's area. After installation we seek to manage the
network under a long-term contract.
  For
our Media and Entertainment System offering we control the development of the
product in-house allowing us to have ultimate control of response time and
customer requests for product customization and version
updates.   We outsource the installation and support functions
except for the project management and pro-active monitoring of our technical
components in the field.
  9
 Index
   RECENT
FINANCIAL DEVELOPMENTS
  On
June 11, 2007 and June 13, 2007, we closed a financing with certain investors,
pursuant to which we sold an aggregate of $2,300,000 amount of Convertible
Debentures due May 2012.  The Convertible Debentures are
initially convertible into Series B Preferred Stock, which Series B Preferred
Stock will not be convertible into common stock until such time as the Company
has sufficient number of shares of common stock authorized to permit the
conversion of the Convertible Debentures into common stock, at which time the
Convertible Debentures will automatically be convertible into common stock and
not Series B Preferred Stock.  The ultimate conversion price into shares of
common stock of the Convertible Debentures is $0.02 per share, subject to
certain anti-dilutive provisions contained in the Convertible
Debentures.  The interest on the convertible debentures is six percent
(6%) payable quarterly either in cash or, at the Company’s election, in shares
of the Company’s Series B Preferred Stock prior to the triggering event or
shares of the Company’s common stock thereafter at two and one-half cents
($.025) per share of common stock or a 10% discounted stock price from the
average market price for the 20 business days preceding the interest payment
date, whichever is greater.  As of October 6, 2008, interest has been
settled in shares of our common stock.  Each investor was also given
the option to purchase additional convertible debentures; however, such options
expired on December 12, 2007.
  As
of June 11, 2007, we also reached agreement with a majority of our debt holders
whereby we repaid and canceled all prior existing indebtedness at a fifty
percent (50%) discount to the outstanding principal amount of such
indebtedness.  The total outstanding principal amount of such
indebtedness immediately prior to such repayment and cancellation was
approximately $1.4 million.
  On
October 1, 2007, the Board approved issuance of 1,699,726 shares of our common
stock at $0.025 per share, as interest for the period June 12 through September
30, 2007, pursuant to the clauses outlined in the convertible debenture
agreements of June 11, 2007.
  On
January 1, 2008, the Board approved issuance of 1,437,041 shares of our common
stock at $0.025 per share, as interest for the period October 1 through December
31, 2007, pursuant to the clauses outlined in the convertible debenture
agreements of June 11, 2007.
  On
April 1, 2008, the Board approved issuance of 1,386,885 shares of our common
stock at $0.025 per share, as interest for the period January 1 through March
31, 2008, pursuant to the clauses outlined in the convertible debenture
agreements of June 11, 2007.
  10
 Index
   All
of the shares of common stock approved for issuance in connection with interest
payments on the debentures as provided above were issued in the second quarter
of 2008.
  On
July 1, 2008, the Board approved issuance of 1,402,302 shares of our common
stock at $0.025 per share, as interest for the period April 1 through June 30,
2008, pursuant to the clauses outlined in the convertible debenture agreements
of June 11, 2007.
  On
July 15, 2008 Aaron Dobrinsky exercised 4,000,000 options on a cashless basis
resulting in the net issuance of 2,571,429 shares of common stock.
  On
July 31, 2008 we entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with an investor group and certain affiliated trusts
(collectively, the “Investors”), pursuant to which we simultaneously sold and
issued to the Investors an aggregate of $2,500,000 of Series C Preferred Stock
(“Series C Stock”).  In connection with the Purchase Agreement, the
Registrant also issued warrants to the Investors for the purchase of additional
shares of Series C Stock or common stock and entered into a Registration Rights
Agreement with the Investors.
  On
August 19, 2008 the Company issued 1,200,000 shares as Board of Director
compensation for the year ended December 31, 2007. 800,000 of the shares were
issued to Peter Bordes and 400,000 of the shares were issued to Herbert
Hunt.  The shares were valued at $0.025 per share for a fair market
value of $30,000.  This compensation had been accrued for in
2007.
  COMPETITION
  Wired
and Wireless High-Speed Internet Offering
  The
market for our services has leveled off. Our competitors may use the same
products and services in competition with us. With time and capital, it would be
possible for competitors to replicate our services and offer similar services at
a lower price. We expect that we will compete primarily on the basis of the
functionality, breadth, quality and price of our services. Our current and
potential competitors include:
  -
Other wireless high-speed internet access providers, such as I-Bahn, Guest-Tek,
Wayport, and LodgeNet;
  - Other viable network carriers, such as SBC,
Comcast, Sprint and COX Communications; and
  -
Other internal information technology departments of large
companies.
  Many
of our existing and potential competitors may have greater financial, technical,
marketing and distribution resources than we do. Additionally, many of these
companies have greater name recognition and more established relationships with
our target customers. In addition, we have established strategic relationships
with a few of our potential competitors. In the event such companies decide to
compete directly with us, such relationships would likely be terminated, which
could have an adverse effect on our business.
  11
 Index
   Media
and Entertainment Offering
  The
market for our services is in its infancy.  Due to technological
advances we believe many of the larger companies will not be able to react
quickly in duplicating our offering.  Current competition consists of
players offering portions of our offering, such as video on demand and internet
access; these competitors include:
  -
LodgeNet, SuiteLinq, KoolKonnect, NXTV, Activision, and Total
Vision,
  RESEARCH
AND DEVELOPMENT
  We
seek to continually enhance the features and performance of our existing
products and services. In addition, we are continuing to evaluate new products
to meet our customers' expectations of ongoing innovation and
enhancements.
  Our
ability to meet our customers' expectations depends on a number of factors,
including our ability to identify and respond to emerging technological trends
in our target markets, develop and maintain competitive products, enhance our
existing products by adding features and functionality that differentiate them
from those of our competitors and offering products on a timely basis and at
competitive prices. Consequently, we have made, and we intend to continue to
make, investments in research and development.
  EMPLOYEES
  As
of October 6, 2008 we had a total of 21 full-time personnel and 2 part-time
personnel. None of our employees are covered by a collective bargaining
agreement. We believe that our relations with our employees are
good.
  RISK
FACTORS
  Our
business is subject to numerous risks and uncertainties. Investors should
consider those risks and uncertainties, described in Exhibit 99.1 of this Annual
Report, whenever evaluating our company or an investment in our capital
stock.
  ITEM 2. DESCRIPTION OF PROPERTY
  We lease our principal
offices, which are located at 2150 West 6th
Avenue, Unit H, Broomfield, CO 80020, consisting of approximately 3,200
square feet. Additionally, we rent offices located in Vancouver, British
Columbia, Canada consisting of approximately 560 square feet that we lease until
May 2009.
  12
 Index
   ITEM 3. LEGAL PROCEEDINGS
  No
material legal proceedings to which the Company (or any officer or director of
the Company, or any affiliate or owner of record or beneficially of more than
five percent of the Common Stock, to management's knowledge) is party to or to
which the property of the Company is subject is pending, and no such material
proceeding is known by management of the Company to be
contemplated.
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
  No
matters were submitted to a vote of security holders through the solicitation of
proxies or otherwise from January 1, 2007 through October 6,,
2008.
  ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
  Our
common stock trades on the OTC-Bulletin Board under the symbol "RMLX". Our Class
A Preferred Stock trades on the OTC-Bulletin Board under the symbol "RMLXP". For
the periods indicated, the following table sets forth the high and low bid
quotations for our Common Stock and Class A Preferred Stock as reported by the
National Quotation Bureau, Inc. The quotations represent inter-dealer quotations
without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.
  SYMBOL
                TIME
      PERIOD
                
                LOW
                
                
                HIGHRMLX.PK
                January
      1 - March 31, 2006
                
                $
                0.01
                
                
                $
                0.03April
      1 - June 30, 2006
                
                $
                0.02
                
                
                $
                0.05July
      1 - September 30, 2006
                
                $
                0.01
                
                
                $
                0.03October
      1 - December 31, 2006
                
                $
                0.01
                
                
                $
                0.04January
      1 - March 31, 2007
                
                $
                0.02
                
                
                $
                0.05April
      1 – June 30, 2007
                
                $
                0.02
                
                
                $
                0.04July
      1 – September 30, 2007
                
                $
                0.01
                
                
                $
                0.04October
      1 – December 31, 2007
                
                $
                0.01
                
                
                $
                0.03January
      1, - March 31, 2008
                
                $
                0.02
                
                
                $
                0.03April
      1, - June 30, 2008
                
                $
                0.02
                
                
                $
                0.03July
      1, - September 30, 2008
                
                $
                0.01
                
                
                $
                0.03RMLXP
                January
      1 - March 31, 2006
                
                $
                0.01
                
                
                $
                0.07April
      1 - June 30, 2006
                
                $
                0.01
                
                
                $
                0.05July
      1 - September 30, 2006
                
                $
                0.02
                
                
                $
                0.05October
      1 - December 31, 2006
                
                $
                0.02
                
                
                $
                0.15January
      1 - March 31, 2007
                
                $
                0.07
                
                
                $
                0.07April
      1 – June 30, 2007
                
                $
                0.02
                
                
                $
                0.07July
      1 – September 30, 2007
                
                $
                0.03
                
                
                $
                0.05October
      1 – December 31, 2007
                
                $
                0.08
                
                
                $
                0.08January
      1 – March 31, 2008
                
                $
                0.08
                
                
                $
                0.08April
      1 – June 30, 2008
                
                $
                0.09
                
                
                $
                0.12July
      1 – September 30, 2008
                
                $
                0.12
                
                
                $
                0.13
  13
 Index
   SYMBOL
              TIME
      PERIOD
              
              LOW
              
              
              HIGHRMLX.PK
              January
      1 - March 31, 2006
              
              $
              0.01
              
              
              $
              0.03April
      1 - June 30, 2006
              
              $
              0.02
              
              
              $
              0.05July
      1 - September 30, 2006
              
              $
              0.01
              
              
              $
              0.03October
      1 - December 31, 2006
              
              $
              0.01
              
              
              $
              0.04January
      1 - March 31, 2007
              
              $
              0.02
              
              
              $
              0.05April
      1 – June 30, 2007
              
              $
              0.02
              
              
              $
              0.04July
      1 – September 30, 2007
              
              $
              0.01
              
              
              $
              0.04October
      1 – December 31, 2007
              
              $
              0.01
              
              
              $
              0.03January
      1, - March 31, 2008
              
              $
              0.02
              
              
              $
              0.03April
      1, - June 30, 2008
              
              $
              0.02
              
              
              $
              0.03July
      1, - September 30, 2008
              
              $
              0.01
              
              
              $
              0.03RMLXP
              January
      1 - March 31, 2006
              
              $
              0.01
              
              
              $
              0.07April
      1 - June 30, 2006
              
              $
              0.01
              
              
              $
              0.05July
      1 - September 30, 2006
              
              $
              0.02
              
              
              $
              0.05October
      1 - December 31, 2006
              
              $
              0.02
              
              
              $
              0.15January
      1 - March 31, 2007
              
              $
              0.07
              
              
              $
              0.07April
      1 – June 30, 2007
              
              $
              0.02
              
              
              $
              0.07July
      1 – September 30, 2007
              
              $
              0.03
              
              
              $
              0.05October
      1 – December 31, 2007
              
              $
              0.08
              
              
              $
              0.08January
      1 – March 31, 2008
              
              $
              0.08
              
              
              $
              0.08April
      1 – June 30, 2008
              
              $
              0.09
              
              
              $
              0.12July
      1 – September 30, 2008
              
              $
              0.12
              
              
              $
              0.13
  
 The
closing bid for our Common Stock on the OTC-Bulletin Board on October 6,
2008 was $0.0175. As of October 6, 2008, 157,065,781 shares of Common Stock were
issued and outstanding which were held of record by 285 persons. As of October
6, 2008, 720,000 shares of preferred stock issued and outstanding which were
held of record by 2 persons.
  The
Company has not paid any cash dividends on its stock. There are no restrictions
currently in effect which preclude the Company from declaring dividends.
However, dividends may not be paid on the common stock while there are accrued
but unpaid dividends on the Class A Preferred Stock, which bears a 9% cumulative
dividend. As of December 31, 2007 accrued but unpaid preferred stock dividends
aggregated $120,360. It is the current intention of the Company to retain any
earnings in the foreseeable future to finance the growth and development of its
business and not pay dividends on the common stock.
  RECENT
SALES OF UNREGISTERED SECURITIES
  On
November 20, 2006, we issued (i) to each of Peter Bordes and Herbert Hunt,
3,000,000 shares of our Common Stock having an aggregate value of $60,000 on
such date as payment in full of their respective Board compensation owed to them
for the three-year period 2004 – 2006 and (ii) to Aaron Dobrinsky, 1,000,000
shares of our Common Stock having an aggregate value of $20,000 as payment in
full of his respective Board compensation owed to him for 2006.
  On
November 20, 2006, we granted under our Long-Term Incentive Plan, an aggregate
of 12,300,000 Incentive Stock Options (“ISOs”) and an aggregate of 3,600,000
Non-Qualified Stock Options (“NQOs”).  10,000,000 of the ISOs were
granted to Michael S. Wasik, the President, Chief Executive Officer and Chief
Financial Officer of the Registrant, of which (i) 6,000,000 vested immediately
and (ii) 4,000,000 vest over three years with one-third vesting on the first
anniversary of Mr. Wasik’s employment with the Registrant and an additional
one-third vesting on each of the following two anniversaries
thereof.  1,000,000 of the NQOs were granted to each of Peter Bordes
and Herbert Hunt with respect to their service as members of the Board of
Directors of the Registrant during 2005 and 2006 and vested
immediately.  500,000 of the NQOs were granted to Aaron Dobrinsky with
respect to his service as a member of the Board of Directors of the Registrant
during 2006 and vested immediately.  All of these options were issued
at an exercise price of $0.02 per share, representing the closing price of our
common stock on such date.
  14
 Index
  
 On
December 28, 2006 we issued three bridge notes in the principal amounts of
$50,000 each, and three warrants to purchase 1.3 million shares of common stock
to each lender with an exercise price of $0.03 per share.  On June 10,
2007, two of the three bridge notes were paid back in full and one of them
converted into the convertible debentures dated June 11, 2007.
  On May 4,
2007, the Registrant’s Board of Directors authorized and approved the following
compensation package for each of Peter Bordes and Herbert Hunt for their
services as independent directors of the Registrant for 2007: (i) the payment of
the sum of $20,000 on December 31, 2007 so long as they are serving as an
independent director of the Registrant on such date, and (ii) the grant of
Non-Qualified Stock Options under the Registrant’s Long Term Incentive Plan for
the purchase of up to 500,000 shares of the Registrant’s Common Stock at an
exercise price equal to the May 4, 2007 closing trading price of the
Registrant’s Common Stock, namely $.025 per share, vesting in full on December
31, 2007, so long as they are serving as an independent director of the
Registrant on such date. Such compensation was also offered to Mr. Woody McGee;
however, Mr. McGee resigned from the Board of Directors prior to December 31,
2007.
  On June
11, 2007 and June 13, 2007, we entered into a Securities Purchase Agreement with
certain investors, pursuant to which we sold an aggregate of $2,350,000 of
Convertible Debentures due May 2012 and pursuant to which the investors
were given the option to purchase additional convertible debentures as of
December 13, 2007, all of such options expired unexercised. The Convertible
Debentures were initially convertible into Series B Preferred Stock, which
Series B Preferred Stock would not have been convertible into Common Stock until
such time as the Company has sufficient number of shares of Common Stock
authorized to permit the conversion of the Convertible Debentures into Common
Stock, at which time the Convertible Debentures will automatically be
convertible into Common Stock and not Series B Preferred Stock.  The
ultimate conversion price into shares of Common Stock of the Convertible
Debentures is $0.02 per share, subject to certain restrictions contained in the
Convertible Debentures.  The interest on the convertible debentures is
six percent (6%) payable quarterly either in cash or, at the Company’s election,
in shares of the Company’s Series B Preferred Stock prior to the Triggering
Event or shares of the Company’s Common Stock thereafter at Two and One-Half
Cents ($.025) per share of Common Stock or a 10% discounted stock price from the
average market price for the 20 business days preceding the interest payment
date, whichever is greater. As of October 6, 2008, interest has been settled in
shares of our common stock.
 
 On June
20, 2007, we issued warrants to four individuals for investor relations and
business development services rendered, which are exercisable initially for
shares of Series B Preferred Stock and are ultimately exercisable for the number
of shares of common stock and for the exercise prices per share of common stock
set forth below once we have sufficient shares of common stock available for
issuance upon exercise. The warrants vest immediately and have a five year
term.
  15
 Index
   1,962,500
shares with an exercise price of $0.02
 500,000
shares with an exercise price of $0.02
 500,000
shares with an exercise price of $0.02
 7,000,000
shares with an exercise price of $0.03
 
 On August
6, 2007, we issued 7,500,000 shares of our common stock, as compensation for
investor relations, legal, and business development services rendered to, or the
settlement of obligations owed by, the Company.
 
 On
November 5, 2007, the Registrant’s Board of Directors approved the grant, under
the Registrant’s Long-Term Incentive Plan, of an aggregate of 1,450,000
Incentive Stock Options and an aggregate of 800,000 Non-Qualified Stock
Options.  Such options were issued at an exercise price of $0.015 per
share and vest one-third (1/3) on each of the first three anniversaries of the
employment date.
 
 On
October 1, 2007, the Board approved issuance of 1,699,726 shares of our common
stock, as interest for the third quarter of 2007, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.
 
 On
January 1, 2008, the Board approved issuance of 1,437,041 shares of our common
stock, as interest for the fourth quarter of 2007, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.
 
 On April
1, 2008, the Board approved issuance of 1,386,885 shares of our common stock, as
interest for the first quarter of 2008, pursuant to the clauses outlined in the
convertible debenture agreements of June 11, 2007.
  All of
the shares of common stock approved for issuance in connection with interest
payments on the debentures as provided above were issued in the second quarter
of 2008.
  On April
14, 2008, we issued to Creative Hospitality Associates (“CHA”) a Warrant
pursuant to a sales agent agreement with CHA (the “Agreement”).
 
 The
Warrant is initially exercisable for Series B Preferred Stock.  At such
time as we have a sufficient number of shares of Common Stock authorized to
permit the exercise of the Warrant for Common Stock (the “Triggering Event”),
the Warrant will automatically be exercisable for Common Stock and not Series B
Preferred Stock.  The maximum number of shares of Common Stock for which
the Warrant is ultimately exercisable for is 15,000,000 and the ultimate
exercise price per share of Common Stock for which the Warrant is exercisable is
$0.02 per share, each of which is subject to adjustment and the conditions
contained in the Warrant.  The Warrant becomes ultimately exercisable for
such 15,000,000 shares of Common Stock pursuant to a vesting schedule as set
forth in the Warrant that provides that the Warrant becomes ultimately
exercisable for 500,000 shares of Common Stock with each 1,000 rooms in a hotel
or other property that CHA or its affiliate introduces to us and in which our
Media and Entertainment System is installed.
  16
 Index
   On May
15, 2008, the Registrant’s Board of Directors approved the grant to employees
and consultants, under the Registrant’s Long-Term Incentive Plan, of an
aggregate of 100,000 Incentive Stock Options and an aggregate of 100,000
Non-Qualified Stock Options.  Such options were issued at an exercise
price of $0.017 per share and vest one-third (1/3) on each of the first three
anniversaries of the employment date.
  On July
1, 2008, the Board approved issuance of 1,402,302 shares of our common stock, as
interest for the period April 1 through June 30, 2008, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.
  On July
15, 2008 Aaron Dobrinsky exercised 4,000,000 options on a cashless basis
resulting in the net issuance of 2,571,429 shares of common stock.
 
 On July
21, 2008, the Registrant’s Board of Directors approved the grant, under the
Registrant’s Long-Term Incentive Plan, of an aggregate of 400,000 Incentive
Stock Options and an aggregate of 600,000 Non-Qualified Stock
Options.  Such options were issued at an exercise price of $0.02 per
share and vest one-third (1/3) on each of the first three anniversaries of the
employment date.
 
 Each of
the foregoing issuances was a private issuance and exempt from registration
under Section 4(2) of the Securities Act.
 
 On July
31, 2008 we entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with an Investor Group, and certain affiliated trusts (collectively,
the “Investors”), pursuant to which we simultaneously sold and issued to the
Investors an aggregate of $2,500,000 of Series C Preferred Stock (“Series C
Stock”).  In connection with the Purchase Agreement, the Registrant
also issued Warrants to the Investors for the purchase of additional shares of
Series C Stock or Common Stock and entered into a Registration Rights Agreement
with the Investors.
 
 Each
share of Series C Stock is convertible into such number of shares of Common
Stock as is determined by dividing $2,500 by the initial conversion price of
$0.025 per share (or 100,000 shares of Common Stock for each share of Series C
Stock converted). However, the Series C Stock is not convertible into Common
Stock until such time as the Company has a sufficient number of shares of Common
Stock authorized to permit the conversion of all of the Series C Stock into
Common Stock, at which time the Series C Stock will automatically convert into
Common Stock.
 
 The
Series C Stock accrues dividends at an annual rate of 6% per year, payable
quarterly, either in cash or, at the Registrant’s election, shares of the
Registrant’s capital stock.  There are no redemption rights associated
with the Series C Stock.  Each holder of Series C stock is entitled to
voting rights on an “as converted” to Common Stock basis together with the
holders of Common Stock.
  17
 Index
   Pursuant
to the Purchase Agreement, the Investors also received (i) Series C-1 Warrants
to purchase an aggregate of 200 shares of Series C Stock, at an initial exercise
price of $4,000 per share of Series C Stock, and (ii) Series C-2 Warrants to
purchase an aggregate of 200 shares of Series C Stock, at an initial exercise
price of $6,000 per share of Series C Stock.  The Warrants are
immediately exercisable and expire on the third anniversary of their date of
issuance.  At such time as the Company has a sufficient number of
shares of Common Stock authorized to permit the conversion of all Series C Stock
into Common Stock, each Warrant will no longer be exercisable for shares of
Series C Stock but instead will be exercisable for the number of shares of
Common Stock into which the Series C Stock that the Warrant could have been
exercised for prior thereto would have been convertible into, at an initial
exercise price of $.04 per share of Common Stock under the Series C-1 Warrants
and at initial exercise price of $.06 per share of Common Stock under the Series
C-2 Warrants.  The initial exercise prices are subject to adjustment
as set forth in the Warrants, forms of which are attached hereto as Exhibits 3.2
and 3.3 and are incorporated herein by reference.
 
 In
connection with the Purchase Agreement, the Registrant entered into a
Registration Rights Agreement (a copy of which is attached hereto as Exhibit
10.2 and incorporated herein by reference). Pursuant to the Registration Rights
Agreement, the Registrant is obligated to register for resale under the
Securities Act the shares of Common Stock issuable upon conversion of the Series
C Stock and exercise of the Warrants beginning by April 30, 2009.
 
 On August
19, 2008, the Registrant’s Board of Directors approved the grant, under the
Registrant’s Long-Term Incentive Plan, of an aggregate of 300,000 Incentive
Stock Options.  Such options were issued at an exercise price of
$0.012 per share and vest one-third (1/3) on each of the first three
anniversaries of the grant date.
 
 On August
19, 2008, the Company issued 1,200,000 shares as Board of Director compensation
for the year ended December 31, 2008. 800,000 of the shares were issued to Peter
Bordes and 400,000 of the shares were issued to Herbert Hunt.  The
shares were valued at $0.025 per share for a fair market value of
$30,000.  This compensation was accrued for in 2007.
 
 On August
19, 2008, the Company granted under our Long-Term Incentive Plan, an aggregate
of 500,000 Non-Qualified Stock Options (“NQOs”).  The NQOs were
granted to Christopher Blisard with respect to his service as a member of the
Board of Directors during 2009 and vest on December 31, 2009.  The
options were issued at an exercise price of $0.012 per share, representing the
closing price of the Company’s common stock on such date.
 
 18
 Index
   ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
  GENERAL
  Roomlinx,
Inc., a Nevada corporation ("We," "Us" or the "Company"), provides two core
products and services:
  1. Wired
networking solutions and Wireless Fidelity networking solutions, also known as
Wi-Fi, for high-speed internet access to hotels, convention centers, corporate
apartments and special events locations. The Company installs and creates
services that address the productivity and communications needs of hotel guests,
convention center exhibitors and corporate apartment customers. We specialize in
providing advanced Wi-Fi wireless services such as the wireless standards known
as 802.11a/b/g.
  Hotel
customers sign long-term service agreements, where we provide the maintenance
for the networks, as well as the right to provide value added services over the
network.
  We derive
our revenues primarily from the installation of the wired and wireless networks
we provide to hotels, convention centers and apartment buildings. We derive
additional revenue from the maintenance of these networks. Customers typically
pay a one-time fee for the installation of the network and then pay monthly
maintenance fees for the upkeep and support of the network. During March 1999,
we commenced offering our services commercially. Since our inception, we have
invested significant capital to build our technical infrastructure and network
operations.
  2.
In-room Media and Entertainment Solutions for hotels, resorts, and time-share
properties.  The Company develops software and integrates hardware to
facilitate the distribution of entertainment, business applications, national
and local advertising, and content.  The content consists of adult,
Hollywood, and specialty programming, music, internet based television
programming, digital global newspapers, global radio and television stations,
business applications (allowing the guest to use Microsoft Office programs), and
hotel specific services and advice.
  The
Company provides proprietary software an LCD television, a media console
(consisting of a DVD player, CD/DVD burner, and numerous input jacks for the
hotel guest), a wireless keyboard with built-in mouse, and a remote
control.
  The
Company installs and supports these components.
  Hotel
customers sign long-term service agreements, where we provide the maintenance
for the networks, as well as the right to provide value added services over the
network.
  We derive
our revenues primarily from charging the hotels a monthly fee for the usage of
our software and proprietary media and entertainment system. We derive
additional revenue from the rental of movies, printing service, advertising
and sale of products through our system.  We began marketing this
product in September of 2007. Since June of 2007, we have invested significant
capital to develop our software, integrate our hardware, and develop significant
product and content partnerships.
  19
 Index
   We have
incurred operating losses since our inception. We will need to increase our
installation and maintenance revenues and improve our gross margins to become
profitable and sustain profitability on a quarterly and annual
basis.  We recently completed development of our media and
entertainment solution and have commenced marketing it.  There is no
assurance that we will be successful in our efforts.  We are not able
to predict with any certainty when, if ever, we will attain profitable
operations.
  We
currently have our media and entertainment product installed into the Jet Hotel
in Downtown Denver as a pilot.  We have signed agreements to install
into select rooms, as pilots, with a select service property in the Denver
Technological Center, managed and owned by a large hotel corporation, and with a
full service hotel located in Chicago, IL, which is also owned by a large hotel
corporation.  We have signed an exclusive contract to provide our
media and entertainment and HSIA products and services to the Kessler Collection
of hotels, (www.kesslercollection.com).   We have signed
contracts to install into the Bohemian Resort Biltmore Village in Asheville, NC
and into select rooms of a Country Inn and Suites in Merryville, IN and
Lexington, KY.  We also have a signed contract to install 120 rooms of
a full service hotel in the Chicago, IL vicinity.
  CRITICAL
ACCOUNTING POLICIES AND ESTIMATES
  Management's
Discussion and Analysis of Financial Condition and Results of Operations discuss
our financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires management to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and
the related disclosures of contingent assets and liabilities. On an on-going
basis, management evaluates its estimates and judgments, including those related
to revenue recognition, allowance for doubtful accounts and property and
equipment valuation. Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions and conditions.
  Management
believes the following critical accounting policies, among others, affect its
more significant judgments and estimates used in the preparation of its
consolidated financial statements.
  Our
system sales and installation revenue primarily consists of wired and wireless
network equipment and installation fees associated with the network and is
recognized as revenue when the installation is completed and the customer has
accepted such installation. Our service, maintenance and usage revenue, which
primarily consists of monthly maintenance fees related to the upkeep of the
network, is recognized on a monthly basis as services are provided.
  20
 Index
   We
estimate the collectability of our trade receivables. A considerable amount of
judgment is required in assessing the ultimate realization of these receivables,
including analysis of historical collection rates and the current
credit-worthiness of significant customers.
  Work in
progress represents the cost of hardware and software which has been purchased
by us for installation at our customers’ facilities, but has not been accepted
by the customer.
  We
capitalize and subsequently depreciate our property and equipment over the
estimated useful life of the asset. In assessing the recoverability of our
long-lived assets, including goodwill, we must make certain assumptions
regarding the useful life and contribution to the estimated future cash flows.
If such assumptions change in the future, we may be required to record
impairment charges for these assets not previously recorded.
  Since
inception, we have accumulated substantial net operating loss carry forwards for
tax purposes.  There are statutory limitations on our ability to
realize any future benefit from these potential tax assets and we are uncertain
as to whether we will ever utilize the tax loss carry
forwards.  Accordingly, we have recorded a valuation allowance to
offset the deferred tax asset.
  Effective
January 1, 2006, we implemented SFAS No. 123(R), “Share-Based Payment,” which
requires us to provide compensation costs for our stock option plans determined
in accordance with the fair value based method prescribed in SFAS No.
123(R).  We estimate the fair value of each stock option at the grant
date by using the Black-Scholes option-pricing model and provide for expense
recognition over the service period, if any, of the stock option.
  In
connection with the sale of debt or equity instruments, we may sell options or
warrants to purchase our common stock. In certain circumstances, these options
or warrants may be classified as derivative liabilities, rather than as equity.
Additionally, the debt or equity instruments may contain embedded derivative
instruments, such as conversion options, which in certain circumstances may be
required to be bifurcated from the associated host instrument and accounted for
separately as a derivative instrument liability.
 
 The
identification of, and accounting for, derivative instruments is complex. Our
derivative instrument liabilities are re-valued at the end of each reporting
period, with changes in the fair value of the derivative liability recorded as
charges or credits to income, in the period in which the changes occur. For
options, warrants and bifurcated conversion options that are accounted for as
derivative instrument liabilities, we determine the fair value of these
instruments using the Cox-Ross-Rubinstein binomial option pricing model. That
model requires assumptions related to the remaining term of the instruments and
risk-free rates of return, our current common stock price and expected dividend
yield, and the expected volatility of our common stock price over the life of
the instruments.  The identification of, and accounting for,
derivative instruments and the assumptions used to value them can significantly
affect our financial statements.
  21
 Index
   FORWARD-LOOKING
STATEMENTS
  The
statements contained in this annual report (including our statements regarding
future revenue) that are not based on historical fact are "forward- looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. Forward- looking statements may be identified by the use of
forward-looking terminology such as "may," "will," "expect," "estimate,"
"anticipate," "continue," or similar terms, variations of such terms or the
negative of those terms. Such forward-looking statements involve risks and
uncertainties, including, but not limited to: (i) our history of unprofitable
operations, both with respect to our core business and the business previously
performed by Arc Communications, (ii) the significant operating losses that we
have incurred to date, (iii) our lack of liquidity and need for additional
capital which we may not be able to obtain on favorable terms or at all, (iv)
the "going concern" qualification that accompanies our financial statements,
which, among other things, may make it more difficult for us to raise the
additional capital that we require in order to remain in business, (v) the fact
that we have been required to operate with a working capital deficit, which
limits our operating flexibility and opportunities (vi) the substantially
greater resources available to many of our competitors, (vii) our expectation
that we will continue to operate at a loss for the foreseeable future, (viii)
our lack of capital, which substantially restricts our flexibility and
opportunity to increase our revenues, (ix) the importance to us that our
offerings remain technologically advanced if we are to attract new customers and
maintain existing customers, (x) our dependence on certain key employees and key
suppliers, (xi) risks associated with potential intellectual property claims and
(xii) the impact on our business and industry of general economic conditions and
regulatory developments. Such risks and others are more fully described in the
"Risk Factors" set forth in Exhibit 99.1 to this Annual Report. Our actual
results could differ materially from the results expressed in, or implied by,
such forward- looking statements.
  RESULTS
OF OPERATIONS
  YEAR
ENDED DECEMBER 31, 2007 COMPARED TO YEAR ENDED DECEMBER 31, 2006
  For the
year ended December 31, 2007, we reported net income of $403,555, or $0.00 per
share, compared to net income of $25,529, or $0.00 per share for
2006.  Our loss from operations for 2007 was $(744,042), a decline in
operating results of $(542,742) compared to the operating loss of $(201,300)
that we reported for 2006.  As discussed below, we began investing
significant capital in the design, production, and marketing of our new media
and entertainment product.  That increase in costs was a primary
factor in the results.
  22
 Index
   System sales and
installation revenue. System sales and installation revenue
increased 25% to $934,125 during the year ended December 31, 2007 from
$747,685 during the year ended December 31, 2006.  We installed 11 new
customers during the year ended December 31, 2007, compared to 11 new
installations during 2006, however, during the year ended December 31, 2007, the
average revenue per installation was approximately $84,920 as compared to
$67,971 during the prior year.  This component of our revenue stream
is dependent upon the acquisition of new customers, which can vary from year to
year.  Due to the nature of our business, revenue fluctuations may
also occur from time to time based on the size of the new installations during
the period.
  Service, maintenance and
usage revenue. Service, maintenance and usage revenue decreased 11%
to $1,307,125 for the year ended December 31, 2007 from $1,465,155 for the
year ended December 31, 2006. The decrease was due to a decrease in the number
of customers we service on a recurring basis to a total of 157 customers
(representing 27,350 rooms) compared to 188 customers (representing 34,197
rooms) as of December 31, 2006.  Average monthly revenue per room during
2007 was $3.98, compared to $3.57 during 2006, an increase of 11%.
  Cost of system sales and
installation. Cost of system sales and installation increased 44% to
$531,719 for the year ended December 31, 2007 from $368,156 for the year ended
December 31, 2006. The increase was primarily attributable to the increased
corresponding revenue during the year. The average cost of an installation
increased 30% from $33,468 in 2006 to $43,638 in 2006.  Our margin on
installations decreased to 43% in 2007 from 51% in 2006.
  Cost of service, maintenance
and usage. Cost of service, maintenance and usage decreased 6% to
$1,072,325 for the year ended December 31, 2007 from $1,137,489 for the year
ended December 31, 2006.  The decrease is mainly attributable to the
reduced number of rooms being supported.
  Sales and marketing.
Sales and marketing expense increased by $82,058 to $231,189 during the year
ended December 31, 2007 from $149,131 for the year ended December 31,
2006.  During 2007, we increased our sales force and began marketing
our new media and entertainment product.  Such measures included staff
additions resulting in increased personnel and personnel related costs of
$75,901; an increase in travel expenses of $4,550, and an increase in
advertising expense of $1,607.
  Product
Development.  In 2007, we created a new department to handle
the majority of the design, production, and promotion of our new media and
entertainment product.  This new department incurred costs of
$271,880.  This cost included $136,375 in labor and personnel expense;
$121,915 in equipment and licensing; $12,416 in travel costs; and $1,174 in
marketing costs.
  23
 Index
   Stock compensation.For the year ended December 31, 2007, the Company recorded $333,869 of
stock compensation compared to $204,848 for the year ended December 31,
2006.
  General and
administrative. General and administrative expense increased by $6,373 to
$532,539 for the year ended December 31, 2007 from $526,166 for the year ended
December 31, 2006. During 2007, personnel related costs increased $66,839;
office related costs such as rent, telephone, insurance and supplies increased
$11,572 professional fees, SEC fees, and investor relations fees were reduced by
$81,083; travel expenses were reduced by $408; and uncollectible debt increased
$9,453.
  Financing
expenses.  We incurred $252,207 in financing costs related to
the June 11, 2007 issuance of convertible debentures.  We also
incurred $150,000 of debt discount financing expense during 2007.
  Depreciation of property and
equipment. Depreciation of property and equipment decreased to $11,771
for the year ended December 31, 2007 as compared to $28,350 for the year ended
December 31, 2006.  This reduction is attributable to completely
depreciating some of the computer equipment.   Depreciation
expense is computed each year based upon our estimate of the remaining useful
lives of the assets.  Our estimates of useful lives are periodically
reviewed and the shorter of the actual life or the economic life of the assets
are used.
  Interest expense.
Interest expense decreased $190,002 or 51% to $183,567 for the year ended
December 31, 2007 as compared to $373,569 for the year ended December 31, 2006.
The decrease is attributable to the decrease in the principal balance of
outstanding debt due to the settlement and or payoff of notes payable and
convertible debentures, offset by the addition of the new, lower interest rate
convertible debentures.
  Foreign exchange gain
(loss). A portion of the Company’s business is denominated in Canadian
currency and the Company regularly converts Canadian denominated transactions
into US dollars.  Foreign transactions resulted in a loss of $11,540
for the year ended December 31, 2007 compared to a loss of $14,080 for the year
ended December 31, 2006. The amount of gain (loss) will vary based upon the
volume of foreign currency denominated transactions and fluctuations in the
value of the Canadian dollar vis-à-vis the US dollar.  It is not
expected that the foreign exchange gains (losses) will have a significant impact
on the Company in the future.
  Derivative Instruments
Expense, net.   Derivative instruments income of $252,681
represents the net unrealized (non-cash) change during the year ended December
31, 2007, in the fair value of our derivative instrument liabilities related to
certain embedded derivatives in our convertible debt that have been bifurcated
and accounted for separately.
  24
 Index
   LIQUIDITY
AND CAPITAL RESOURCES
  Since our
inception, we financed our operations primarily through private placements of
equity securities, convertible debentures and stockholder loans, which provided
aggregate net proceeds of approximately $10,040,000 through December 31,
2007.
  As of
December 31, 2007 we had $915,165 in cash and cash equivalents, which amount was
not sufficient to fund operating activities and continue investing in our new
media & entertainment product during 2008.  In July of 2008 we
sold $2,500,000 of Series C Preferred Stock, which amount is sufficient to fund
operating activities and continue investing in our new media and entertainment
product through 2009 and into 2010.  We expect to be dependent upon
other financing sources for the foreseeable future.  Management has
evaluated the Company's alternatives to enable it to pay its liabilities as they
become due and payable in the current year, reduce operating losses and obtain
additional or new financing in order to advance its business plan. Additional
alternatives being considered by management include, among other things,
obtaining financing from new lenders and the issuance of additional equity and
debt. If we raise additional capital through equity financing, such financing is
expected to be dilutive to existing stockholders. If we raise additional capital
through debt financing, such debt financing may require us to abide by
restrictive covenants and will likely be subject to conversion privileges which
will be dilutive to existing stockholders. We cannot provide any assurance that
we will be able to raise additional funds to enable our operations to continue
to the point were we will maintain a cash flow positive state. At this time, we
do not have any bank credit under which we may borrow funds for working capital
or other general corporate purposes.
  As of
December 31, 2007, we had working capital of $625,730, comprised of current
assets of $1,312,062 and current liabilities of $686,332.  Our working
capital deficit at December 31, 2006 was $(2,679,949).  Our working
capital position improved during the year primarily because of our settlement of
debt and subsequent funding.
 
 Net cash
used by operating activities was $515,459 for the year ended December 31, 2007
as compared to $73,716 for the year ended December 31, 2006.
 
 Net cash
used by investing activities was $48,813 for the year ended December 31, 2007 as
compared to $0 during the year ended December 31, 2006.  During 2007,
we invested $48,813 in expenditures for capital assets, as compared to $0 during
2006.
 
 Net cash
provided by financing activities was $1,334,897 for the year ended December 31,
2007 as compared to $37,500 for the year ended December 31,
2006.  During 2007, we received cash proceeds of $2,300,000 from the
issuance of convertible debentures.  We used a portion of these
proceeds to settle the debt outstanding on the previous convertible debentures
($550,000) and other notes payable ($277,500).  The cash required by
these settlements was $965,103.  During 2006, we received cash
proceeds from a bridge note and a shareholder loan, in the aggregate amount of
$157,500, and used cash of $120,000 for principle payments.
  25
 Index
   Several
years ago, the Company entered into a series of capital lease transactions with
a third party lessor in Canada.  The Company ceased making payments to
the lessor and abandoned the assets under capital leases.  The lessor
has not demanded that the Company make additional payments and the Company
believes that it has meritorious defenses against any claims by the
lessor.  The Company has attempted to negotiate a settlement with the
lessor but has been unable to obtain an unconditional release.  During
2007, the Company wrote off the remaining liability on the leases in the amount
of $418,418.
 
 As of
December 31, 2007, our primary financial commitments consisted of $2,787,684
recorded as current and long-term liabilities plus future obligations under
operating leases.  Total future payments under operating leases were
$167,350 at December 31, 2007, including $56,511 due during 2008.
 
 On July
31, 2008 we entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with an investor group, and certain affiliated trusts (collectively,
the “Investors”), pursuant to which we simultaneously sold and issued to the
Investors an aggregate of $2,500,000 of Series C Preferred Stock (“Series C
Stock”).  In connection with the Purchase Agreement, the Registrant
also issued Warrants to the Investors for the purchase of additional shares of
Series C Stock or Common Stock and entered into a Registration Rights Agreement
with the Investors.
 
 Each
share of Series C Stock is convertible into such number of shares of Common
Stock as is determined by dividing $2,500 by the initial conversion price of
$0.025 per share (or 100,000 shares of Common Stock for each share of Series C
Stock converted). However, the Series C Stock is not convertible into Common
Stock until such time as the Company has a sufficient number of shares of Common
Stock authorized to permit the conversion of all of the Series C Stock into
Common Stock, at which time the Series C Stock will automatically convert into
Common Stock.
 
 The
Series C Stock accrues dividends at an annual rate of 6% per year, payable
quarterly, either in cash or, at the Registrant’s election, shares of the
Registrant’s capital stock.  There are no redemption rights associated
with the Series C Stock.  Each holder of Series C stock is entitled to
voting rights on an “as converted” to Common Stock basis together with the
holders of Common Stock.
 
 Pursuant
to the Purchase Agreement, the Investors also received (i) Series C-1 Warrants
to purchase an aggregate of 200 shares of Series C Stock, at an initial exercise
price of $4,000 per share of Series C Stock, and (ii) Series C-2 Warrants to
purchase an aggregate of 200 shares of Series C Stock, at an initial exercise
price of $6,000 per share of Series C Stock.  The Warrants are
immediately exercisable and expire on the third anniversary of their date of
issuance.  At such time as the Company has a sufficient number of
shares of Common Stock authorized to permit the conversion of all Series C Stock
into Common Stock, each Warrant will no longer be exercisable for shares of
Series C Stock but instead will be exercisable for the number of shares of
Common Stock into which the Series C Stock that the Warrant could have been
exercised for prior thereto would have been convertible into, at an initial
exercise price of $.04 per share of Common Stock under the Series C-1 Warrants
and at initial exercise price of $.06 per share of Common Stock under the Series
C-2 Warrants.  The initial exercise prices are subject to adjustment
as set forth in the Warrants, forms of which are attached hereto as Exhibits 3.2
and 3.3 and are incorporated herein by reference.
  26
 Index
   In
connection with the Purchase Agreement, the Registrant entered into a
Registration Rights Agreement (a copy of which is attached hereto as Exhibit
10.2 and incorporated herein by reference). Pursuant to the Registration Rights Agreement,
the Registrant is obligated to register for resale under the Securities Act the
shares of Common Stock issuable upon conversion of the Series C Stock and
exercise of the Warrants beginning by April 30, 2009.
  27
 Index
   
  REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Shareholders
and Board of Directors
 Roomlinx,
Inc.
 
 We have
audited the accompanying consolidated balance sheet of Roomlinx, Inc. as of
December 31, 2007, and the related consolidated statements of income,
stockholders' (deficit), and cash flows for the years ended December 31, 2007
and 2006.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Roomlinx, Inc. as of December 31,
2007, and the results of its operations, and its cash flows for the years ended
December 31, 2007 and 2006, in conformity with accounting principles generally
accepted in the United States of America.
 
 
 
  Denver,
Colorado
 September
29, 2008
  28
 Index
   ITEM 7. FINANCIAL STATEMENTS
  Roomlinx,
      Inc.CONSOLIDATED BALANCE
      SHEETas
      of December 31, 2007ASSETSCurrent
      assets:Cash
      and cash equivalents
                
                $
                915,165Accounts
      receivable, net
                
                
                358,794Prepaid
      and other current assets
                
                
                37,721Work
      in progress
                
                
                382Total
      current assets
                
                
                1,312,062Property
      and equipment, net
                
                
                49,822Total
      assets
                
                $
                1,361,884LIABILITIES AND
      STOCKHOLDERS' (DEFICIT)Current
      liabilities:Accounts
      payable and accrued expenses
                
                $
                399,782Officer
      and stockholder notes payable
                
                
                12,500Accrued
      interest
                
                
                35,926Deferred
      revenue
                
                
                238,124Total
      current liabilities
                
                
                686,332Convertible
      debentures
                
                
                2,101,352Stockholders'
      (deficit):Preferred
      stock - $0.20 par value, 5,000,000 shares authorized:Class
      A - 720,000 shares authorized, issued and outstanding
                
                
                144,000Series
      B - 2,000,000 shares authorized; none issued or
outstanding
                
                
                -Common
      stock - $0.001 par value, 245,000,000 shares authorized:149,068,107
      shares issued and outstanding
                
                
                149,068Additional
      paid-in capital
                
                
                19,920,259Deferred
      stock compensation
                
                
                (59,335
                )Accumulated
      (deficit)
                
                
                (21,579,792
                )Total
      stockholders' (deficit)
                
                
                (1,425,800
                )Total
      liabilities and stockholders' (deficit)
                
                $
                1,361,884
   The
accompanying notes are an integral part of these consolidated financial
statements.
 29
 Index
   Roomlinx,
      Inc.CONSOLIDATED
      STATEMENTS OF INCOMEfor
      the Years ended December 31, 2007 and 20062007
                
                
                2006RevenuesSystem
      sales and installation
                
                $
                934,125
                
                
                $
                747,685Service,
      maintenance and usage
                
                
                1,307,125
                
                
                
                1,465,1552,241,250
                
                
                
                2,212,840Costs
      and expensesSystem
      sales and installation
                
                
                531,719
                
                
                
                368,156Service,
      maintenance and usage
                
                
                1,072,325
                
                
                
                1,137,489Sales
      and marketing
                
                
                231,189
                
                
                
                149,131Product
      development
                
                
                271,880
                
                
                
                -Stock
      option compensation
                
                
                333,869
                
                
                
                204,848General
      and administrative
                
                
                532,539
                
                
                
                526,166Depreciation
                
                
                11,771
                
                
                
                28,3502,985,292
                
                
                
                2,414,140Operating
      income (loss)
                
                
                (744,042
                )
                
                
                (201,300
                )Other
      income (expense)Interest
      expense
                
                
                (183,567
                )
                
                
                (373,569
                )Financing
      expense
                
                
                (402,207
                )
                
                
                -Derivative
      income
                
                
                252,681
                
                
                
                -Foreign
      currency gain (loss)
                
                
                (11,540
                )
                
                
                (14,080
                )Other
      income
                
                
                20,108
                
                
                
                814Income
      from discharge of indebtedness
                
                
                1,472,122
                
                
                
                613,6641,147,597
                
                
                
                226,829Income
      before income taxes
                
                
                403,555
                
                
                
                25,529Provision
      for income taxes
                
                
                -
                
                
                
                -Net
      income
                
                $
                403,555
                
                
                $
                25,529Net
      income per common share:Basic
                
                $
                0.00
                
                
                $
                0.00Diluted
                
                $
                0.00
                
                
                $
                0.00Weighted
      average shares outstanding:Basic
                
                
                143,337,901
                
                
                
                133,462,902Diluted
                
                
                260,189,054
                
                
                
                176,975,870
   30
 Index
   Roomlinx,
      Inc.CONSOLIDATED
      STATEMENTS OF CASH FLOWSfor
      the Years ended December 31, 2007 and 20062007
                
                
                2006Cash
      flows from operating activities:Net
      income
                
                $
                403,555
                
                
                $
                25,529Adjustments
      to reconcile net income to net cashused
      by operating activities:Depreciation
                
                
                11,771
                
                
                
                28,350Amortization
      of debt discount
                
                
                150,000
                
                
                
                -Income
      from discharge of indebtedness
                
                
                (1,472,122
                )
                
                
                (613,664
                )Derivative
      income
                
                
                (252,681
                )
                
                
                -Common
      stock issued for operating costs
                
                
                -
                
                
                
                140,000Common
      stock and options issued as compensation
                
                
                240,947
                
                
                
                204,848Non
      cash interest expense
                
                
                135,151
                
                
                
                -Warrants
      issued as compensation
                
                
                220,799
                
                
                
                -Changes
      in operating assets and liabilities:Accounts
      receivable
                
                
                128,289
                
                
                
                (376,456
                )Inventory
      and work in progress
                
                
                29,073
                
                
                
                (29,455
                )Prepaid
      and other current assets
                
                
                (13,332
                )
                
                
                14,460Accounts
      payable and accrued expenses
                
                
                (151,806
                )
                
                
                (104,781
                )Deferred
      revenue
                
                
                (73,688
                )
                
                
                294,743Accrued
      interest
                
                
                101,526
                
                
                
                266,900Obligations
      under capital lease
                
                
                27,059
                
                
                
                75,810Total
      adjustments
                
                
                (919,014
                )
                
                
                (99,245
                )Net
      cash used by operating activities
                
                
                (515,459
                )
                
                
                (73,716
                )Cash
      flows from investing activities:Purchase
      of property and equipment
                
                
                (48,813
                )
                
                
                -Net
      cash used by investing activities
                
                
                (48,813
                )
                
                
                -Cash
      flows from financing activities:Cash
      proceeds from convertible debentures
                
                
                2,300,000
                
                
                
                -Principal
      payments on convertible debenture
                
                
                (550,000
                )
                
                
                -Cash
      proceeds from notes payable
                
                
                -
                
                
                
                150,000Principal
      payments on notes payable
                
                
                (277,500
                )
                
                
                (120,000
                )Cash
      proceeds from officer and stockholder notes payable
                
                
                -
                
                
                
                7,500Principal
      payments on officer and stockholder notes payable
                
                
                (137,603
                )
                
                
                -Net
      cash provided by financing activities
                
                
                1,334,897
                
                
                
                37,500Net
      increase in cash and equivalents
                
                
                770,625
                
                
                
                (36,216
                )Cash
      and equivalents at beginning of year
                
                
                144,540
                
                
                
                180,756Cash
      and equivalents at end of year
                
                $
                915,165
                
                
                $
                144,540Supplemental
      Cash Flow InformationInterest
      paid
                
                $
                16,603
                
                
                $
                18,393Income
      taxes paid
                
                $
                -
                
                
                $
                -Non-cash
      investing and financing activities:Warrants
      issued in connection with debt
                
                $
                -
                
                
                $
                150,000Notes
      payable converted to convertible debentures
                
                $
                50,000
                
                
                $
                -Accounts
      payable and accrued expenses forgiven
                
                $
                9,012
                
                
                $
                -Shareholder
      payables forgiven
                
                $
                3,000
                
                
                $
                -Convertible
      debt forgiven
                
                $
                550,000
                
                
                $
                -Notes
      payable forgiven
                
                $
                37,500
                
                
                $
                -Interest
      and penalties forgiven
                
                $
                457,192
                
                
                $
                -Shareholder
      interest and penalties forgiven
                
                $
                104,553
                
                
                $
                -Capital
      lease forgiven
                
                $
                418,418
                
                
                $
                -Shareholder
      notes forgiven
                
                $
                137,397
                
                
                $
                -
   31
 Index
   Roomlinx,
      Inc.CONSOLIDATED
      STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)For
      the years ended December 31, 2007 and 2006Preferred Stock
                
                
                Common Stock
                
                
                
                
                
                Additional
                
                
                Deferred
                
                
                
                
                
                TotalNumber
      of
                
                
                
                
                
                Number
      of
                
                
                
                
                
                Paid
      - in
                
                
                Stock
                
                
                Accumulated
                
                
                Stockholders'Shares
                
                
                Amount
                
                
                Shares
                
                
                Amount
                
                
                Capital
                
                
                Compensation
                
                
                (Deficit)
                
                
                (Deficit)Balance,  December
      31, 2005
                
                
                720,000
                
                
                $
                144,000
                
                
                
                132,868,381
                
                
                $
                132,868
                
                
                $
                18,544,462
                
                
                $
                -
                
                
                $
                (22,008,876
                )
                
                $
                (3,187,546
                )Shares
      issued as board compensation at $0.02 per share
                
                
                
                7,000,000
                
                
                
                7,000
                
                
                
                133,000
                
                
                
                -
                
                
                
                -
                
                
                
                140,000Fair
      value of beneficial conversion  feature andwarrants
      issued in connection withnotes
      payable
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                150,000
                
                
                
                -
                
                
                
                -
                
                
                
                150,000Options
      granted at $0.02 per share
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                308,105
                
                
                
                (103,257
                )
                
                
                -
                
                
                
                204,848Net
      income
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                25,529
                
                
                
                25,529Balance,  December
      31, 2006
                
                
                720,000
                
                
                
                144,000
                
                
                
                139,868,381
                
                
                
                139,868
                
                
                
                19,135,567
                
                
                
                (103,257
                )
                
                
                (21,983,347
                )
                
                
                (2,667,169
                )Shares
      issued for services at $0.03 per share
                
                
                -
                
                
                
                -
                
                
                
                7,500,000
                
                
                
                7,500
                
                
                
                217,500
                
                
                
                -
                
                
                
                -
                
                
                
                225,000Shares
      issued for interest at $0.02 per share
                
                
                -
                
                
                
                -
                
                
                
                1,699,726
                
                
                
                1,700
                
                
                
                32,295
                
                
                
                -
                
                
                
                -
                
                
                
                33,995Options
      granted at  $0.025 per share
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                47,840
                
                
                
                (31,893
                )
                
                
                -
                
                
                
                15,947Options
      granted at  $0.015 per share
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                21,308
                
                
                
                (21,308
                )
                
                
                -
                
                
                
                -Warrants
      granted at $0.02 per share
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                66,415
                
                
                
                -
                
                
                
                -
                
                
                
                66,415Warrants
      granted at $0.03 per share
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                154,384
                
                
                
                -
                
                
                
                -
                
                
                
                154,384Amortization
      of deferred compensation
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                97,123
                
                
                
                -
                
                
                
                97,123Discharge
      of related party debt
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                244,950
                
                
                
                -
                
                
                
                -
                
                
                
                244,950Net
      income
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                403,555
                
                
                
                403,555Balance,  December
      31, 2007
                
                
                720,000
                
                
                $
                144,000
                
                
                
                149,068,107
                
                
                $
                149,068
                
                
                $
                19,920,259
                
                
                $
                (59,335
                )
                
                $
                (21,579,792
                )
                
                $
                (1,425,800
                )
    32
 Index
   ROOMLINX,
INC.
 Notes
to Consolidated Financial Statements
 December
31, 2007
  1.
              Overview
      and Summary of Significant Accounting
Policies
  Description of
Business:    Roomlinx, Inc. (the “Company”) is
incorporated under the laws of the state of Nevada.  The Company
sells, installs and services hardware for wired networking solutions and
wireless fidelity networking solutions, also known as Wi-Fi, for high-speed
internet access to hotels, convention centers, corporate apartments and special
events locations. The Company installs and creates services that address the
productivity and communications needs of hotel guests, convention center
exhibitors, corporate apartment customers and individual consumers. The Company
utilizes third party contractors to install such hardware and
software.
 
 Basis of
Consolidation:    The consolidated financial
statements include the accounts of the Company and its wholly owned subsidiary,
SuiteSpeed, Inc.  All significant intercompany accounts and
transactions have been eliminated in consolidation.
  Reclassification:    Certain
amounts in the 2006 financial statements have been reclassified to conform to
the current year presentation.  There is no effect on previously
reported net income or earnings per share.
 
 Cash and Cash
Equivalents:    The Company considers cash in banks,
deposits in transit, and highly-liquid debt instruments purchased with original
maturities of three months or less to be cash and cash equivalents.
  Inventory:    Inventory,
principally wireless devices related to Wi-Fi installations, is stated at the
lower of cost (first-in, first-out) basis or market.  Inventory is
recorded net of any reserve for excess and obsolescence.
 
 Work in
Progress:Work in progress represents the cost of
wireless equipment and third party installation related to installations which
were not completed prior to year-end.
 
 Property and
Equipment:    All items of property and equipment are
carried at cost not in excess of their estimated net realizable value. Normal
maintenance and repairs are charged to earnings, while expenditures for major
maintenance and betterments are capitalized. Gains or losses on disposition are
recognized in operations.
  Depreciation:    Depreciation
of property and equipment is computed using straight-line methods over the
estimated economic lives, as follows:
 
 Leasehold
      improvements
              4
      yearsOffice
      furniture and equipment
              5
      to 7 yearsComputer
      hardware and software
              3
      to 5 years
 
 33
 Index
 
 Stock Option
Plans:    Effective January 1, 2006, the Company
implemented SFAS No. 123(R), “Share-Based Payments,” which requires us to
provide compensation costs for our stock option plans determined in accordance
with the fair value based method prescribed in SFAS No. 123(R).  We
estimate the fair value of each stock option at the grant date by using the
Black-Scholes option-pricing model and provide for expense recognition over the
service period, if any, of the stock option.
 
 Per Share
Amounts:    The Company computes net income per share
under the provisions of SFAS No. 128, “Earnings per Share” (SFAS
128).  Under the provisions of SFAS 128, basic net income per share is
computed by dividing the Company’s net income for the period by the
weighted-average number of shares of common stock outstanding during the
period.  Diluted net income per share excludes potential common shares
if the effect is anti-dilutive.  Diluted net income (loss) per share
is determined in the same manner as basic net income per share except that the
number of shares is increased assuming exercise of dilutive stock options and
warrants using the treasury stock method and shares issuable upon conversion of
convertible debt and adding back to net income the related interest
expense.
  Income
Taxes:    The Company accounts for income taxes under
SFAS 109, "Accounting for Income Taxes". Temporary differences are
differences between the tax basis of assets and liabilities and their reported
amounts in the financial statements that will result in taxable or deductible
amounts in future years. Under this method, deferred tax assets and liabilities
are determined based on differences between financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse. A valuation
allowance is recorded when the ultimate realization of a deferred tax asset is
considered to be unlikely.
  Use of
Estimates:    The preparation of the Company's
consolidated financial statements in conformity with generally accepted
accounting principles requires the Company's management to make estimates and
assumptions that affect the amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
  Revenue
Recognition:    Revenue is recognized when all
applicable recognition criteria have been met, which generally include (a)
persuasive evidence of an existing arrangement; (b) fixed or determinable price;
(c) delivery has occurred or service has been rendered; and (d) collectability
of the sales price is reasonably assured.
 
 The
Company derives its revenue from the sale and installation of Wi-Fi wireless
networking solutions and from service, maintenance, and usage.  Sales
and installation revenue is recognized upon delivery, installation and customer
acceptance.  Revenue from installations in progress is deferred until
the installation is complete.  Service and maintenance contract
revenue is recognized ratably over the contractual period.  Usage fees
are recognized under specific customer contracts as services are
rendered.
  34
 Index
   Deferred
Revenue:    Deferred revenue is primarily comprised
of advanced billings and customer deposits for installations, service and
usage.
  Fair Value of Financial
Instruments:    SFAS 107, "Disclosures About
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments. Fair value estimates discussed herein
are based upon certain market assumptions and pertinent information available to
management as of December 31, 2007.
  The
respective carrying values of certain on-balance-sheet financial instruments
approximate their fair values. These financial instruments include cash and cash
equivalents, accounts receivable, accounts payable and accrued expenses, notes
payable, and convertible debentures. Fair values were assumed to
approximate carrying values for these financial instruments since they are
either short term in nature and their carrying amounts approximate fair value,
or they are receivable or payable on demand, or they bear appropriate interest
rates.
  Concentration of Credit
Risk:    The Company's operating cash balances are
maintained in financial institutions and periodically exceed federally insured
limits.   To date, these concentrations of credit risk have not
had a significant impact on the Company’s financial position or results of
operations.
 
 Accounts
Receivable:    Accounts receivables are
uncollateralized customer obligations due under normal trade terms requiring
payment within 30 days from the invoice date. Accounts receivable are stated at
the amount billed to the customer. Interest at a rate of 18% per annum is billed
on the 1st of the
month on delinquent customers. Accounts receivable in excess of 30 days old are
considered delinquent.  Outstanding customer invoices are periodically
assessed for collectability.
 
 The
carrying amount of accounts receivable is reduced by a valuation allowance that
reflects the Company's best estimate of the amounts that may not be collected.
This estimate is based on an assessment of current creditworthiness and payment
history.  Our review of the outstanding balances as of December 31,
2007 indicated that a valuation allowance was required.  The gross
accounts receivable balance was reduced by $59,840 for doubtful
collections.
 
 At
December 31, 2007, four customers accounted for 38% of the accounts receivable
balance.  These amounts were collected subsequent to December 31,
2007.
  Foreign
Operations:    The Company operates in the United
States of America and in Canada.  As with all types of international
business operations, currency fluctuations, exchange controls, restrictions on
foreign investment, changes to tax regimes, and political action could impact
the Company's financial condition or results of operations.
  35
 Index
  Foreign Currency
Translation:   The US Dollar is the functional
currency of the Company. Assets and liabilities denominated in foreign
currencies are re-measured into US Dollars and the resulting gains and (losses)
are included in the consolidated statement of operations as a component of other
income (expense).
 
 Advertising
Costs:   Advertising costs are expensed as
incurred.  During 2007 and 2006, advertising costs were $3,125 and
$1,518, respectively.
 
 Segments:   The
Company applies SFAS No. 131, “Disclosures about Segments of an Enterprise
and Related Information,” and considers its business activities to constitute a
single segment.
 
 Derivative financial
instruments:We do not use derivative instruments to hedge
exposures to cash flow, market, or foreign currency risks.
 
 We review
the terms of convertible debt instruments we issue to determine whether there
are embedded derivative instruments, including the embedded conversion option,
that are required to be bifurcated and accounted for separately as a derivative
financial instrument. In circumstances where the convertible instrument contains
more than one embedded derivative instrument, including the conversion option,
that is required to be bifurcated, the bifurcated derivative instruments are
accounted for as a single, compound derivative instrument. Also, in connection
with the sale of convertible debt, we may issue freestanding options or warrants
that may, depending on their terms, be accounted for as derivative instrument
liabilities, rather than as equity. We may also issue options or warrants to
non-employees in connection with consulting or other services they
provide.
 
 When the
ability to physical or net-share settle the conversion option or the exercise of
the freestanding options or warrants is deemed to be not within the control of
the company or if the conversion option, options or warrants are not indexed
only to the underlying common stock, the embedded conversion option or
freestanding options or warrants may be required to be accounted for as a
derivative financial instrument liability.
 
 Derivative
financial instruments are initially measured at their fair value. For derivative
financial instruments that are accounted for as liabilities, the derivative
instrument is initially recorded at its fair value and is then re-valued at each
reporting date, with changes in the fair value reported as charges or credits to
income. For option-based derivative financial instruments, we use the
Cox-Ross-Rubinstein binomial model to value the derivative
instruments.  To the extent that the initial fair values of the
freestanding and/or bifurcated derivative instrument liabilities exceed the
total proceeds received, an immediate charge to income is recognized, in order
to initially record the derivative instrument liabilities at their fair
value.
 
 The
discount from the face value of the convertible debt instruments resulting from
allocating some or all of the proceeds to derivative instruments, together with
the stated interest on the instrument, is amortized over the life of the
instrument through periodic charges to income, using the effective interest
method.
  36
 Index
  Certain
instruments, including convertible debt and freestanding options or warrants
issued, may be subject to registration rights agreements, which may impose
penalties for failure to register the underlying common stock by a defined
date.  Any such penalties are accounted for in accordance with FAS 5
and are accrued when they are deemed probable.
 The
classification of derivative instruments, including whether such instruments
should be recorded as liabilities or as equity, is re-assessed periodically,
including at the end of each reporting period. If re-classification is required,
the fair value of the derivative instrument, as of the determination date, is
re-classified. Any previous charges or credits to income for changes in the fair
value of the derivative instrument are not reversed. Derivative instrument
liabilities are classified in the balance sheet as current or non-current based
on whether or not net-cash settlement of the derivative instrument could be
required within 12 months of the balance sheet date.
 
 Recent Pronouncements:    Various standard setting bodies have issued
accounting pronouncements that have not yet been adopted by the
Company.  A brief discussion of the pronouncement is presented in the
following paragraphs.  The Company is currently evaluating the
potential future impact on its financial statements from the implementation of
these new standards.
 
 In
February 2008, the Financial Accounting Standards Board (FASB) issued FASB
Staff Position (FSP) FSP No. 157-2, “Effective Date of FASB Statement
No. 157” (FSP No. 157-2). FSP No. 157-2 defers the effective date
of SFAS No. 157 to fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years, for all nonfinancial assets and
liabilities, except those that are recognized or disclosed at fair value in the
financial statements on a recurring basis (at least annually). Examples of items
within the scope of FSP No. 157-2 are nonfinancial assets and nonfinancial
liabilities initially measured at fair value in a business combination (but not
measured at fair value in subsequent periods), and long-lived assets, such as
property, plant and equipment and intangible assets measured at fair value for
an impairment assessment under SFAS No. 144, “Accounting for the Impairment
or Disposal of Long-Lived Assets.”
  In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities (“SFAS 159”). Under this standard, an
entity is required to provide additional information that will assist investors
and other users of financial information to more easily understand the effect of
the company’s choice to use fair value on its earnings. Further, the entity is
required to display the fair value of those assets and liabilities for which the
company has chosen to use fair value on the face of the balance sheet. This
standard does not eliminate the disclosure requirements about fair value
measurements included in SFAS 157 and SFAS No. 107, Disclosures about Fair
Value of Financial Instruments. SFAS 159 is effective for fiscal years beginning
after November 15, 2007. Management is currently evaluating the
requirements of SFAS 159 and has not yet determined the impact on its financial
statements.
  37
 Index
   In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
Combinations (“SFAS 141R”). This statement replaces SFAS 141, Business
Combinations. The statement provides guidance for how the acquirer recognizes
and measures the identifiable assets acquired, liabilities assumed and any
non-controlling interest in the acquiree. SFAS 141R provides for how the
acquirer recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase. The statement determines what
information to disclose to enable users to be able to evaluate the nature and
financial effects of the business combination. The provisions of SFAS 141R
are effective as of January 1, 2009 and do not allow early adoption.
Management is currently evaluating the impact of adopting this
statement.
  In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests
in Consolidated Financial Statements (SFAS 160), which becomes effective on
January 1, 2009. This standard establishes accounting and reporting
standards for ownership interests in subsidiaries held by parties other than the
parent, the amount of consolidated net income attributable to the parent and to
the noncontrolling interest, changes in a parent’s ownership interest and the
valuation of retained non-controlling equity investments when a subsidiary is
deconsolidated. The Statement also establishes reporting requirements that
provide sufficient disclosures to clearly identify and distinguish between the
interests of the parent and the interests of the non-controlling owners.
Management is currently evaluating the impact of adopting this
statement.
  In March
2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities – an Amendment of FASB Statement No. 133
(SFAS 161), which becomes effective on November 15, 2008. This standard changes
the disclosure requirements for derivative instruments and hedging
activities.  Entities are required to provide enhanced disclosures
about (a) how and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under SFAS 133 and its
related interpretations, and (c) how derivative instruments and related hedged
items affect an entity’s financial position, financial performance, and cash
flows.  Management is currently evaluating the impact of adopting this
statement.
 
 In April
2008, the FASB issued FASB Staff Position (FSP) FSP 142-3, “Determination of the
Useful Life of Intangible Assets.” This FSP amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under FASB Statement No. 142,
“Goodwill and Other Intangible Assets.” The intent of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under
Statement 142 and the period of expected cash flows used to measure the fair
value of the asset under FASB Statement No. 141 (Revised 2007), “Business
Combinations,” and other U.S. generally accepted accounting principles (GAAP).
This FSP is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and interim periods within those fiscal years.
Early adoption is prohibited.  The Company does not expect the adoption of
FAS 142-3 to have a material effect on its results of operations and financial
condition.
  38
 Index
   In May
2008, the FASB issued FASB Staff Position (FSP) No. APB 14-1 “Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)” (FSP APB 14-1). FSP APB 14-1
requires the issuer of certain convertible debt instruments that may be settled
in cash (or other assets) on conversion to separately account for the liability
(debt) and equity (conversion option) components of the instrument in a manner
that reflects the issuer’s non-convertible debt borrowing rate. FSP
APB 14-1 is effective for fiscal years beginning after December 15,
2008 on a retroactive basis and will be adopted by the Company in the first
quarter of fiscal 2009. The Company does not expect the adoption of FSP APB 14-1
to have a material effect on its results of operations and financial
condition.
 
 In May
2008, the FASB issued SFAS No. 162, The Hierarchy of Generally
Accepted Accounting Principles (SFAS 162), which becomes effective upon approval
by the SEC. This standard sets forth the sources of accounting principles and
provides entities with a framework for selecting the principles used in the
preparation of financial statements that are presented in conformity with
GAAP.  It is not expected to change any of our current accounting
principles or practices and therefore, is not expected to have a material impact
on our financial statements.
 
 2.
              Property
      and Equipment
 
 At
December 31, 2007, property and equipment consisted of the
following:
  Computer
      equipment and software
              
              $
              340,470Leasehold
      improvements, office furniture and equipment
              
              
              38,817Subtotal
              
              
              379,287Accumulated
      depreciation
              
              
              (329,465
              )Total
              
              $
              49,822
 
 Depreciation
expense for the years ended December 31, 2007 and 2006 was $11,771 and $28,350,
respectively.
 
 3.
              Officer
      and Stockholder Notes Payable
 
 From
November 2004 through January 2005, the Company received proceeds of $320,000 in
exchange for 10% promissory notes maturing six months from the date of
issuance.  During 2005, the Company repaid $40,000 of the
notes.  The Company was not able to retire the remaining balance of
the promissory notes as scheduled and was in default of the repayment
terms.  During 2007, interest and penalties of $104,553 and principal
of $137,397 were forgiven, and the notes were settled for $142,603, of which
$12,500 was paid subsequent to December 31, 2007.
 
 On August
11, 2006, the Company borrowed $7,500 from Peter Bordes.  Principal
and interest at 10% were due upon receipt of funding.  The note was
repaid in June, 2007.
  39
 Index
   4.
              Notes
      Payable
 
 As part
of the SuiteSpeed merger, Roomlinx assumed a $300,000 promissory note payable to
the First National Bank of Colorado; the note bore interest at the rate of the
prime plus 1% and was payable in monthly principal installments of $10,000 with
the entire remaining balance due on or before September 1, 2006.  The
due date of the note was subsequently extended. The balance of the note was
$140,000 as of January 1, 2007, and the note was paid in full on June 12,
2007.
 
 During
2005, the Company borrowed $75,000 from an individual.  The borrowing
bore interest at 10% and was due on demand.  In June of 2007, interest
and penalties of $12,228 were forgiven, and the note was settled for
$37,500.
 
 On
December 28, 2006 the Company issued three bridge notes in the principal amounts
of $50,000 each, and 3 warrants to purchase 1.3 million shares of common stock
to each lender with an exercise price of $0.03 per share.  On June 10,
2007, two of the three bridge notes were paid back in full, and one of them
converted into the convertible debentures dated June 11, 2007.
 
 5.
              Convertible
      Debentures
 
 On June
11, 2007 and June 13, 2007, we sold an aggregate of $2,350,000 principal amount
of Convertible Debentures due May 2012 (the “Convertible Debentures”) to a
number of investors in reliance on Section 4(2) of the Securities Act, and
pursuant to a Securities Purchase Agreement with certain investors (the “June
Purchase Agreement”).  $2,300,000 of the debentures were purchased
with cash and $50,000 was converted from a note payable.
 
 The
Convertible Debentures are initially convertible into Series B Preferred Stock,
which Series B Preferred Stock will not be convertible into Common Stock until
such time as the Company has sufficient number of shares of Common Stock
authorized to permit the conversion of the Convertible Debentures into Common
Stock, at which time the Convertible Debentures will automatically be
convertible into Common Stock and not Series B Preferred Stock.  The
conversion price into shares of Common Stock of the Convertible Debentures is
$0.02 per share, subject to certain standard anti-dilution
adjustments.  In the event that the Convertible Debentures are not
repaid when due, the conversion price will be reduced to $0.01 per
share.  Because this potential reduction in the conversion price
effectively indexes the return to the investors to a factor other than the
underlying value of our common stock, the embedded conversion option has been
bifurcated and accounted for separately as a derivative instrument
liability.
 
 Pursuant
to the June Purchase Agreement, each purchaser also received an option,
exercisable for a six month period from the Closing under the Purchase
Agreement, to purchase additional Convertible Debentures (“Additional
Convertible Debentures”) in an amount up to 50% of the original amount of
Convertible Debentures purchased.  This option has also been accounted
for as a derivative instrument liability.  All such options have
expired unexercised.
  40
 Index
   The
Convertible Debentures bear interest at an annual rate of 6%, payable quarterly,
either in cash or, at the Company’s election, in shares of our capital stock at
two and one-half cents ($.025) per share of common stock or a 10% discounted
stock price from the average market price for the 20 business days preceding the
interest payment date, whichever is greater.  As of October 6, 2008,
interest has been settled in shares of our common stock.
 
 Pursuant
to the terms of the June Purchase Agreement, we are obligated to register the
shares of Common Stock issuable on conversion of the Convertible Debentures
within one year of the Closing under the June Purchase Agreement or as soon as
our Common Stock is listed on the Over-the-Counter Bulletin Board, whichever is
sooner.  The June Purchase Agreement does not provide for any specific
penalties for not complying with this requirement, which has not yet been
met.  At December 31, 2007, the Company has not accrued any penalties
that may ultimately be paid, as it does not believe any penalties are probable
as of that date.
 
 On March
3, 2005, the Company completed a privately placed bridge financing of
convertible debentures (“Debentures”) and warrants.  The Debentures
were issued in the aggregate principal amount of $1,100,000 to 17 investors;
bore interest at 11% per annum; and were due on the earlier of September 2,
2005, or the date that the Company completes a subsequent financing with gross
cash proceeds of at least $1,000,000.  The Company was unable to
retire the Debentures as scheduled on September 2, 2005 and was in default of
the repayment terms.  In June 2007, interest and penalties of $444,964
were forgiven and the debentures were settled for $550,000.
 
 6.
              Derivative
      Financial Instruments
 
 As
discussed above, the embedded conversion option in our Convertible Debentures
and options issued to the investors to acquire additional debentures have been
accounted for as derivative instrument liabilities.
 
 We use
the Cox-Ross-Rubinstein binomial model to value warrants, and the embedded
conversion option components of any bifurcated embedded derivative instruments
that are recorded as derivative liabilities. See Note 5 related to embedded
derivative instruments that have been bifurcated from our Convertible Debentures
and the options to acquire additional Convertible Debentures held by the
investors.  The options and conversion options can be exercised by the
holders at any time.  The options held by the investors to acquire
additional Convertible Debentures expired in December 2007.
 
 In
valuing the embedded conversion option components of the bifurcated embedded
derivative instruments and the options, at the time they were issued and at
December 31, 2007, we used the market price of our common stock on the date of
valuation, an expected dividend yield of 0%, an estimated volatility of 250%
based on a review of our historical volatility and the remaining period to the
expiration date of the option or repayment date of the convertible debt
instrument.  The risk-free rate of return used was 4.23%, based on
constant maturity rates published by the U.S. Federal Reserve, applicable to the
remaining life of the options.
  41
 Index
  At
December 31, 2007, the following derivative liabilities were
outstanding:
 
 Issue
      Date
              Expiry
      Date
              Instrument
              
              Conversion/
                Exercise
      Price
                Per
      Share
              
              
              Value
      –
                Issue
      Date
              
              
              Value
      -
                December
                31,
      2007June
      2007
              May
      2012
              $2,350,000
                Convertible
      Debentures
              
              $
              0.02
              
              
              $
              2,338,899
              
              
              $
              2,097,319June
      2007
              
              Convertible
      Debentures Carrying Amount
              
              $
              -
              
              
              
              -
              
              
              
              4,033June
      2007
              December
      2007
              Option
      to acquire
                $1,175,000
                Convertible
      Debentures
              
              $
              0.03
              
              
              
              431,264
              
              
              
              -Total
      derivative financial instruments
              
              
              $
              2,770,163
              
              
              $
              2,101,352
 
 7.
              Commitments
      and Contingencies
  Operating
Leases:    The Company leases its office facilities
under various operating lease agreements having expiration dates through
2011.  Future minimum lease payments for each of the years through
lease expiration are as follows:
 
 Year2008
              
              $
              56,5112009
              
              $
              56,8262010
              
              $
              37,6462011
              
              $
              16,366
 
 Capital Lease
Obligations:    Several years ago, the Company
entered into a series of capital lease transactions with a third party lessor in
Canada.  The Company ceased making payments to the lessor and
abandoned the assets under capital leases.  The lessor has not
demanded that the Company make additional payments and the Company believes that
it has meritorious defenses against any claims by the lessor.  The
Company has attempted to negotiate a settlement with the lessor but has been
unable to obtain an unconditional release.
 
 For
accounting purposes, the Company determined that it should continue to report
the capital lease obligation as a liability until it either obtains an
unconditional release or the statute of limitations bars collection actions
against the Company.  Accordingly due to statute of limitations, the
Company recorded income from discharge of indebtedness in the amount of $418,418
during 2007.
  42
 Index
   8.
              Income
      Taxes
  At
December 31, 2007, the Company has tax loss carry forwards approximating
$5,000,000 that expire at various dates through 2027. The principal difference
between the net loss for book purposes and the net loss for income tax purposes
relates to expenses that are not deductible for tax purposes, including
reorganization costs, impairment of goodwill, stock issued for services and
amortization of debt discount. The tax
effects of temporary differences that give rise to significant portions of the
deferred tax assets and deferred tax liabilities at December 31, 2007, are
presented below:
  Deferred
      tax assets:Net
      operating loss carryforwards
              
              $
              1,793,184Less
      valuation allowance
              
              
              (1,793,184
              )Net
      deferred tax asset
              
              $
              -
  At this
time, the Company is unable to determine if it will be able to benefit from its
deferred tax asset. There are limitations on the utilization of net operating
loss carry forwards, including a requirement that losses be offset against
future taxable income, if any. In addition, there are limitations imposed by
certain transactions which are deemed to be ownership changes. Accordingly, a
valuation allowance has been established for the entire deferred tax asset. The
decrease in the valuation allowance was approximately $288,578 during
2007.
 
 A
reconciliation of the tax provision for 2007 and 2006 at statutory rates is
comprised of the following components:
  2007
              
              
              2006Tax
      at statutory rates
              
              $
              288,578
              
              
              $
              78,330Valuation
      allowance
              
              
              (288,578
              )
              
              
              (78,330
              )Tax
      provision
              
              $
              --
              
              
              $
              --
 
 9.
              Stockholders'
      (Deficit)
  Preferred
Stock:   The Company has authorized 5,000,000
preferred shares with a $0.20 par value.  There are two designations
of the class of preferred shares: Class A and Series B Preferred
Stock.  The Class A preferred stock is entitled to receive cumulative
annual dividends at the rate of 9%, payable in either cash or additional shares
of Class A Preferred Stock, at the option of the Company.  The Series
B Preferred Stock is not entitled to any dividends.  As of December
31, 2007, there were 720,000 shares of Class A Preferred stock and no shares of
Series B Preferred Stock issued and outstanding.  Dividends accrued
and unpaid as of December 31, 2007 were $120,360.
  43
 Index
   Common
Stock:   The Company has authorized 245,000,000
shares of $0.001 par value common stock.  As of December 31, 2007,
there were 149,068,107 shares of common stock issued and
outstanding.
 
 On August
6, 2007 the Company issued 7,500,000 shares of its common stock, with
restrictive legends, to consultants and/or advisors as compensation for services
rendered to the Company and settlement of payables.  The shares were
valued at $0.03 per share based on the closing price of $0.03 per share for a
fair market value of $225,000.
 
 On
October 1, 2007 the Company authorized issuance of 1,699,726 shares of its
common stock as compensation for interest on the June 2007 convertible
debentures.  The shares were valued at $0.02 per share based on the
convertible debenture agreement, for a fair market value of
$33,995.
 
 In
November 2006, the Company issued 7,000,000 shares as Board of Director
compensation. The shares were valued at $0.02 per share based on the closing
price of $0.02 per share for a fair market value of $140,000.
 
 Warrants:  On
June 11, 2007, the Company issued warrants to purchase 2,962,500 shares of
common stock for services rendered in connection with convertible
debentures.  These warrants have an exercise price of $0.02 per share
and expire five years from the date of issue.
 
 On June
11, 2007, the Company issued warrants to purchase 7,000,000 shares of common
stock for services rendered in connection with convertible
debentures.  These warrants have an exercise price of $0.03 per share
and expire five years from the date of issue.
 
 On
December 28, 2006, the Company issued warrants to purchase 3,900,000 shares of
common stock in connection with three bridge notes.  These warrants
have an exercise price of $0.03 per share and expire five years from the date of
issue.  The Company recorded a debt discount of $150,000 in connection
with these warrants, which was amortized during 2007 as the debts were either
repaid or converted into convertible debentures.
 
 44
 Index
  Outstanding and Exercisable
Warrants
 
 Exercise
      Price
              
              
              Number
      of
                Shares
              
              
              Remaining
                Contractual
      Life
                (in
      years)
              
              
              Exercise
      Price
                times
      Number
                of
      Shares
              
              
              Weighted
                Average
                Exercise
      Price$0.020
              
              
              
              2,962,500
              
              
              4.5
              
              
              $
              59,250$0.030
              
              
              
              7,000,000
              
              
              4.5
              
              
              
              210,000$0.030
              
              
              
              3,900,000
              
              
              4.0
              
              
              
              117,000$0.075
              
              
              
              10,963,333
              
              
              2.3
              
              
              
              822,25024,825,833
              
              
              
              
              
              $
              1,208,500
              
              
              $
              0.049
 
 
 Warrants
              
              Number
      of
                Shares
              
              
              Weighted
      Average Exercise PriceOutstanding
      at January 1, 2006
              
              
              27,076,950
              
              
              $
              0.134Issued
              
              
              3,900,000
              
              
              
              0.030Exercised
              
              
              ---
              
              
              
              ---Expired
      / Cancelled
              
              
              (8,096,950
              )
              
              
              0.202Outstanding
      at December 31, 2006
              
              
              22,880,000
              
              
              $
              0.093Issued
              
              
              9,962,500
              
              
              
              0.027Exercised
              
              
              -----
              
              
              
              ---Expired
      / Cancelled
              
              
              (8,016,667
              )
              
              
              0.148Outstanding
      at December 31, 2007
              
              
              24,825,833
              
              
              $
              0.049
 
 The
Company recorded compensation expense of $220,799 in connection with warrants
granted during the year ended December 31, 2007. The fair value of the warrant
grants was estimated on the date of grant utilizing the Black-Scholes option
pricing model with the following weighted average assumptions for grants during
the year ended December 31, 2007: expected life of warrants of 5 years, expected
volatility of 157%, risk-free interest rate of 4% and no dividend yield. The
weighted average fair value at the date of grant for warrants granted during the
year ended December 31, 2007, approximated $.022 per warrant.
 
 Options:   The
Company adopted a long term incentive stock option plan (the "Stock Option
Plan"). The Stock Option Plan provides for the issuance of 25,000,000 shares of
common stock upon exercise of options which may be granted pursuant to the Stock
Option Plan. As of December 31, 2007, options to purchase 23,750,000 shares were
outstanding and 1,250,000 shares are available for future grants of options. The
options vest as determined by the Board of Directors and are exercisable for a
period of no more than 10 years.
 
 In May
2007, the Company granted under our Long-Term Incentive Plan, an aggregate of
2,000,000 Non-Qualified Stock Options (“NQOs”).  500,000 of the NQOs
were granted to each of Woody McGee, Peter Bordes and Herbert Hunt with respect
to their service as members of the Board of Directors during 2007 and vested on
December 31, 2007.  Woody McGee did not complete the year of service
and his 500,000 options expired upon his resignation date of October 12, 2007.
500,000 of the NQOs were granted to John McClure with respect to his service as
a consultant for 2007 and vested on December 31, 2007.  John McClure
did not complete his year of service and his 500,000 options expired upon his
termination date of August 31, 2007.  All of these options were issued
at an exercise price of $0.025 per share, representing the closing price of the
Company’s common stock on such date.
  45
 Index
   In
November 2007, the Company granted under our Long-Term Incentive Plan, an
aggregate of 1,450,000 Incentive Stock Options (“ISOs”) to employees and an
aggregate of 800,000 Non-Qualified Stock Options (“NQOs”) to
consultants.  The options were issued at an exercise price of $0.015
per share, representing the closing price of the company’s stock on such date
and vest over three years with one-third vesting on the first anniversary of
employment with the Company and an additional one-third vesting on each of the
following two anniversaries thereof.
 
 In
November 2006, the Company granted under our Long-Term Incentive Plan, an
aggregate of 12,300,000 Incentive Stock Options (“ISOs”) and an aggregate of
3,600,000 Non-Qualified Stock Options (“NQOs”).  10,000,000 of the
ISOs were granted to Michael S. Wasik, the Company’s President, Chief Executive
Officer and Chief Financial Officer, of which (i) 6,000,000 vested immediately
and (ii) 4,000,000 vest over three years with one-third vesting on the first
anniversary of Mr. Wasik’s employment with the Company and an additional
one-third vesting on each of the following two anniversaries
thereof.  The remaining 2,300,000 incentive stock options were issued
to employees.  1,000,000 of the NQOs were granted to each of Peter
Bordes and Herbert Hunt with respect to their service as members of the Board of
Directors during 2005 and 2006 and vested immediately.  500,000 of the
NQOs were granted to Aaron Dobrinsky with respect to his service as a member of
the Board of Directors during 2006 and vested immediately.  All of
these options were issued at an exercise price of $0.02 per share, representing
the closing price of the Company’s common stock on such date.  The
remaining 1,100,000 non-qualified stock options were issued to
consultants.
 
 Outstanding Stock
Options
 
 Exercise
      Price
              
              
              Number
      of
                Shares
              
              
              Remaining
                Contractual
      Life
                (in
      years)
              
              
              Exercise
      Price
                times
      Number
                of
      Shares
              
              Weighted
                Average
                Exercise
      Price$0.026
              
              
              
              1,000,000
              
              
              7.75
              
              
              $
              26,000$0.010
              
              
              
              4,000,000
              
              
              6.25
              
              
              
              40,000$0.100
              
              
              
              1,000,000
              
              
              2
              
              
              
              100,000$0.020
              
              
              
              13,600,000
              
              
              6
              
              
              
              272,000$0.020
              
              
              
              900,000
              
              
              .25
              
              
              
              18,000$0.025
              
              
              
              1,000,000
              
              
              6.25
              
              
              
              25,000$0.015
              
              
              
              2,050,000
              
              
              6.75
              
              
              
              30,750$0.015
              
              
              
              100,000
              
              
              .5
              
              
              
              1,500$0.015
              
              
              
              100,000
              
              
              .25
              
              
              
              1,50023,750,000
              
              
              
              
              
              $
              514,750
              
              $
              0.022
 
 46
 Index
 
 Options
              
              Number
      of
                Shares
              
              
              Weighted
      Average
                Exercise
      PriceOutstanding
      at January 1, 2006
              
              
              8,600,000
              
              
              $
              0.027Granted
              
              
              15,900,000
              
              
              
              0.020Exercised
              
              
              -
              
              
              
              -Expired
              
              
              (100,000
              )
              
              
              -Outstanding
      at December 31, 2006
              
              
              24,400,000
              
              
              $
              0.025Granted
              
              
              4,250,000
              
              
              
              0.020Exercised
              
              
              -
              
              
              
              -Expired
              
              
              (4,900,000
              )
              
              
              0.024Outstanding
      at December 31, 2007
              
              
              23,750,000
              
              
              $
              0.022
 
 The
Company recorded compensation expense of $69,148 in connection with options
granted during the year ended December 31, 2007. $53,201 was recorded as
deferred compensation to be expensed in future periods.  The fair
value of the option grants was estimated on the date of grant utilizing the
Black-Scholes option pricing model with the following weighted average
assumptions for grants during the year ended December 31, 2007: expected life of
options of 7 years, expected volatility of 148%, risk-free interest rate of 4%
and no dividend yield. The weighted average fair value at the date of grant for
options granted during the year ended December 31, 2007, approximated $0.016 per
option.
 
 The
Company recorded compensation expense of $204,848 in connection with options
granted during the year ended December 31, 2006. $103,257 was recorded as
deferred compensation to be expensed in future periods.  The fair
value of the option grants was estimated on the date of grant utilizing the
Black-Scholes option pricing model with the following weighted average
assumptions for grants during the year ended December 31, 2006: expected life of
options of 5 years, expected volatility of 159%, risk-free interest rate of 4%
and no dividend yield. The weighted average fair value at the date of grant for
options granted during the year ended December 31, 2006, approximated $.019 per
option.
 
 10.
              Subsequent
      Events
 
 On
January 1, 2008, the Board approved issuance of 1,437,041 shares of our common
stock, as interest for the fourth quarter of 2007, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.
 
 On April
1, 2008, the Board approved issuance of 1,386,885 shares of our common stock, as
interest for the first quarter of 2008, pursuant to the clauses outlined in the
convertible debenture agreements of June 11, 2007.
 
 On April
14, 2008, we issued to Creative Hospitality Associates (“CHA”) a Warrant
pursuant to a sales agent Agreement with CHA (the “Agreement”).
  47
 Index
   The
Warrant is initially exercisable for Series B Preferred Stock.  At such
time as we have a sufficient number of shares of Common Stock authorized to
permit the exercise of the Warrant for Common Stock (the “Triggering Event”),
the Warrant will automatically be exercisable for Common Stock and not Series B
Preferred Stock.  The maximum number of shares of Common Stock for which
the Warrant is ultimately exercisable for is 15,000,000 and the ultimate
exercise price per share of Common Stock for which the Warrant is exercisable is
$0.02 per share, each of which is subject to adjustment and the conditions
contained in the Warrant.  The Warrant becomes ultimately exercisable for
such 15,000,000 shares of Common Stock pursuant to a vesting schedule as set
forth in the Warrant that provides that the Warrant becomes ultimately
exercisable for 500,000 shares of Common Stock with each 1,000 rooms in a hotel
or other property that CHA or its affiliate introduces to us and in which our
Media and Entertainment System is installed.
 
 On May
15, 2008, the Registrant’s Board of Directors approved the grant to employees
and consultants, under the Registrant’s Long-Term Incentive Plan, of an
aggregate of 100,000 Incentive Stock Options and an aggregate of 100,000
Non-Qualified Stock Options.  Such options were issued at an exercise
price of $0.017 per share and vest one-third (1/3) on each of the first three
anniversaries of the employment date.
  On July
1, 2008, the Board approved issuance of 1,402,302 shares of our common stock, as
interest for the period April 1 through June 30, 2008, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.
  On July
15, 2008 Aaron Dobrinsky exercised 4,000,000 options on a cashless basis
resulting in the net issuance of 2,571,429 shares of common stock
 
 On July
21, 2008, the Registrant’s Board of Directors approved the grant, under the
Registrant’s Long-Term Incentive Plan, of an aggregate of 400,000 Incentive
Stock Options and an aggregate of 600,000 Non-Qualified Stock
Options.  Such options were issued at an exercise price of $0.02 per
share and vest one-third (1/3) on each of the first three anniversaries of the
employment date
 
 On July
31, 2008 the Company authorized the issuance of Series C Preferred
Stock.  Each share of Series C Stock is convertible into such number
of shares of Common Stock as is determined by dividing $2,500 by the initial
conversion price of $0.025 per share (or 100,000 shares of Common Stock for each
share of Series C Stock converted). However, the Series C Stock is not
convertible into Common Stock until such time as the Company has a sufficient
number of shares of Common Stock authorized to permit the conversion of all of
the Series C Stock into Common Stock, at which time the Series C Stock will
automatically convert into Common Stock.
 
 The
Series C Stock accrues dividends at an annual rate of 6% per year, payable
quarterly, either in cash or, at the Registrant’s election, shares of the
Registrant’s capital stock.  There are no redemption rights associated
with the Series C Stock.  Each holder of Series C stock is entitled to
voting rights on an “as converted” to Common Stock basis together with the
holders of Common Stock.
  48
 Index
   On July
31, 2008 we entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with an investor group, and certain affiliated trusts (collectively,
the “Investors”), pursuant to which we simultaneously sold and issued to the
Investors an aggregate of $2,500,000 of Series C Preferred Stock (“Series C
Stock”).  In connection with the Purchase Agreement, the Registrant
also issued Warrants to the Investors for the purchase of additional shares of
Series C Stock or Common Stock and entered into a Registration Rights Agreement
with the Investors.
 
 Pursuant
to the Purchase Agreement, the Investors also received (i) Series C-1 Warrants
to purchase an aggregate of 200 shares of Series C Stock, at an initial exercise
price of $4,000 per share of Series C Stock, and (ii) Series C-2 Warrants to
purchase an aggregate of 200 shares of Series C Stock, at an initial exercise
price of $6,000 per share of Series C Stock.  The Warrants are
immediately exercisable and expire on the third anniversary of their date of
issuance.  At such time as the Company has a sufficient number of
shares of Common Stock authorized to permit the conversion of all Series C Stock
into Common Stock, each Warrant will no longer be exercisable for shares of
Series C Stock but instead will be exercisable for the number of shares of
Common Stock into which the Series C Stock that the Warrant could have been
exercised for prior thereto would have been convertible into, at an initial
exercise price of $.04 per share of Common Stock under the Series C-1 Warrants
and at initial exercise price of $.06 per share of Common Stock under the Series
C-2 Warrants.  The initial exercise prices are subject to adjustment
as set forth in the Warrants.
 
 In
connection with the Purchase Agreement, the Registrant entered into a
Registration Rights Agreement. Pursuant to the Registration Rights Agreement,
the Registrant is obligated to register for resale under the Securities Act the
shares of Common Stock issuable upon conversion of the Series C Stock and
exercise of the Warrants beginning by April 30, 2009.
 
 On August
19, 2008, the Registrant’s Board of Directors approved the grant, under the
Registrant’s Long-Term Incentive Plan, of an aggregate of 300,000 Incentive
Stock Options.  Such options were issued at an exercise price of
$0.012 per share and vest one-third (1/3) on each of the first three
anniversaries of the grant date.
 
 On August
19, 2008, the Company granted under our Long-Term Incentive Plan, an aggregate
of 500,000 Non-Qualified Stock Options (“NQOs”).  The NQOs were
granted to Christopher Blisard with respect to his service as a member of the
Board of Directors during 2009 and vest on December 31, 2009.  The
options were issued at an exercise price of $0.012 per share, representing the
closing price of the Company’s common stock on such date.
 
 On August
19, 2008, the Company issued 1,200,000 shares of common stock as payment to the
Board of Director for compensation owed to them for the year ended December 31,
2007. 800,000 of the shares were issued to Peter Bordes and 400,000 of the
shares were issued to Herbert Hunt.  The shares were valued at $0.025
per share for a fair market value of $30,000.
  49
 Index
  ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
 
 There
have been no changes in our accountants during the past fiscal year, and we have
not had any disagreements with our accountants for the period June 13, 2006
through September 30, 2008.
  As
previously reported on a Form 8-K filed with the SEC on June 14, 2006, effective
June 8, 2006, Eisner LLP resigned as our independent auditors.  There
were no disagreements with Eisner, LLP, whether or not resolved, on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which, if not resolved to Eisner LLP’s
satisfaction, would have caused it to make reference to the subject matter of
the disagreement(s) in connection with its report.
  Effective
June 13, 2006, we engaged Stark Winter Schenkein & Co., LLP, Denver,
Colorado (“SWS”), as our principal independent accountants.  Neither
we (nor anyone on our behalf) consulted SWS regarding the application of
accounting principles to a specific completed or contemplated transaction, or
the type of audit opinion that might be rendered on our financial statements
prior to their agreement.
  MANAGEMENT’S
REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING
  The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined in Exchange
Act Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of
1934.  Under the direction of and with the involvement of management,
including its principle executive and financial officer, the company has
performed an assessment of the effectiveness of internal control over financial
reporting based on the framework in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO).
  Internal
control systems, no matter how well designed, have inherent
limitations.  Therefore, even those systems that are determined to be
effective by provide only reasonable assurance with respect to financial
statement preparation and presentation.  Also, projections of any
evaluation of effectiveness to future periods are subject to risk that controls
may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
  Based on
its assessment,
management has concluded that internal control over financial reporting was
effective as of December 31, 2007.
  ITEM 8A(T). CONTROLS AND PROCEDURES
  (a)  Our
Management supervised and participated in an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures as of
December 31, 2007.  Based on that evaluation, our management,
including our principle executive and financial officer, concluded that our
disclosure controls and procedures were effective to ensure that information
required to be disclosed in the reports filed or submitted by the Company under
the Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and communicated to our management, including our principle executive
and financial officer, as appropriate, to allow timely decisions regarding
required disclosure within the time periods specified in the SEC’s rules and
forms.
  50
 Index
   This
report does not include an attestation report of our independent registered
public accounting firm regarding internal control over financial
reporting.  Management’s report, which is included above, was not
subject to attestation by our registered public accounting firm pursuant to
temporary rules of the SEC that permit us to provide only management’s report in
the annual report.
  (b)  There
were no changes in our internal control over financial reporting during the
period ended December 31, 2007, that materially affected, or are reasonably
likely to materially affect, our internal controls over financial
reporting.
  ITEM 8B. OTHER INFORMATION
  None
  ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
  The
following table sets forth the names, positions and ages of our executive
officers and directors as of September 24, 2008. All of our directors serve
until the next annual meeting of stockholders or until their successors are
elected and qualify. Officers are elected by the board of directors and their
terms of offices are, except to the extent governed by employment contracts, at
the discretion of the board of directors. There is no family relationship
between any director, executive officer or person nominated or chosen by the
Company to become a director or executive officer.
  Name
              Age
              PositionMichael
      S. Wasik
              39
              Chief
      Executive Officer, Chief Financial Officer, and
ChairmanJudson
      Just
              38
              DirectorChristopher
      Blisard
              41
              Director
  Michael
S. Wasik has served as the Company's chief executive officer, chief financial
officer, and member of the Board of Directors since November 2,
2005.  Mr. Wasik founded SuiteSpeed, Inc., a wired and wireless high
speed internet service provider, in 2002 and served as its Chairman and Chief
Executive Officer from its inception in 2002 until August 2005, when SuiteSpeed
was merged into Roomlinx.  Prior to forming SuiteSpeed Inc, from
November 1997 to January 2002, Mr. Wasik founded TRG Inc, and served as
President and Chairman of TRG Inc. a technical consulting company.
  51
 Index
   Judson P.
Just, CFA has spent the last nine years with PEAK6 Investments, LP as a
Portfolio Manager, Analyst, Trader and Manager of the founding family’s Family
Office.  Established in 1997, PEAK6 Investments, LP is a leading financial
institution in Chicago with an established track record of success in
proprietary trading. Recently recognized as one of Chicago's Best and Brightest
Employers to Work For,' the company is also rapidly expanding its commercial
focus to include innovative initiatives in the online media, retail options
brokerage and asset management.  Judson is also a Board member for Solution
BioSciences, an animal health technology company; and Vassol Inc., the developer
of NOVA® the first commercially available technology to measure actual blood
flow rates in individual vessels using MRA/MRI scanners.  Prior to PEAK6,
Judson spent six years as a Trader for Heartland Funds, a specialist in small
cap equities.
 
 Christopher
T. Blisard, one of the founders of Sage Canyon Advisors, currently serves as one
of our Managing Directors. A life-long entrepreneur, Mr. Blisard brings 21 years
of operational, business development and leadership experience to this
position.
 
 In
addition to Sage Canyon Advisors, Mr. Blisard serves as the Chief Operating
Officer of Circadence Corporation, a Boulder, Colorado-based industry-leading
provider of wide area network (WAN) optimization technology to the US Government
and commercial enterprises, a position he has held since 1999. Mr. Blisard has
been fundamental in creating a number of strategic partnerships for Circadence
with prominent industry leaders such as Hewlett-Packard, Accenture, Dell, CSK
Ventures (Hitachi), Microsoft, Deutsche Telekom, Global Crossing, and Pacific
Century CyberWorks Japan (PCCWJ). His leadership has also been vital to the
development of significant business relationships within the defense and
security industry including the Department of Defense, the four major military
branches, Northrop Grumman, L3, and others.
 
 Mr.
Blisard is a founder and Chairman of the Board of VirtualArmor, located in
Greenwood Village, Colorado. VirtualArmor offers businesses the professional
services needed to secure network infrastructure. Additionally, Mr. Blisard is a
founder of VivID Technologies, LLC, located in Tupelo, Mississippi. VivID
Technologies provides radio frequency identification (RFID) and sensor-based
solutions to the industry and defense markets, including the US Army and US
Marine Corps.
 
 Mr.
Blisard is a founder and serves on the Board of QuantaLife, located in
Livermore, California.  QuantaLife, Inc. was formed in January, 2008, to
develop, manufacture and commercialize advanced digital polymerase chain
reaction (PCR) technologies for the life science research, clinical diagnostics,
industrial testing, pharmacogenetics and biodefense markets.  The system
will focus on the amplification and detection of nucleic acid in less than five
minutes, representing up to an order of magnitude improvement over commercial
real-time PCR (rtPCR) systems.  Since its conception in 1998, rtPCR has
exponentially replaced other bioassay techniques and now serves as the principal
nucleic acid diagnostic tool.  Quantum PCR indeed represents a fundamental
advancement in PCR technology with the introduction of quantum
microfluidics.
  52
 Index
   Previously,
Mr. Blisard was involved in a number of other successful enterprises, including:
VR•1, Inc., one of the most successful massively multi-player online simulation
and gaming companies prior to its sale to Pacific Century CyberWorks Japan in
2001; Online Network Enterprises (ONE), an Internet Service Provider acquired by
Rocky Mountain Internet (RMI) in 1997; SolarTech Enterprises LLC, a designer and
developer of patented chemical ultraviolet sensors, winner of the USWest New
Venture Fund and the recipient of two National Cancer Institute research grants;
Armor Holdings, Inc. (formerly ABA), a top supplier of human safety and survival
systems to all branches of the U.S. military and major aerospace and defense
prime contractors; and GCCTechnologies, an innovator in combining reliable
hardware and revolutionary software to produce high-performance computer
peripherals.
 
 Mr.
Blisard also served on the Board of Directors for the Mile High Chapter of the
National Defense Industrial Association (NDIA). To stay current with trends and
developments within the defense and security industry, Mr. Blisard is a member
of the NDIA and the Association of the United States Army (AUSA).
  AUDIT
COMMITTEE
  The
Company has an Audit Committee of the Board of Directors, the current members of
which are Judson Just and Christopher Blisard. The Board of Directors has
delegated to the Audit Committee the following principal duties: (i) reviewing
with the independent outside auditors the plans and results of the audit
engagement; (ii) reviewing the adequacy of the internal accounting controls and
procedures; (iii) monitoring and evaluating the financial statements and
financial reporting process; (iv) reviewing the independence of the auditors;
and (v) reviewing the auditors' fees. As contemplated by the Sarbanes-Oxley Act
of 2002 and the rules and regulations promulgated by the Securities and Exchange
Commission there under, the Audit Committee has assumed direct responsibility
for the appointment, compensation, retention and oversight of our independent
auditors in accordance with the timetable established with the Securities and
Exchange Commission. The Audit Committee has been established in accordance with
the provisions of the Sarbanes-Oxley Act.
  AUDIT
COMMITTEE FINANCIAL EXPERT
  The
Company does not have an audit committee financial expert sitting on its Audit
Committee. In light of its capital and liquidity risks and uncertainties, the
Company has been unable to attract an independent director with this type of
expertise.
  CODE
OF ETHICS
  The
Company has adopted a code of ethics that applies to the Company's chief
executive officer, chief financial officer, principal accounting officer or
controller and persons performing similar functions. The Company shall provide
to any person, without charge, upon request, a copy of such request. Any such
request may be made by sending a written request for such code of ethics
to:
  53
 Index
   Roomlinx,
Inc., 2150 W. 6th Ave
Unit H Broomfield, CO 80020, Attn.: Michael S. Wasik, Chief Executive
Officer.
  SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
  Section
16(a) of the Exchange Act, and the rules and regulations of the SEC there under
requires our directors, executive officers and persons who own beneficially more
than 10% of our common stock to file reports of ownership and changes in
ownership of such stock with the SEC. Based solely upon a review of such
reports, we believe that all our directors, executive officers and 10%
stockholders complied with all applicable Section 16(a) filing requirements
during the last fiscal year.
  ITEM 10. EXECUTIVE
COMPENSATION
  EXECUTIVE
AND DIRECTOR COMPENSATION
  Summary Compensation
Table
  The
following table sets forth the cash and non-cash compensation for awarded to or
earned by (i) each individual serving as our chief executive officer during the
fiscal year ended December 31, 2007 and (ii) each other individual that served
as an executive officer at the conclusion of the fiscal year ended December 31,
2007 and who received in excess of $100,000 in the form of salary and bonus
during such fiscal year (collectively, the “named executive
officers”).
  Name
      &
                Principal
                Position
              Year
              
              Salary
                ($)
              
              Bonus
                ($)
              Stock
                Awards
                ($)
              Option
                Awards
                ($)
              Non-Equity
                Incentive
      Plan Compensation
                ($)
              Nonqualified
                Deferred
      Compensation Earnings ($)
              All
      Other Compensation
                ($)
              
              Total
                ($)Michael
      S.* (1)Wasik
              2007
              
              
              148,000
              
              
              
              
              
              
              
              
              
              75,000CEO
      and CFO
              2006
              
              
              75,000
              
              
              
              
              
              
              
              
              
              150,000
 
 Executive Employment
Agreements
  On August
10, 2005 ("the Effective Date"), we entered into an employment agreement with
Mr. Michael Wasik for Mr. Wasik to serve initially as Executive Vice President
and now as our chief executive officer. The following is a summary of the
material terms of the agreement.
  Term. The
initial term of the agreement was two years from the date of the agreement.
Accordingly, the agreement has expired.
  54
 Index
   Compensation.
Mr. Wasik's initial annual base salary under the agreement was
$150.000.  Mr. Wasik also was eligible to receive such bonuses as may
be determined by the Board of Compensation Committee.
  Stock
Options. Under the agreement, Roomlinx granted to Mr. Wasik a stock option (the
"Wasik Option") under the Roomlinx, Inc. Long-Term Incentive Plan (the "Plan")
for the purchase of an aggregate of 1,000,000 shares of common stock of Roomlinx
common stock at an option price equal to $0.026 per share.  Such
options vested immediately upon grant on August 10, 2005.
  Outstanding Equity Awards At
Fiscal Year-End Table (Fiscal Year-End December 31, 2007)
  Option
      Awards
              Stock
      AwardsName
              Number
      of Securities Underlying Unexercised Options (#)
    Exercisable
              
              Number
      of
                Securities
                Underlying
      Unexercised
                Options
      (#) Unexercisable
              
              
              Equity
                Incentive
                Plan
                Awards:
                Number
      of
                Securities
                Underlying
      Unexercised
                Unearned
                Options
      (#)
              
              
              Option
                Exercise
                Price
      ($)
              
              Estimated
                Per
      Share
                Market
                Value
      at
                Grant
      Date
                if
      Greater
                than
                Exercise
                Price
      ($)
              Option
                Expiration
                Date
              Number
      of
                Shares
      or
                Units
      of
                Stock
      That
                Have
      Not
                Vested
      (#)
              Market
                Value
      of
                Shares
      or
                Units
      of
                Stock
      That
                Have
      Not
                Vested
      ($)
              Equity
                Incentive
                Plan
                Awards:
                Number
      of Unearned
                Shares,
                Units
      or
                Other
      Rights
                That
      Have
                Not
      Vested
                (#)
              Equity
                Incentive
                Plan
                Awards:
                Market
      or
                Payout
                Value
      of Unearned
                Shares,
                Units
      or
                Other
      Rights
                That
      Have
                Not
      Vested
                ($)Michael
      S. Wasik
              
              
              
              1,000,000
              
              
              
              1,000,000
              
              
              
              0.026
              
              
              8/10/2012Michael
      S. Wasik
              
              
              
              10,000,000
              
              
              
              10,000,000
              
              
              
              0.020
              
              
              11/20/2013
  Director
Compensation Table – Fiscal Year-End December 31, 2007
  Name
              Fees
                Earned
                or
      Paid
                in
      Cash
                ($)
              Stock
                Awards
                ($)
              
              Option
                Awards
      ($)
              
              Non-Equity
                Incentive
      Plan
                Compensation
                ($)
              Nonqualified
                Deferred
                Compensation
                Earnings
      ($)
              All
      Other
                Compensation
                ($)
              
              Total
      ($)Michael
      S. Wasik
              
              
              
              
              
              
              
              
              
              
              0Herbert
      Hunt
              
              
              
              
              12,500
              
              
              
              
              
              
              12,500Peter
      Bordes
              
              
              
              
              12,500
              
              
              
              
              
              
              12,500
  55
 Index
   ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  The
following tables set forth certain information regarding the beneficial
ownership of our common stock and preferred stock as of September 8, 2008, by
(i) each person who is known by us to be the beneficial owner of more than 5% of
our outstanding common stock or preferred stock; (ii) each of our directors and
executive officers; and (iii) all of our directors and executive officers as a
group. In determining the number and percentage of shares beneficially owned by
each person, shares that may be acquired by such person under options or
warrants exercisable within 60 days of September 8, 2008 are deemed beneficially
owned by such person and are deemed outstanding for purposes of determining the
total number of outstanding shares for such person and are not deemed
outstanding for such purpose for all other stockholders.
  COMMON,
PREFERRED CLASS A, AND PREFERRED SERIES C STOCK
  Name
      and Address
              
              Percent*
              
              
              Number
      of Shares Beneficially OwnedCommon
              
              
              Preferred
      A
              
              
              Preferred
      CMichael
      S. Wasik**
              
              
              23.07
              %
              
              
              36,233,566
              
              
              
              0
              
              
              
              0Herbert
      I. Hunt, III***
              
              
              5.24
              %
              
              
              8,234,612
              
              
              
              0
              
              
              
              0Peter
      A. Bordes, Jr.****
              
              
              6.25
              %
              
              
              9,824,148
              
              
              
              0
              
              
              
              0Judson
      Just*****
              
              
              0.05
              %
              
              
              75,000
              
              
              
              0
              
              
              
              0Christopher
      Blisard******
              
              
              1.78
              %
              
              
              2,792,084
              
              
              
              0
              
              
              
              0All
      directors and current executive officers as a group (5
      persons)
              
              
              36.39
              %
              
              
              57,159,410
              
              
              
              0
              
              
              
              0
 
 *
              Based
      on 157,065,781 shares of Common Stock, 720,000 shares of Class A Preferred
      Stock, and 1,000 shares of Series C Preferred Stock issued and outstanding
      as of October 6, 2008.**
              Includes
      25,233,566 shares owned by Mr. Wasik and options to purchase 1,000,000
      shares at $0.026 per share which are fully vested and expire on August 10,
      2015 and options to purchase 10,000,000 shares at $0.02 per share which
      are fully vested and expire on November 20, 2011.***
              Includes
      6,134,612 shares owned by Mr. Hunt, options to purchase 500,000 shares at
      $0.10 per share which are fully vested and expire on January 25, 2010,
      options to purchase 1,000,000 shares at $0.02 per share which are fully
      vested and expire on November 20, 2011 and options to purchase 500,000
      shares at $0.025 per share which are fully vested and expire on May 4,
      2012.****
              Includes
      7,724,148 shares owned by Mr. Bordes, options to purchase 500,000 shares
      at $0.10 per share, which are fully vested and expire on January 25, 2010,
      options to purchase 1,000,000 shares at $0.02 per share, which are fully
      vested and expire on November 20, 2011 and options to purchase 500,000
      shares at $0.025 per share, which are fully vested and expire on May 4,
      2012.*****
              Includes
      75,000 shares owned by Mr. Just.******
              Includes
      2,292,084 shares owned by Mr. Blisard and options to purchase 500,000
      shares at $0.012 per share, which vest on December 31, 2009 and expire on
      December 31, 2015
  56
 Index
   ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
  From
November 2004 through January 2005, the Company received proceeds of $320,000 in
exchange for 10% promissory notes from shareholders and related parties,
maturing six months from the date of issuance.  During 2005, the
Company repaid $40,000 of the notes.  The Company was not able to
retire the remaining balance of the promissory notes as scheduled and was in
default of the repayment terms.  During 2007, interest and penalties
of $104,553 and principal of $137,397 were forgiven, and the notes were settled
for $142,603, of which $12,500 was paid subsequent to December 31,
2007.
 
 On August
10, 2005, the Registrant issued to Michael Wasik, who is now the President and
Chief Executive Officer, a total of 25,233,566 shares of Common Stock in
connection with the merger of SuiteSpeed, Inc. with the Registrant and the
cancellation of certain liabilities of SuiteSpeed, Inc. to Mr.
Wasik.
  On August
10, 2005, the Registrant’s Board of Directors approved the grant, under the
Registrant’s Long-Term Incentive Plan, of an aggregate of 1,000,000 Incentive
Stock Options (“ISOs”) to Mr. Wasik, which vested immediately.
  On August
11, 2006, the Company borrowed $7,500 from Peter Bordes.  Principal
and interest at 10% were due upon receipt of funding.  The note was
repaid in June, 2007.
  On
November 20, 2006, the Registrant’s Board of Directors agreed to issue, based on
the closing price of the Registrant’s Common Stock on November 20, 2006 (later
determined to be $0.02 per share), (i) to each of Peter Bordes and Herbert Hunt
shares of the Registrant’s Common Stock having an aggregate value of $60,000 as
payment in full of their respective Board compensation owed to them for the
three-year period 2004 – 2006 and (ii) to Mr. Dobrinsky shares of the
Corporation’s Common Stock having an aggregate value of $20,000 as payment in
full of his respective Board compensation owed to him for 2006.
  In
November 2006, the Company granted under our Long-Term Incentive Plan, an
aggregate of 12,300,000 Incentive Stock Options (“ISOs”) and an aggregate of
3,600,000 Non-Qualified Stock Options (“NQOs”).  10,000,000 of the
ISOs were granted to Michael S. Wasik, the Company’s President, Chief Executive
Officer and Chief Financial Officer, of which (i) 6,000,000 vested immediately
and (ii) 4,000,000 vest over three years with one-third vesting on the first
anniversary of Mr. Wasik’s employment with the Company and an additional
one-third vesting on each of the following two anniversaries
thereof.  The remaining 2,300,000 incentive stock options were issued
to employees.  1,000,000 of the NQOs were granted to each of Peter
Bordes and Herbert Hunt with respect to their service as members of the Board of
Directors during 2005 and 2006 and vested immediately.  500,000 of the
NQOs were granted to Aaron Dobrinsky with respect to his service as a member of
the Board of Directors during 2006 and vested immediately.  All of
these options were issued at an exercise price of $0.02 per share, representing
the closing price of the Company’s common stock on such date.  The
remaining 1,100,000 non-qualified stock options were issued to
consultants.
 
 57
 Index
   On May 4,
2007, the Registrant’s Board of Directors authorized and approved the following
compensation package for each of Peter Bordes and Herbert Hunt for their
services as independent directors of the Registrant for 2007: (i) the payment of
the sum of $20,000 on December 31, 2007 so long as they are serving as an
independent director of the Registrant on such date, and (ii) the grant of
Non-Qualified Stock Options under the Registrant’s Long Term Incentive Plan for
the purchase of up to 500,000 shares of the Registrant’s Common Stock at an
exercise price equal to the May 4, 2007 closing trading price of the
Registrant’s Common Stock, namely $.025 per share, vesting in full on December
31, 2007, so long as they are serving as an independent director of the
Registrant on such date. Such compensation was also offered to Mr. Woody McGee;
however, Mr. McGee resigned from the Board of Directors prior to December 31,
2007.
  On August
19, 2008 the Company granted under our Long-Term Incentive Plan, an aggregate of
500,000 Non-Qualified Stock Options (“NQOs”).  The NQOs were granted
to Christopher Blisard with respect to his service as a member of the Board of
Directors during 2009 and vest on December 31, 2009.  The options were
issued at an exercise price of $0.012 per share, representing the closing price
of the Company’s common stock on such date.
 
 On August
19, 2008 the Company issued 1,200,000 shares as Board of Director compensation
for the year ended December 31, 2007. 800,000 of the shares were issued to Peter
Bordes and 400,000 of the shares were issued to Herbert Hunt.  The
shares were valued at $0.025 per share for a fair market value of
$30,000.  This compensation was accrued for in 2007.
  ITEM 13. EXHIBITS
  (a) The
following Exhibits are filed with this report or incorporated by
reference:
  2.1
Agreement and Plan of Merger, dated as of December 8, 2004, by and among Arc
Communications, Inc., Old Roomlinx and the registrant (the "Merger Agreement")
is incorporated by reference to Annex A to the definitive proxy statement filed
by Arc Communications, Inc. with the SEC on June 15, 2004
  2.2
Amendment No. 1 to the Merger Agreement is incorporated by reference to Annex E
to the definitive proxy statement filed by Arc Communications, Inc. with the SEC
on June 15, 2004.
  58
 Index
   2.3
Amendment No. 2 to the Merger Agreement is incorporated by reference to Annex F
to the definitive proxy statement filed by Arc Communications, Inc. with the SEC
on June 15, 2004.
  3.1
Amended and Restated Articles of Incorporation of the registrant is incorporated
by reference to Exhibit 2.0 to the registrant's Quarterly Report on Form 10-QSB
for the quarter ended June 30, 2004.
  3.2
Amended and Restated By-Laws of the registrant is incorporated by reference to
Exhibit 3.1 to the registrant's Quarterly Report on Form 10-QSB for the quarter
ended June 30, 2004.
  4.1 Form
of convertible debenture issued pursuant to the Securities Purchase Agreement
described in Exhibit 10.10 is incorporated by reference to Exhibit 4.1 to the
registrant's Current Report on Form 8-K filed with the SEC on June 14,
2007.
  4.2 Form
of Unregistered Sales of Equity
Securities Agreement with Creative Hospitality Associates, as part of a sales
agent agreement, is incorporated by reference to Exhibit 4.1to the
registrant's Current Report on Form 8-K filed with the SEC on April 16,
2008.
  10.1
Roomlinx, Inc. Long Term Incentive Plan is incorporated by reference to Annex A
to the definitive proxy statement filed by Arc Communications, Inc. with the SEC
on June 15, 2004
  10.2
Employment agreement between the registrant and Michael Wasik is incorporated by
reference to Exhibit 10.2 of the registrant’s current report on Form 8-K filed
with the SEC on August 16, 2005.
  10.3
Separation Agreement dated April 26, 2006 between the Company and Mr. Aaron
Dobrinsky is incorporated by reference to Section 10.1 of the registrant’s Form
10-QSB for the quarter ended September 30, 2005.
  10.4
Securities Purchase Agreement dated as of June 11, 2007, by and among the
registrant and the Investors named therein is incorporated by reference to
Exhibit 10.1 to the registrant's Current Report on Form 8-K filed with the SEC
on June 14, 2007.
  10.5
Agreement and Plan of Merger, dated as of August 10, 2005 by and among the
registrant, SS-R Acquisition Corp. and SuiteSpeed, Inc., incorporated by
reference to Exhibit 10.1 of the registrant’s current report on Form 8-K filed
with the SEC on August 16, 2005.
  * 31.1
Certification of the chief executive officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
  * 31.2
Certification of the chief financial officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
  59
 Index
   * 32.1
Certification of the chief executive officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
  * 32.2
Certification of the chief financial officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
  * 99.1
Risk Factors
  ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
  AUDIT
FEES
  The
aggregate fees for professional services rendered by Stark Winter Schenkein
& Co LLP for the audit of the annual consolidated financial statements of
Roomlinx, Inc. for the fiscal year ended December 31, 2007, and for the reviews
of the financial statements included in Roomlinx, Inc. Quarterly Reports on Form
10-QSB for the fiscal year ended December 31, 2007, were $38,000.
  AUDIT
RELATED FEES, TAX FEES AND ALL OTHER FEES
  Stark
Winter Schenkein & Co LLP did not receive fees for services to the Company
for the fiscal year ended December 31, 2007 other than the fees for services
described under “Audit Fees.”
  BOARD
OF DIRECTORS ADMINISTRATION OF THE ENGAGEMENT
  Before
Stark Winter Schenkein & Co LLC was engaged by the Company for the 2007
audit, Stark Winter Schenkein & Co LLC’s engagement and engagement letter
were approved by the Company's Board of Directors.


60


Index






Signatures





Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.





Roomlinx,
      Inc.By:
            /s/ Michael S.
      WasikMichael
      S. WasikChief
      Executive OfficerDate:
            10/8/08





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.








By:
            /s/ Michael S.
      WasikMichael
      S. WasikChairman
      of the Board of DirectorsDate:
            10/8/08By:
            /s/ Judson
      JustJudson
      JustDirectorDate:
            10/8/08By:
            /s/ Christopher
      BlisardChristopher
      BlisardDirectorDate:
            10/8/08






61