U.S. SECURITIES AND
EXCHANGE COMMISSION
 Washington,
D.C. 20549
  FORM
10-KSB
  T ANNUAL
REPORT UNDER SECTION 13 OR 15(d)
 OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the
fiscal year ended December 31, 2006
  £ 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 incorporation or organization)
              (I.R.S.
      Employer 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: £No: T
  
 
  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 T
  State
issuer's revenues for its most recent fiscal year: $2,212,840
  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 $2,997,992as of June 23,
2008.
  As of
June 23, 2008, there were 151,892,050 shares of the registrant's common stock
and 720,000 shares of the registrant's preferred stock are issued and
outstanding.
  TRANSITIONAL
SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE):
  Yes £No T
  2
  INDEX
  PART
      IItem
      1.
              
              Description of BusinessItem
      2.
              
              Description of PropertiesItem
      3.
              
              Legal ProceedingsItem
      4.
              
              Submission of Matters to a Vote of Security
      HoldersPART
      IIItem
      5.
              
              Market for Common Equity and Related Stockholder
      MattersItem
      6.
              
              Management's Discussion and Analysis of Financial Condition and
      Plan of OperationsItem
      7.
              
              Financial StatementsItem
      8.
              
              Changes in and Disagreements with Accountants on Accounting and
      Financial DisclosureItem
      8A.
              
              Controls and ProceduresItem
      8B.
              
              Other InformationPART
      IIIItem
      9.
              
              Directors, Executive Officers, Promoters and Control Persons;
      Compliance with Section 16(a) of the Exchange ActItem
      10.
              
              Executive CompensationItem
      11.
              
              Security Ownership of Certain Beneficial Owners
      ManagementItem
      12.
              
              Certain Relationships and Related
    TransactionsItem
      13.
              
              ExhibitsItem
      14.
              
              Principal Accountant Fees and ServicesSignatures.
  3
 Index
  PART
I
  ITEM1.
DESCRIPTION OF BUSINESS
  ORGANIZATIONAL
HISTORY/RECENT MANAGEMENT DEVELOPMENTS
  This Form
10-KSB for the year ended December 31, 2006 is being filed on or about June 30,
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 180 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”.
  In 2004,
we completed a reorganization (the “2004 Reorganization”), and as a result of
the Reorganization, we have focused our business on the business of providing
wired and wireless network solutions to hotels, convention centers, corporate
apartments and special events locations.
  On August
10, 2005, we entered into an Agreement and Plan of Merger with SuiteSpeed, Inc.
pursuant to which we merged with SuiteSpeed and we issued a total of 21,426,046
shares of our Common Stock to the former stockholders of SuiteSpeed and a total
of 6,183,870 additional shares of our Common Stock to cancel certain
indebtedness of SuiteSpeed to its principal stockholder, Michael
Wasik.
  On
September 20, 2005, Mr. Wasik was appointed to our Board of
Directors.
  On
November 2, 2005, Mr. Wasik was appointed as our Chief Executive
Officer.  We also announced the departures of Mr. Aaron Dobrinsky as
Chief Executive Officer and Mr. Frank Elenio as Chief Financial Officer and as a
Board member.
  On
November 2, 2005, we announced the relocation of our executive headquarters to
Broomfield, Colorado, located within the Denver Metropolitan area.
  Effective
as of November 17, 2006, Mr. Dobrinsky resigned from our Board of
Directors.
  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”).
  4
 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.
 
 GENERAL
  Since the
2004 Reorganization, we have focused our business on the business of 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 June 23, 2008, our
current customer base consisted of approximately 149 hotels and 25,956 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:
  5
 Index
  1.
              Ongoing
      Connectivity Service and Support
Contracts
 2.
              Delivery
      of  Content and
Advertising
 3.
              Delivery
      of Business and Entertainment
applications
  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 $2,350,000 amount of Convertible
Debentures due May 2012.  The Convertible Debentures are
initially convertible into Series B Preferred Stock, which Series B Preferred
Stock will not be convertible into Common Stock until such time as the Company
has sufficient number of shares of Common Stock authorized to permit the
conversion of the Convertible Debentures into Common Stock, at which time the
Convertible Debentures will automatically be convertible into Common Stock and
not Series B Preferred Stock.  The ultimate conversion price into shares of
Common Stock of the Convertible Debentures is $0.02 per share, subject to
certain restrictions contained in the Convertible Debentures.  The
interest on the convertible debentures is six percent (6%) payable quarterly
either in cash or, at the Company’s election, in shares of the Company’s Series
B Preferred Stock prior to the Triggering Event or shares of the Company’s
Common Stock thereafter at Two and One-Half Cents ($.025) per share of Common
Stock or a 10% discounted stock price from the average market price for the 20
business days preceding the interest payment date, whichever is
greater.  Each investor was also given the option to purchase
additional convertible debentures; however, such options have
expired.
  As of
June 11, 2007, we also reached agreement with certain of our debt holders
whereby we repaid and canceled all prior existing indebtedness (other than bank
debt) at a fifty percent (50%) discount to the outstanding principal amount of
such indebtedness.  The total outstanding principal amount of such
indebtedness immediately prior to such repayment and cancellation was
approximately $1.4 million.
  On
October 1, 2007, the Board approved issuance of 1,699,726 shares of our common
stock, 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, 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, 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.
  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.
  OUR
SERVICES
  6
 Index
   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
service we currently offer is 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 requirements to
supply 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.
  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. Our plan is to deliver this via our user-friendly,
streamlined interface displayed on a sleek, flat-panel HD LCD television and
powered by our Roomlinx media console.  It is our goal to truly
converge the television and personal computer into one offing in hotel
rooms.
  7
 Index
  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 launch our new media and entertainment system and grow the
      number of rooms in our installed
base;
  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;
  8
 Index
  v
              wireless
      video on demand (VOD) availability;
and
  v
              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.
  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; and
  v
              We
      have begun to consider expansion into the Caribbean and European hotel
      industry, as well as other infrastructure and value added
      services.
  Ultimately,
we hope to position ourselves as our customers' central communications 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
June 23, 2008, our direct sales force consisted of 3 persons and our channel
sales program consisted of 1 master sales agent and 2 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. 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.
  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.
  9
 Index
  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.
  10
 Index
  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 have substantially 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. Furthermore, these competitors may be
able to adopt more aggressive pricing policies and offer customers more
attractive terms than we can. In addition, we have established strategic
relationships with many of our potential competitors. In the event such
companies decide to compete directly with us, such relationships would likely be
terminated, which could have a material adverse effect on our business and
reduce our market share or force us to lower prices to unprofitable
levels.
  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.
  11
 Index
  EMPLOYEES
  As of
June 23, 2008 we had a total of 19 full-time personnel consisting of 11
employees, 3 US independent contractors, and 5 Canadian independent contractors,
and 2 part-time personnel consisting of 1 employee and 1 US independent
contractor. 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.
  ITEM2.
DESCRIPTION OF PROPERTY
  We own no
real 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.
  ITEM3. 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.
  ITEM4.
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, 2006 through June 23,
2008.
  ITEM5. 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.
  12
 Index
  SYMBOL
              TIME
      PERIOD
              
              LOW
              
              
              HIGHRMLX.PK
              January
      1 - March 31, 2005
              
              $
              0.04
              
              
              $
              0.20April
      1 – June 30, 2005
              
              $
              0.03
              
              
              $
              0.10July
      1 - September 30, 2005
              
              $
              0.02
              
              
              $
              0.07October
      1 - December 31, 2005
              
              $
              0.01
              
              
              $
              0.02January
      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
              
              
              $
              0.03RMLXP
              January
      1 - March 31, 2005
              
              $
              0.06
              
              
              $
              0.08April
      1 – June 30, 2005
              
              $
              0.06
              
              
              $
              0.07July
      1 - September 30, 2005
              
              $
              0.07
              
              
              $
              0.07October
      1 - December 31, 2005
              
              $
              0.07
              
              
              $
              0.07January
      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
              
              
              $
              0.08
  The
closing bid for our Common Stock on the OTB-Bulletin Board on June 23, 2008 was
$0.0275. As of June 23, 2008, 151,892,050 shares of Common Stock were issued and
outstanding which were held of record by 274 persons. As of June 23,2008,
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, 2006 accrued but unpaid preferred stock dividends
aggregated $107,400. 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.
  13
 Index
  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.
  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.
  14
 Index
  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.
  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.
  1,962,500
              
              shares
      with an exercise price of $0.02500,000
              
              shares
      with an exercise price of $0.02500,000
              
              shares
      with an exercise price of $0.027,000,000
              
              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.
  15
 Index
  On
January 1, 2008, the Board approved issuance of 1,437,041 shares of our common
stock, as interest for the fourth quarter of 2007, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.
  On April
1, 2008, the Board approved issuance of 1,386,885 shares of our common stock, as
interest for the first quarter of 2008, pursuant to the clauses outlined in the
convertible debenture agreements of June 11, 2007.
  All of
the shares of common stock approved for issuance in connection with interest
payments on the debentures as provided above were issued in the second quarter
of 2008.
  On April
14, 2008, we issued to Creative Hospitality Associates (“CHA”) a Warrant
pursuant to a sales agent agreement with CHA (the “Agreement”).
  The
Warrant is initially exercisable for Series B Preferred Stock.  At such
time as we have a sufficient number of shares of Common Stock authorized to
permit the exercise of the Warrant for Common Stock (the “Triggering Event”),
the Warrant will automatically be exercisable for Common Stock and not Series B
Preferred Stock.  The maximum number of shares of Common Stock for which
the Warrant is ultimately exercisable for is 15,000,000 and the ultimate
exercise price per share of Common Stock for which the Warrant is exercisable is
$0.02 per share, each of which is subject to adjustment and the conditions
contained in the Warrant.  The Warrant becomes ultimately exercisable for
such 15,000,000 shares of Common Stock pursuant to a vesting schedule as set
forth in the Warrant that provides that the Warrant becomes ultimately
exercisable for 500,000 shares of Common Stock with each 1,000 rooms in a hotel
or other property that CHA or its affiliate introduces to us and in which our
Media and Entertainment System is installed.
  On May
15, 2008, the Registrant’s Board of Directors approved the grant to employees
and consultants, under the Registrant’s Long-Term Incentive Plan, of an
aggregate of 100,000 Incentive Stock Options and an aggregate of 100,000
Non-Qualified Stock Options.  Such options were issued at an exercise
price of $0.017 per share and vest one-third (1/3) on each of the first three
anniversaries of the employment date.
  Each of
the foregoing issuances was a private issuance and exempt from registration
under Section 4(2) of the Securities Act.
  ITEM6.
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:
  16
 Index
  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 full powered pc, 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.
  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.
  17
 Index
  We
currently have signed agreements to install our product into two properties as a
Beta test.  The first property is the Jet Hotel in Downtown Denver and
the second property is a select service property in the Denver Technical Center
managed and owned by a large hotel corporation.
  We
effected the 2004 Reorganization on June 28, 2004, when the Company completed
its merger with Arc Communications Inc. ("ARC"). The transaction has been
accounted for as a recapitalization, which is accounted for similar to the
issuance of stock by Old RoomLinX for the net assets of Arc with no goodwill or
other intangibles being recorded. Concurrent with the closing, ARC changed its
name to RoomLinX, Inc.  RoomLinX is considered the accounting
acquirer; accordingly the historical financial statements are those of
RoomLinX.
  On August
10, 2005, the Company completed its acquisition of SuiteSpeed, Inc.
(“SuiteSpeed.)
  SuiteSpeed,
a privately-held company based in Colorado, provides high speed wireless
internet access solutions to hotels.  SuiteSpeed’s activities are
complimentary to those of the Company and the acquisition of SuiteSpeed will
enhance the breadth and width of the Company’s activities.
  The
acquisition of SuiteSpeed was accounted for as a business combination in
accordance with SFAS No. 141 and SuiteSpeed’s operating results are included in
the Company’s consolidated results of operations since the date of
acquisition.
  CRITICAL
ACCOUNTING POLICIES AND ESTIMATES
  Management's
Discussion and Analysis of Financial Condition and Results of Operations discuss
our financial statements, which have been prepared in accordance with accounting
principles generally accepted in 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.
  18
 Index
  Management
believes the following critical accounting policies, among others, affect its
more significant judgments and estimates used in the preparation of its
consolidated financial statements.
  Our
system sales and installation revenue primarily consists of wired and wireless
network equipment and installation fees associated with the network and is
recognized as revenue when the installation is completed and the customer has
accepted such installation. Our service, maintenance and usage revenue, which
primarily consists of monthly maintenance fees related to the upkeep of the
network, is recognized on a monthly basis as services are provided.
  We
estimate the collectability of our trade receivables. A considerable amount of
judgment is required in assessing the ultimate realization of these receivables,
including analysis of historical collection rates and the current
credit-worthiness of significant customers.
  Work in
progress represents the cost of hardware and software which has been purchased
by us for installation at our customers’ facilities, but has not been accepted
by the customer.
  We
capitalize and subsequently depreciate our property and equipment over the
estimated useful life of the asset. In assessing the recoverability of our
long-lived assets, including goodwill, we must make certain assumptions
regarding the useful life and contribution to the estimated future cash flows.
If such assumptions change in the future, we may be required to record
impairment charges for these assets not previously recorded.
  Since
inception, we have accumulated substantial net operating loss carry forwards for
tax purposes.  There are statutory limitations on our ability to
realize any future benefit from these potential tax assets and we are uncertain
as to whether we will ever utilize the tax loss carry
forwards.  Accordingly, we have recorded a valuation allowance to
offset the deferred tax asset.
  Effective
January 1, 2006, we implemented SFAS No. 123(R), “Share-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.  Prior to January 1, 2006, we applied APB Opinion 25,
“Accounting for Stock Issued to Employees,” and related interpretations in
accounting for all stock option plans.  Under APB Opinion 25, the
intrinsic value method was applied and no compensation expense was recognized
for stock options issued to employees as the exercise price of the stock options
we granted equaled or exceeded the market price of the underlying common stock
on the date of grant.
  FORWARD-LOOKING
STATEMENTS
  19
 Index
  The
statements contained in this annual report (including our statements regarding
future revenue) that are not based on historical fact are "forward- looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. Forward- looking statements may be identified by the use of
forward-looking terminology such as "may," "will," "expect," "estimate,"
"anticipate," "continue," or similar terms, variations of such terms or the
negative of those terms. Such forward-looking statements involve risks and
uncertainties, including, but not limited to: (i) our history of unprofitable
operations, both with respect to our core business and the business previously
performed by Arc Communications, (ii) the significant operating losses that we
have incurred to date, (iii) our lack of liquidity and need for additional
capital which we may not be able to obtain on favorable terms or at all, (iv)
the "going concern" qualification that accompanies our financial statements,
which, among other things, may make it more difficult for us to raise the
additional capital that we require in order to remain in business, (v) the fact
that we have been required to operate with a working capital deficit, which
limits our operating flexibility and opportunities (vi) the substantially
greater resources available to many of our competitors, (vii) our expectation
that we will continue to operate at a loss for the foreseeable future, (viii)
our lack of capital, which substantially restricts our flexibility and
opportunity to increase our revenues, (ix) the importance to us that our
offerings remain technologically advanced if we are to attract new customers and
maintain existing customers, (x) our dependence on certain key employees and key
suppliers, (xi) risks associated with potential intellectual property claims and
(xii) the impact on our business and industry of general economic conditions and
regulatory developments. Such risks and others are more fully described in the
"Risk Factors" set forth in Exhibit 99.1 to this Annual Report. Our actual
results could differ materially from the results expressed in, or implied by,
such forward- looking statements.
   RESULTS
OF OPERATIONS
  YEAR
ENDED DECEMBER 31, 2006 COMPARED TO YEAR ENDED DECEMBER 31,
2005
  For the
year ended December 31, 2006, we reported net income of $25,529, or $(0.00) per
share, compared to a net loss of $(4,231,806), or $(0.04) per share for
2005.  Our loss from operations for 2006 was $(201,300), an
improvement in operating results of $1,372,438 compared to the operating loss of
$(1,573,738) that we reported for 2005.  As discussed below, we
significantly reduced sales and marketing expenses and general and
administrative expenses during 2006.  That reduction, along with
increased revenue, was a primary factor in the improved results.
  System
sales and installation revenue. System sales and installation revenue
decreased 43% to $747,685 during the year ended December 31, 2006 from
$1,314,835 during the year ended December 31, 2005.  We installed 11
new customers during the year ended December 31, 2006, compared to 28 new
installations during 2005.  This component of our revenue stream is
dependent upon the acquisition of new customers, which can vary from year to
year.  During the year ended December 31, 2006, the average revenue
per installation was approximately $106,812 as compared to $47,000 during the
prior 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.
  20
 Index
  Service,
maintenance and usage revenue. Service, maintenance and usage revenue
increased 45% to $1,465,155 for the year ended December 31, 2006 from $1,008,255
for the year ended December 31, 2005. The increase was due to an increase
in the number of customers we service on a recurring basis to a total of
188 customers (representing 34,197 rooms) compared to 193 customers
(representing 28,454 rooms) as of December 31, 2005.  Average monthly
revenue per room during 2006 was $3.57, compared to $3.52 during 2005, an
increase of 1.4%.
  Backlog.
As of December 31, 2006, we had two customer installations in progress, both of
which were completed during the first quarter of 2007.  As of December
31, 2006, there were 44 service contracts scheduled to conclude during
2007.  Approximately two-thirds of the customers continued their
service with us and approximately one-third of the customers cancelled their
contractual arrangement with us.
  Cost
of system sales and installation. Cost of system sales and installation
decreased 68% to $368,156 for the year ended December 31, 2006 from $1,161,401
for the year ended December 31, 2005. The decrease was primarily attributable to
the decreased corresponding revenue during the year. The average cost of an
installation increased 27% from $41,479 in 2005 to $52,594 in
2006.  Our margin on installations increased to 51% in 2006 from 12%
in 2005.
  Cost
of service, maintenance and usage. Cost of service, maintenance and usage
increased 20% to $1,137,489 for the year ended December 31, 2006 from $948,887
for the year ended December 31, 2005.  The increase is mainly
attributable to increased usage of our system and a higher volume of calls to
our 24x7 support center.
  Sales
and marketing. Sales and marketing expense decreased by $314,317 to
$149,131 during the year ended December 31, 2006 from $463,448 for the year
ended December 31, 2005.  During 2006, we implemented significant
cost-cutting measures.  Such measures included staff reductions
resulting in decreased personnel and personnel related costs of $209,210; a
reduction in travel expenses of $94,498, and a reduction in advertising
expense of $10,609.
  General
and administrative. General and administrative expense decreased by
$642,268 to $526,167 for the year ended December 31, 2006 from $1,168,434 for
the year ended December 31, 2005. During 2006, we implemented significant
cost-cutting measures.  As a result of reduction of staff, personnel
related costs were reduced to $158,852 in 2006 from $751,644 in 2005. Office
related costs such as rent, telephone, insurance and supplies were reduced
$212,791 from $322,997 in 2005 to $110,206 in 2006. These savings were partially
offset by increased professional fees, SEC fees, and investor relations fees of
approximately $128,000 resulting from our various financings, and filings with
regulatory agencies, as well as the estimation of $25,000 of uncollectible
accounts receivable.
  21
 Index
  Depreciation
of property and equipment. Depreciation of property and equipment
decreased to $28,350 for the year ended December 31, 2006 as compared to
$154,658 for the year ended December 31, 2005.  This reduction is
directly attributable to a change in our business model regarding the ownership
of assets located at our customers’ facilities.  Previously, we
retained ownership of the assets until the end of the contract and depreciated
the assets over the life of the contract.  Our new business model
transfers ownership of the assets to the customer at the time of the
installation and therefore, no depreciation expense is recorded as we no longer
own the assets.   Depreciation expense is computed each year
based upon our estimate of the remaining useful lives of the
assets.  Our estimates of useful lives are periodically reviewed and
the shorter of the actual life or the economic life of the assets are
used.
  Other
expense.  In 2005, we reported significant items of other
expense related to our various financings and the impairment of goodwill, as
discussed below.
  Interest
expense. Interest expense increased $49,596 or 15% to $373,569 for the
year ended December 31, 2006 as compared to $323,973 for the year ended December
31, 2005. The increase is attributable to the increase in the principal balance
of outstanding debt and the increase in interest rates and penalties associated
with our inability to retire the debt as it matured.  The additional
debt outstanding during 2006 compared to 2005 included the convertible
debentures issued on March 3, 2005 in the aggregate principal amount of
$1,100,000 (which were outstanding for all of 2006 but only a portion of
2005).
  Impairment
of Goodwill.  There was no impairment of goodwill in 2006
compared to the impairment of $1,074,913 recorded in 2005.  We
recorded goodwill in the acquisition of SuiteSpeed.  Subsequent to the
acquisition, we encountered significant operational and financial
difficulties.  Furthermore, we were unable to obtain the additional
financing that we anticipated subsequent to the acquisition.  These
factors lead us to conclude that the goodwill acquired in the SuiteSpeed
transaction was substantially impaired.  Effective December 31, 2005,
we recorded an impairment of the entire goodwill
balance.
  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 $14,080 for the year ended December 31, 2006 compared to a gain of $13,901
for the year ended December 31, 2005. The amount of gain (loss) will vary based
upon the volume of foreign currency denominated transactions and fluctuations in
the value of the Canadian dollar vis-à-vis the US dollar.  As the
Company moved its corporate headquarters from Canada to the United States during
2004, and continues to decrease the volume of transactions denominated in
Canadian dollars, it is not expected that the foreign exchange gains (losses)
will have a significant impact on the Company in the
future.
  22
 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 $7,740,000 through December 31, 2006. In
addition, on June 28, 2004, we completed our merger with ARC which resulted in
cash contributed from ARC of approximately $711,000, the net proceeds of which
were used to extinguish certain short term liabilities, pay accounts payable,
and pay accrued expenses and for other working capital purposes.  As
of December 31, 2006, and continuing throughout 2007 we were generally unable to
pay our financial obligations as they matured and we were in default of the
provisions of certain indebtedness.
  We have
incurred significant operating losses since our inception and as of December 31,
2006 had a working capital deficiency and stockholder’s deficit of $(2,679,949)
and $(2,667,169), respectively. Although we succeeded in generating net income
of $25,529 in 2006, it did not exceeded the $149,526 used to fund operations,
the cumulative deficiency and deficit raise substantial doubt about our ability
to continue as a going concern.
  As of
December 31, 2006 we had $144,540 in cash and cash equivalents, which amount is
not sufficient to fund operating activities during 2007.  We expect to
be dependent upon other financing sources for the foreseeable
future.  Management has evaluated the Company's alternatives to enable
it to pay its liabilities as they become due and payable in the current year,
reduce operating losses and obtain additional or new financing in order to
advance its business plan. Additional alternatives being considered by
management include, among other things, obtaining financing from new lenders and
the issuance of additional equity and debt. If we raise additional capital
through equity financing, such financing is expected to be dilutive to existing
stockholders. If we raise additional capital through debt financing, such debt
financing may require us to abide by restrictive covenants and will likely be
subject to conversion privileges which will be dilutive to existing
stockholders. We cannot provide any assurance that we will be able to raise
additional funds to enable our operations to continue to the point were we will
maintain a cash flow positive state. At this time, we do not have any bank
credit under which we may borrow funds for working capital or other general
corporate purposes. We have implemented cost reduction measures in the areas of
general and administrative and sales expense, which include reductions in
staff.
  During
the fourth quarter of 2004, we borrowed $250,000 ($120,000 from certain officers
and stockholders) in exchange for 10% promissory notes maturing six months from
the date of issuance.  During the first quarter of 2005, we borrowed
an additional $70,000 ($30,000 from a stockholder) under the same terms and
conditions.  As additional consideration for the lenders, we issued
warrants to purchase 1,600,000 shares of our common stock at $0.10 per share.
During 2005, the Company repaid $40,000 of the notes and the outstanding balance
at December 31, 2005 was $280,000.  The Company was not able to retire
the promissory notes as scheduled and was in default of the repayment
terms.  During 2007, the Company negotiated a settlement with the
lenders.
  23
 Index
  On March
3, 2005, the Company completed a privately placed bridge financing of
convertible debentures (“Debentures”) and warrants.  The Debentures
were issued in the aggregate principal amount of $1,100,000 to 17 investors;
bear interest at 11% per annum; and are due on the earlier of September 2, 2005,
or the date that the Company completes a subsequent financing with gross cash
proceeds of at least $1,000,000.  Net cash proceeds from the
Debentures were $986,000, after deducting fees and expenses paid to Casimir
Capital LLP, the placement agent.  As additional consideration for the
investors, the Company issued warrants to purchase 9,533,333 shares of common
stock at a price of $0.075 per share.  As additional consideration to
Casimir Capital LLP, the Company issued warrants to purchase 1,430,000 shares of
common stock at a price of $0.075 per share.  All of the warrants
expire five years from the date of issue.
  The
Company was unable to retire the Debentures as scheduled on September 2, 2005
and was in default.  During 2007, the Company negotiated a settlement
with the debenture holders.
  As part
of the SuiteSpeed merger, RoomLinX assumed a $300,000 promissory note payable to
the First National Bank of Colorado.  The note bears interest at the
rate of the prime plus 1%, and is payable in monthly principal installments of
$10,000 with the entire remaining balance due on or before September 1,
2006.  The due date of the note was subsequently extended, and the
note was paid in full on June 12, 2007.
  During
2005, the Company borrowed $75,000 from an individual.  The borrowing
bears interest at 10% and is due on demand.  During 2007, the Company
negotiated a settlement with the lender.
  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
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.
  As of
December 31, 2006, we had a working capital deficit of $(2,679,949), comprised
of current assets of $685,468 and current liabilities of
$3,365,416.  Our working capital deficit at December 31, 2005 was
$(2,906,322).  Our working capital position improved during the year
primarily because of our continuing efforts to reduce costs.
  Net cash
used by operating activities was $149,526 for the year ended December 31, 2006
as compared to $873,018 for the year ended December 31, 2005.
  Net cash
provided by investing activities was $0 for the year ended December 31, 2006 as
compared to $10,936 during the year ended December 31, 2005.  During
2005, cash received in the merger with SuiteSpeed was $12,042.  During
2005, we invested $1,106 in expenditures for capital assets, as compared to $0
during 2006.  We do not plan any significant capital expenditures for
2007.
  24
 Index
  Net cash
provided by financing activities was $113,310 for the year ended December 31,
2006 as compared to $1,032,697 for the year ended December 31,
2005.  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.  During 2007, we expect to require additional
cash proceeds from debt and equity financings to fund our operating
losses.
  Prior to
the business combination with ARC, the Company entered into a series of capital
lease transactions with a third party lessor in Canada.  Subsequent to
the business combination, the Company ceased making payments to the lessor and
abandoned the assets under capital leases.  The lessor has not
demanded that the Company make additional payments and the Company believes that
it has meritorious defenses against any claims by the lessor.  The
Company has attempted to negotiate a settlement with the lessor but has been
unable to obtain an unconditional release.
  For
accounting purposes, the Company has determined that it should continue to
report the capital lease obligation as a liability until it either obtains an
unconditional release or the statute of limitations bars collection actions
against the Company.  Accordingly, a current liability of $391,359 has
been included in the financial statements as a potential capital lease
obligation.
  As of
December 31, 2006, our primary financial commitments consisted of $3,515,417
recorded as current liabilities plus future obligations under operating
leases.  Total future payments under operating leases were $61,559 at
December 31, 2006, including $23,921 due during 2007. We continue to actively
seek relief from our financial obligations and commitments.
  As of
June 11, 2007, we reached agreement with certain of our debt holders whereby we
repaid and canceled all prior existing indebtedness (other than bank debt) at a
fifty percent (50%) discount to the outstanding principal amount of such
indebtedness.  The total outstanding principal amount of such
indebtedness immediately prior to such repayment and cancellation was
$1,455,000.  This indebtedness included the following
transactions:
  1.
              The
      March 3, 2005 private placement bridge financing of $1,100,000; all
      penalties and interest were waived and the Company settled for
      $550,000.
 2.
              Officer
      and stockholder notes issued from November 2004 through January 2005
      having an outstanding principal balance of $280,000; all outstanding
      penalties and interest were waived and the Company settled for
      $140,000.
 3.
              During
      2005, the Company borrowed $75,000 from an individual.  The
      borrowing bore interest at 10% and was due on
      demand.  Subsequent to December 31, 2005, the Company negotiated
      a settlement of this borrowing arrangement and repaid $37,500 in full
      satisfaction of its outstanding balance including all outstanding interest
      owed.
  25
 Index
  On June
11, 2007 and June 13, 2007, we sold an aggregate of $2,350,000 principal amount
of Convertible Debentures due May 2012 (the “Convertible Debentures”) to a
number of investors in reliance on Section 4(2) of the Securities Act, and
pursuant to a Securities Purchase Agreement with certain investors (the “June
Purchase Agreement”).
  The
Convertible Debentures are initially convertible into Series B Preferred Stock,
which Series B Preferred Stock will not be convertible into Common Stock until
such time as the Company has sufficient number of shares of Common Stock
authorized to permit the conversion of the Convertible Debentures into Common
Stock, at which time the Convertible Debentures will automatically be
convertible into Common Stock and not Series B Preferred Stock.  The
ultimate conversion price into shares of Common Stock of the Convertible
Debentures is $0.02 per share, subject to certain restrictions contained in the
Convertible Debentures.
  Pursuant
to the June Purchase Agreement, each purchaser also received an option,
exercisable for a six month period from the Closing under the Purchase
Agreement, to purchase additional Convertible Debentures (“Additional
Convertible Debentures”) in an amount up to 50% of the original amount of
Convertible Debentures purchased.  All such options have expired
unexercised.
  The
Convertible Debentures bear interest at an annual rate of six percent (6%),
payable quarterly, either in cash or, at the Registrant’s election, shares of
the Registrant’s capital stock.
  Pursuant
to the terms of the June Purchase Agreement, the Registrant is obligated to
register the shares of Common Stock issued upon conversion of the Convertible
Debentures within one year of the Closing under the June Purchase Agreement or
as soon as the Registrant’s Common Stock is listed on the Over-the-Counter
Bulletin Board, whichever is sooner.
  26
 Index
  Logo
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  Shareholders
and Board of Directors
 RoomLinX,
Inc.
  We have
audited the accompanying balance sheet of RoomLinX, Inc. as of December 31,
2006, and the related statements of operations, stockholders' (deficit), and
cash flows for the years ended December 31, 2006 and 2005.  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,
2006, and the results of its operations, and its cash flows for the years ended
December 31, 2006 and 2005, in conformity with accounting principles generally
accepted in the United States of America.
  The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses and has working
capital and stockholders’ deficits.  These factors raise substantial
doubt about the Company's ability to continue as a going
concern.  Management's plans in regard to these matters are also
discussed in Note 2.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
 Signature
 
 Denver,
Colorado
 June 23,
2008
  27
  ITEM7.
FINANCIAL STATEMENTS
  RoomLinX,
Inc.
 CONSOLIDATED BALANCE
SHEET
 as
of December 31, 2006
 
 ASSETSCurrent
      assets:Cash
      and cash equivalents
              
              $
              144,540Accounts
      receivable, net
              
              
              487,083Prepaid
      and other current assets
              
              
              24,389Work
      in progress
              
              
              29,455Total
      current assets
              
              
              685,467Property
      and equipment, net
              
              
              12,780Total
      assets
              
              $
              698,247LIABILITIES AND
      STOCKHOLDERS' (DEFICIT)Current
      liabilities:Accounts
      payable and accrued expenses
              
              $
              563,600Convertible
      debentures
              
              
              1,100,000Notes
      payable
              
              
              215,000Officer
      and stockholder notes payable
              
              
              287,500Accrued
      interest and penalties
              
              
              496,145Obligations
      under capital lease
              
              
              391,359Deferred
      revenue
              
              
              311,812Total
      current liabilities
              
              
              3,365,416Stockholders'
      (deficit):Preferred
      stock - $0.20 stated value, 5,000,000 shares authorized: 720,000 shares
      issued and outstanding
              
              
              144,000Common
      stock - $0.001 par value, 245,000,000 shares authorized: 139,868,381
      shares issued and outstanding
              
              
              139,868Additional
      paid-in capital
              
              
              19,135,567Deferred
      stock compensation
              
              
              (103,257
              )Accumulated
      (deficit)
              
              
              (21,983,347
              )Total
      stockholders' (deficit)
              
              
              (2,667,169
              )Total
      liabilities and stockholders' (deficit)
              
              $
              698,247
  28
 Index
  RoomLinX,
Inc.
 CONSOLIDATED STATEMENTS OF
OPERATIONS
 for
the years ended December 31, 2006 and 2005
 
 2006
              
              
              2005RevenuesSystem
      sales and installation
              
              $
              747,685
              
              
              $
              1,314,835Service,
      maintenance and usage
              
              
              1,465,155
              
              
              
              1,008,2552,212,840
              
              
              
              2,323,090Costs
      and ExpensesSystem
      sales and installation
              
              
              368,156
              
              
              
              1,161,401Service,
      maintenance and usage
              
              
              1,137,489
              
              
              
              948,887Sales
      and marketing
              
              
              149,131
              
              
              
              463,448General
      and administrative
              
              
              526,166
              
              
              
              1,168,434General
      and administrative  - stock compensation
              
              
              204,848
              
              
              
              -Depreciation
              
              
              28,350
              
              
              
              154,6582,414,140
              
              
              
              3,896,828Operating
      (loss)
              
              
              (201,300
              )
              
              
              (1,573,738
              )Other
      income (expenses)Interest
      expense
              
              
              (373,569
              )
              
              
              (323,973
              )Amortization
      of debt discount
              
              
              -
              
              
              
              (1,159,083
              )Financing
      expenses
              
              
              -
              
              
              
              (114,000
              )Impairment
      of goodwill
              
              
              -
              
              
              
              (1,074,913
              )Foreign
      currency gains (losses)
              
              
              (14,080
              )
              
              
              13,901Other
      income
              
              
              814
              
              
              
              -Income
      from discharge of indebtedness
              
              
              613,664
              
              
              
              -226,829
              
              
              
              (2,658,068
              )Income
      (loss) before income taxes
              
              
              25,529
              
              
              
              (4,231,806
              )Provision
      for income taxes
              
              
              -
              
              
              
              -Net
      income (loss)
              
              $
              25,529
              
              
              $
              (4,231,806
              )Net
      income (loss) per common share:Basic
              
              $
              0.00
              
              
              $
              (0.04
              )Diluted
              
              $
              0.00
              
              
              $
              (0.04
              )Weighted
      average shares outstanding:Basic
              
              
              133,462,902
              
              
              
              115,593,903Diluted
              
              
              176,975,870
              
              
              
              115,593,903
  29
 Index
  RoomLinX,
Inc.
 CONSOLIDATED STATEMENTS OF
CASH FLOWS
 for
the years ended December 31, 2006 and 2005
 
 2006
              
              
              2005Cash
      flows from operating activities:Net
      income (loss)
              
              $
              25,529
              
              
              $
              (4,231,806
              )Adjustments
      to reconcile net income (loss) to net cash used in operating
      activities:Depreciation
              
              
              28,350
              
              
              
              154,658Impairment
      of goodwill
              
              
              -
              
              
              
              1,074,913Amortization
      of debt discount
              
              
              -
              
              
              
              1,159,083Non-cash
      financing costs
              
              
              -
              
              
              
              114,000Common
      stock issued for operating costs
              
              
              140,000
              
              
              
              122,000Stock
      options issued as compensation
              
              
              204,848
              
              
              
              -Changes
      in operating assets and liabilities:Accounts
      receivable
              
              
              (376,456
              )
              
              
              225,351Inventory
      and work in progress
              
              
              (29,455
              )
              
              
              138,522Prepaid
      and other current assets
              
              
              14,460
              
              
              
              12,629Accounts
      payable and accrued expenses
              
              
              (718,445
              )
              
              
              176,862Deferred
      revenue
              
              
              294,743
              
              
              
              180,770Accrued
      interest and penalties
              
              
              266,900
              
              
              
              -Obligations
      under capital lease
              
              
              75,810
              
              
              
              -Total
      adjustments
              
              
              (99,245
              )
              
              
              3,358,788Net
      cash (used in) operating activities
              
              
              (73,716
              )
              
              
              (873,018
              )Cash
      flows from investing activities:Purchase
      of property and equipment
              
              
              -
              
              
              
              (1,106
              )Cash
      received in the merger
              
              
              -
              
              
              
              12,042Net
      cash provided by investing activities
              
              
              -
              
              
              
              10,936Cash
      flows from financing activities:Cash
      proceeds from convertible debentures
              
              
              -
              
              
              
              986,000Principal
      payments on convertible debenture
              
              
              -
              
              
              
              (10,000
              )Cash
      proceeds from notes payable
              
              
              150,000
              
              
              
              75,000Principal
      payments on notes payable
              
              
              (120,000
              )
              
              
              (48,303
              )Cash
      proceeds from officer and stockholder notes payable
              
              
              7,500
              
              
              
              70,000Principal
      payments on officer and stockholder notes payable
              
              
              -
              
              
              
              (40,000
              )Net
      cash provided by financing activities
              
              
              37,500
              
              
              
              1,032,697Net
      increase (decrease) in cash and equivalents
              
              
              (36,216
              )
              
              
              170,615Cash
      and equivalents at beginning of year
              
              
              180,756
              
              
              
              10,141Cash
      and equivalents at end of year
              
              $
              144,540
              
              
              $
              180,756Supplemental
      Cash Flow InformationInterest
      paid
              
              $
              18,393
              
              
              $
              8,381Income
      taxes paid
              
              $
              -
              
              
              $
              -Non-cash
      investing and financing activities:Common
      stock issued  in SuiteSpeed, Inc. merger
              
              $
              -
              
              
              $
              557,077Liabilities
      assumed in SuiteSpeed, Inc. merger
              
              $
              -
              
              
              $
              684,605Common
      stock issued  in exchange for debt
              
              $
              -
              
              
              $
              170,000Warrants
      issued in connection with debt
              
              $
              150,000
              
              
              $
              -
  30
 Index
  RoomLinx,
Inc.
 CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)
 For
the year ended December 31, 2006 and 2005
 
 Preferred 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, 2004
              
              
              720,000
              
              
              $
              144,000
              
              
              
              103,991,799
              
              
              $
              103,992
              
              
              $
              16,617,261
              
              
              $
              -
              
              
              $
              (17,777,070
              )
              
              $
              (911,817
              )Fair
      value of warrants issued in connection with officer and stockholder notes
      payable
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              7,000
              
              
              
              -
              
              
              
              -
              
              
              
              7,000Shares
      issued for services at $0.24 per share
              
              
              -
              
              
              
              -
              
              
              
              375,000
              
              
              
              375
              
              
              
              89,625
              
              
              
              -
              
              
              
              -
              
              
              
              90,000Fair
      value of beneficial
      conversion  feature  and  warrants issued in
      connection with convertible debentures
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,100,000
              
              
              
              -
              
              
              
              -
              
              
              
              1,100,000Shares
      issued for services at $0.10 per share
              
              
              -
              
              
              
              -
              
              
              
              75,000
              
              
              
              75
              
              
              
              7,425
              
              
              
              -
              
              
              
              -
              
              
              
              7,500Shares
      issued for cancellation of warrants in connection with a settlement
      agreement at $0.03 per share
              
              
              -
              
              
              
              -
              
              
              
              666,666
              
              
              
              666
              
              
              
              19,334
              
              
              
              -
              
              
              
              -
              
              
              
              20,000Shares
      issued in connection with a settlement agreement at $0.03 per
      share
              
              
              -
              
              
              
              -
              
              
              
              150,000
              
              
              
              150
              
              
              
              4,350
              
              
              
              -
              
              
              
              -
              
              
              
              4,500Shares
      issued in merger with SuiteSpeed, Inc.  on August 10,
      2005
              
              
              -
              
              
              
              -
              
              
              
              21,426,046
              
              
              
              21,426
              
              
              
              535,651
              
              
              
              -
              
              
              
              -
              
              
              
              557,077Shares
      issued for cancellation of note payable to stockholder
              
              
              -
              
              
              
              -
              
              
              
              6,183,870
              
              
              
              6,184
              
              
              
              163,816
              
              
              
              -
              
              
              
              -
              
              
              
              170,000Net
      (loss)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (4,231,806
              )
              
              
              (4,231,806
              )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  and  warrants issued in
      connection with notes 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
              )
  31
 Index
  ROOMLINX,
INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2006
  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 Presentation:    On June 28, 2004, the Company
completed its merger with Arc Communications Inc. ("ARC"). As a result of the
merger, the stockholders of RoomLinX prior to the merger owned 68,380,180 shares
of common stock of the Company and at the effective time of the merger, the
stockholders of ARC prior to the merger received 34,444,952 shares of common
stock.  The stockholders of RoomLinX before the merger also received
warrants to purchase an additional 11,465,001 shares of common stock of the
Company.  The transaction has been accounted for as a
recapitalization, which is accounted for similar to the issuance of stock by
RoomLinX for the net assets of ARC with no goodwill or other intangibles being
recorded. Concurrent with the closing, ARC changed its name to RoomLinX,
Inc.  RoomLinX is considered the accounting acquirer; accordingly the
historical financial statements presented herein for the periods prior to the
merger are those of RoomLinX.
  Reclassifications
  Certain
amounts for the year ended December 31, 2005 or as of December 31, 2005 have
been reclassified to conform to current year’s presentation.
  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.
  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.
  Inventories:    Inventory,
principally wireless devices related to Wi-Fi installations, is stated at the
lower of cost (first-in, first-out) basis or market.  Inventories are
recorded net of any reserve for excess and
obsolescence.
  32
 Index
  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.  No profits have been
recognized with respect to work in progress.
  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:
  Office
      furniture and equipment
              5
      to 10 yearsComputer
      hardware and software
              3
      years
  Goodwill:    Goodwill
represents the excess purchase price over the fair value of net assets acquired,
or net liabilities assumed, in a business combination. The Company periodically
assesses its intangible assets, including goodwill, for indications of
impairment. Based on this assessment, the Company recorded an impairment charge
of $1,074,913 during the year ended December 31,
2005.
  Property
Retirement Obligation:    The Company implemented
SFAS 143, "Accounting for Asset Retirement Obligations," effective
January 1, 2003. SFAS 143 requires the fair value of a liability for
an asset retirement obligation to be recognized in the period that it is
incurred if a reasonable estimate of fair value can be
made.
  The
associated asset retirement costs are capitalized as part of the carrying amount
of the long-lived asset. The Company has determined that it has no property
retirement obligations as of December 31, 2006.
  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.  Prior to January 1, 2006, we applied APB Opinion 25,
“Accounting for Stock Issued to Employees,” and related interpretations in
accounting for all stock option plans.  Under APB Opinion 25, the
intrinsic value method was applied and no compensation expense was recognized
for stock options issued to employees as the exercise price of the stock options
we granted equaled or exceeded the market price of the underlying common stock
on the date of grant.
  33
 Index
  Per
Share Amounts:    The Company computes net income
(loss) per share under the provisions of SFAS No. 128, “Earnings per Share”
(SFAS 128).  Under the provisions of SFAS 128, basic net income (loss)
per share is computed by dividing the Company’s net income (loss) for the period
by the weighted-average number of shares of common stock outstanding during the
period.  Diluted net income (loss) per share excludes potential common
shares if the effect is anti-dilutive.  Diluted net income (loss) per
share is determined in the same manner as basic net income (loss) per share
except that the number of shares is increased assuming exercise of dilutive
stock options and warrants using the treasury stock method and shares issuable
upon conversion of convertible debt and adding back to net income (loss) the
related interest expense.  As the Company had a net loss for the year
ended December 31, 2005, the impact of the assumed exercise of stock options and
warrants was anti-dilutive and as such, these amounts have been excluded from
the calculation of diluted loss per share.
  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.
  Deferred
Revenue:    Deferred revenue is primarily comprised
of advanced billings and customer deposits for installations, service and
usage.
  34
 Index
  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,
2006.
  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 and payable, accrued liabilities and debt. 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. The Company believes that the financial strength of
these institutions mitigates the underlying risk of loss.  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,
2006 indicated that a valuation allowance was required.  The gross
accounts receivable balance was reduced by $25,294 for doubtful
collections.  The Company had a concentration of credit risk in
accounts receivable as of December 31, 2006. Three customers accounted for 52%
of accounts receivable, with customer #1 accounting for 26%, customer #2
accounting for 15% and customer #3 accounting for 11%.  These amounts
were collected subsequent to December 31, 2006.
  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.
  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).
  35
 Index
  Advertising
Costs:   Advertising costs are expensed as
incurred.  During 2006 and 2005, advertising costs were $1,518 and
$15,000, 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.
  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
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 March
2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments
and Hedging Activities-an amendment of FASB Statement No. 133." Constituents
have expressed concerns that the existing disclosure requirements in FASB
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities,
do not provide adequate information about how derivative and hedging activities
affect an entity’s financial position, financial performance, and cash flows.
SFAS No. 161 requires enhanced disclosures about an entity’s derivative and
hedging activities and thereby improves the transparency of financial reporting.
This Statement is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. This Statement encourages, but does not require, comparative
disclosures for earlier periods at initial adoption. The adoption of FASB 161 is
not expected to have a material impact on the Company’s financial position.
 
 In May
2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles." The current GAAP hierarchy, as set forth in the American
Institute of Certified Public Accountants (AICPA) Statement on Auditing
Standards No. 69, The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles, has been criticized because (1) it is directed
to the auditor rather than the entity, (2) it is complex, and (3) it ranks FASB
Statements of Financial Accounting Concepts. The FASB believes that the GAAP
hierarchy should be directed to entities because it is the entity (not its
auditor) that is responsible for selecting accounting principles for financial
statements that are presented in conformity with GAAP. Accordingly, the FASB
concluded that the GAAP hierarchy should reside in the accounting literature
established by the FASB and is issuing this Statement to achieve that result.
This Statement is effective 60 days following the SEC’s approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, The Meaning of
Present Fairly in Conformity With Generally Accepted Accounting Principles. The
adoption of FASB 162 is not expected to have a material impact on the Company’s
financial position.
  36
 Index
  2.           
Going Concern
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. However, the Company has incurred
significant operating losses since its inception and, as of December 31, 2006,
had a working capital deficit of $(2,679,949), an accumulated deficit of
$21,983,347, and a stockholders' deficit of $(2,667,169).  These
conditions, among others, raise substantial doubt about the Company’s ability to
continue as a going concern.  Management has evaluated the Company's
alternatives to enable it to pay its liabilities as they become due and payable,
reduce operating losses and obtain additional or new financing in order to
advance its business plan.  Additional alternatives being considered
by management include obtaining financing from new lenders and the issuance of
additional equity. Additionally, the Company has implemented cost reduction
measures to reduce operating costs and improve profitability.  There
can be no assurance that management will be successful in its
efforts.
  The
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amount
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
  3.         
  SuiteSpeed, Inc.
 On August
10, 2005, the Company entered into an Agreement and Plan of Merger (the “Merger
Agreement”) by and among the Company, a wholly-owned subsidiary of the Company
(“Subcorp”) and SuiteSpeed, Inc. (“SuiteSpeed”) pursuant to which, concurrent
with the execution of the Merger Agreement (a) Subcorp merged with and into
SuiteSpeed, (b) SuiteSpeed became a wholly-owned subsidiary of the Company, (c)
the Company issued a total of  21,426,046 shares of its Common Stock
to the stockholders of SuiteSpeed and (d) the Company issued a total of
6,183,870 shares of its Common Stock to SuiteSpeed’s principal stockholder,
Michael Wasik, to cancel $170,000 of indebtedness of SuiteSpeed.
  SuiteSpeed,
based in Colorado, provides high speed wireless internet access solutions to
hotels.  SuiteSpeed’s activities are complimentary to those of the
Company and the acquisition of SuiteSpeed has enhanced the breadth and width of
the Company’s activities.
  37
 Index
  The
acquisition of SuiteSpeed was accounted for as a business combination in
accordance with SFAS No. 141.  The final allocation of purchase price
was $1,241,682, based upon a market value of $0.026 per share for the 21,426,046
shares issued and the assumption of liabilities of $684,605.  The
purchase price was allocated to assets acquired and liabilities assumed based
upon their estimated fair values.  Management used a number of factors
to determine the estimated fair value, including historical performance and
anticipated future usage.  The excess purchase price over the fair
values was recorded as goodwill.  The purchase price was allocated, as
follows:
 Fair
      value of assets acquired:Cash
      and bank balances
              
              $
              12,042Accounts
      receivable
              
              
              82,921Inventory
      and supplies
              
              
              56,077Other
      current assets
              
              
              9,771Property
      and equipment
              
              
              5,958Goodwill
              
              
              1,074,913Total
      assets acquired
              
              
              1,241,682Less
      liabilities assumed:Current
      liabilities
              
              
              (178,643
              )Deferred
      revenues
              
              
              (35,962
              )Notes
      payable
              
              
              (470,000
              )Total
      liabilities assumed
              
              
              (684,605
              )Total
      purchase price
              
              $
              557,077
 
 Pursuant
to the Merger Agreement, Michael Wasik, the majority owner of SuiteSpeed prior
to the merger, assumed the title of Executive Vice President of the Wireless LAN
Division of the Company. At the closing, he entered into an employment agreement
with a two year term providing for a base salary of $150,000 and stock options
covering 1,000,000 shares of the Company’s common stock immediately exercisable
at an option price equal to $0.026 per share.  Mr. Wasik became a
member of the Company’s Board of Directors on September 20, 2005, and its Chief
Executive Officer on November 2, 2005.
  SuiteSpeed’s
operating results are included in the Company’s consolidated results of
operations since the date of acquisition.
  The
following unaudited pro-forma information has been prepared assuming that the
acquisition had taken place at the beginning of the year ended December 31,
2005.  The pro-forma information is not necessarily indicative of the
combined results that would have occurred had the acquisition taken place at the
beginning of the periods, nor is it necessarily indicative of results that may
occur in the future.
  38
 Index
  RoomLinX,
Inc. / SuiteSpeed, Inc.
 Consolidated
Pro forma Statement of Operations (Unaudited)
 2005Revenue
              
              $
              2,875,901Operating
      costs and expenses
              
              $
              4,253,494Operating
      (loss)
              
              $
              (1,377,593
              )Other
      costs and expenses
              
              $
              (2,749,704
              )Net
      (loss)
              
              $
              (4,127,297
              )Net
      (loss) per common share
              
              $
              (0.03
              )Weighted
      average shares outstanding
              
              
              132,386,783
  4.        
   Property and Equipment
 At
December 31, 2006, property and equipment consisted of the
following:
  Computer
      equipment
              
              $
              313,700Office
      furniture and equipment
              
              
              16,774Subtotal
              
              
              330,474Accumulated
      depreciation
              
              
              (317,694
              )Total
              
              $
              12,780
 
 Depreciation
expense for the years ended December 31, 2006 and 2005 was $28,350 and $154,658,
respectively.
  5.        
   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 and
the outstanding balance at December 31, 2006 was $280,000.  The
borrowing arrangement included warrants to purchase 1,600,000 shares of common
stock at $0.10 per share.  Using the Black-Scholes derivative pricing
model, the Company determined that the warrants had a fair value of $69,500,
which has been recorded as a debt discount and additional paid in
capital.  The debt discount was amortized as interest expense over the
six month life of the promissory notes, which includes $59,083 amortized in
2005.
  The
Company was not able to retire the promissory notes as scheduled and, as of
December 31, 2006, was in default of the repayment terms.  Subsequent
to December 31, 2006, all interest and penalties were forgiven, and the notes
were settled for $140,000.
  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.
  6.          
 Notes Payable
  39
 Index
  As part
of the SuiteSpeed merger, RoomLinX assumed a $300,000 promissory note payable to
the First National Bank of Colorado.  The note bears interest at the
rate of the prime plus 1% and is payable in monthly principal installments of
$10,000 with the entire remaining balance due on or before September 1,
2006.  The due date of the note was subsequently extended, and the
note was paid in full on June 12, 2007.  At December 31, 2006, the
outstanding balance was $140,000.
  During
2005, the Company borrowed $75,000 from an individual.  The borrowing
bore interest at 10% and was due on demand.  Subsequent to December
31, 2006, all interest and penalties 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. See Note 10 regarding
warrant value and debt discount. 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.
  7.          
 Convertible Debentures
  On March
3, 2005, the Company completed a privately placed bridge financing of
convertible debentures (“Debentures”) and warrants.  The Debentures
were issued in the aggregate principal amount of $1,100,000 to 17 investors;
bear interest at 11% per annum; and are due on the earlier of September 2, 2005,
or the date that the Company completes a subsequent financing with gross cash
proceeds of at least $1,000,000. The Debentures are convertible prior to
maturity into a maximum of 15,473,332 shares of the Company’s common stock,
based upon a conversion price equal to $0.075 per share of common stock,
including accrued interest through maturity.  Net cash proceeds from
the Debentures were $986,000, after deducting fees and expenses paid to Casimir
Capital LLP, the placement agent.  As additional consideration, the
Company issued warrants to purchase 9,533,333 shares of common stock at a price
of $0.075 per share.  The warrants expire five years from the date of
issue.
  The
Company agreed to pay Casimir Capital LLP a placement agent fee of $99,000 and
reimburse legal and administrative expenses of $15,000.  These
financing costs were recorded as a component of other expense during
2005.  As additional consideration to Casimir Capital LLP, the Company
issued warrants to purchase 1,430,000 shares of common stock at a price of
$0.075 per share.  The warrants expire five years from the date of
issue.
  The
Debentures contain a beneficial conversion feature with an intrinsic value of
$767,442, which was recorded as debt discount and a contribution to
capital.  The value of the warrants was calculated using the Black
Scholes derivative pricing model and a value of $332,558 was allocated to the
warrants.  The warrant value was recorded as a debt discount and a
contribution to capital.  The entire debt discount of $1,100,000 was
amortized over the term of the Debentures and is included as a component of
other expense during 2005.
  40
 Index
  The
Company was unable to retire the Debentures as scheduled on September 2, 2005
and, as of December 31, 2006, was in default of the repayment
terms.  Subsequent to December 31, 2006, all interest and penalties
were forgiven and the debentures were settled for $550,000.
  8.          
 Commitments and Contingencies
  Operating
Leases:    The Company leases its office facilities
under various operating lease agreements having expiration dates through
2010.  Future minimum lease payments for each of the years through
lease expiration are as follows:
  Year2007
              
              $
              23,9212008
              
              
              14,7482009
              
              
              15,1862010
              
              
              7,704Total
              
              $
              61,559
 
 Capital
Lease Obligations:    Prior to the business
combination with ARC, the Company entered into a series of capital lease
transactions with a third party lessor in Canada.  Subsequent to the
business combination, the Company ceased making payments to the lessor and
abandoned the assets under capital leases.  The lessor has not
demanded that the Company make additional payments and the Company believes that
it has meritorious defenses against any claims by the lessor.  The
Company has attempted to negotiate a settlement with the lessor but has been
unable to obtain an unconditional release.
  For
accounting purposes, the Company has determined that it should continue to
report the capital lease obligation as a liability until it either obtains an
unconditional release or the statute of limitations bars collection actions
against the Company.  Accordingly, a current liability of $391,359 has
been included in the financial statements as a potential capital lease
obligation.
  9.        
   Income Taxes
  At
December 31, 2006, the Company has tax loss carry forwards approximating
$6,000,000 that expire at various dates through 2025. 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.
  41
 Index
  The tax
effects of temporary differences that give rise to significant portions of the
deferred tax assets and deferred tax liabilities at December 31, 2006, are
presented below:
  Deferred
      tax assets:Net
      operating loss carryforwards
              
              $
              2,012,112Less
      valuation allowance
              
              
              (2,012,112
              )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 change in the valuation allowance was approximately $78,330 during
2006.
  A
reconciliation of the tax provision for 2006 and 2005 at statutory rates is
comprised of the following components:
   2006
              
              
              2005Tax
      at statutory rates
              
              $
              78,330
              
              
              $
              (1,439,000
              )Book
      to tax adjustments:Impairment
      of goodwill
              
              
              --
              
              
              
              365,000Amortization
      of debt discount
              
              
              --
              
              
              
              394,000Reorganization
      costs
              
              
              --
              
              
              
              --Valuation
      allowance
              
              
              (78,330
              )
              
              
              680,000Tax
      provision
              
              $
              --
              
              
              $
              --
  10.           Stockholders'
(Deficit)
  Preferred
Stock:   The Company has authorized 5,000,000
preferred shares with a $0.20 par value.  The designation of the class
of preferred shares is Class A Preferred Stock.  The preferred stock
is entitled to receive cumulative annual dividends at the rate of 9%, payable in
either cash or additional shares of Class A Preferred Stock, at the option of
the Company.  As of December 31, 2006, there were 720,000 shares of
preferred stock issued and outstanding.  Dividends accrued and unpaid
as of December 31, 2006 were $107,400.
  Common
Stock:   The Company has authorized 245,000,000
shares of $0.001 par value common stock.  As of December 31, 2006,
there were 139,868,381 shares of common stock issued and
outstanding.
  42
 Index
  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.
  On
February 15 2005, the Company issued 250,000 shares of common stock to Rodman
& Renshaw for investment banking services and issued 125,000 shares of
common stock to Stanley Wunderlich for public relations services.  The
375,000 common shares were valued at fair market value of $.24 per
share.  On May 2, 2005, the Company issued 75,000 shares of common
stock to Stanley Wunderlich for additional public relations services, valued at
fair market value of $.10 per share.
  On July
1, 2005, the Company cancelled 666,666 warrants with an exercise price of $0.15
as part of a settlement agreement with Alliance Care Advisors and, in connection
with such settlement agreement, on September 26, 2005, the Company issued
666,666 and 150,000 unregistered shares to Alliance Care Advisors and Manuel
Wilson, respectively, valued at fair market value of $.03 per
share.  Alliance Care Advisors had assisted the Company with its
convertible debt placed with Casimir Capital.
  On August
10, 2005, the Company agreed to issue 21,426,046 shares of common stock to the
shareholders of SuiteSpeed.  These shares were valued at $0.026 per
share, based upon the closing price of the Company’s common stock on August 9,
2005.  An additional 6,183,870 shares of common stock were issued to
Michael S. Wasik in respect to the cancellation of a $170,000 promissory note
payable from SuiteSpeed to Mr. Wasik.
  Warrants:   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 is being amortized over the term of the related
debt.
  On March
5, 2005, the Company issued warrants to purchase 9,533,333 shares of stock to
the 17 debenture holders as additional consideration under the Convertible
Debentures.  On March 5, 2005, the Company also issued warrants to
purchase 1,430,000 shares of stock to Casimir Capital as additional
consideration for services associated with the Convertible Debenture
transaction.  These warrants have an exercise price of $0.075 per
share and expire five years from the date of issue.
  From
November 2004 through January 2005, the Company issued warrants to purchase
1,600,000 shares of common stock to officers and stockholders as additional
consideration under Promissory Notes issued at the same
time.  (1,250,000 warrants were issued during 2004 and 350,000 were
issued during 2005)  These warrants have an exercise price of $0.10
per share and expire two years from the date of issue.
  43
 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$0.030
              
              
              
              3,900,000
              
              
              5
              
              
              $
              117,000$0.075
              
              
              
              10,963,333
              
              
              3
              
              
              $
              822,250$0.100
              
              
              
              350,000
              
              
              <1
              
              
              
              35,000$0.150
              
              
              
              7,666,667
              
              
              <1
              
              
              
              1,150,00022,880,000
              
              
              
              
              
              $
              2,124,250
              
              $0.093
 
 Warrants
              
              Number
      of
                Shares
              
              
              Weighted
      Average Exercise PriceOutstanding
      at January 1, 2005
              
              
              16,430,283
              
              
              $
              0.175Issued
              
              
              11,313,333
              
              
              
              0.076Exercised
              
              
              ---Expired
      / Cancelled
              
              
              (666,666
              )
              
              
              0.150Outstanding
      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
              
              
              $
              0.093
  Options:   In
conjunction with the ARC merger, the Company adopted a long term incentive stock
option plan (the "Stock Option Plan"). The Stock Option Plan provides for the
issuance of 25,000,000 shares of common stock upon exercise of options which may
be granted pursuant to the Stock Option Plan. As of December 31, 2006, options
to purchase 24,400,000 shares were outstanding and 600,000 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
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.
  44
 Index
  On
January 25, 2005, the Company issued options to purchase 500,000 shares of
common stock to each of its Board members, Robert Lunde and Herbert Hunt, as
compensation for Board services.  The options have an exercise price
of $0.10 and vested immediately.  On August 10, 2005, the Company also
issued options to purchase 1,000,000 shares of common stock to Michael S. Wasik
at an exercise price of $0.026 as part of his employment
agreement.  These options also vested immediately.
  Outstanding Stock
Options
 Exercise
      Price
              
              
              Number
      of Shares
              
              
              Remaining
      Contractual Life (in years)
              
              
              Exercise
      Price times Number of Shares
              
              Weighted
      Average Exercise Price$0.026
              
              
              
              1,000,000
              
              
              8
              
              
              $
              26,000$0.010
              
              
              
              6,000,000
              
              
              5
              
              
              
              60,000$0.100
              
              
              
              1,000,000
              
              
              2
              
              
              
              100,000$0.020
              
              
              
              10,000,000
              
              
              9
              
              
              
              200,000$0.080
              
              
              
              600,000
              
              
              <1
              
              
              
              48,000$0.020
              
              
              
              5,800,000
              
              
              10
              
              
              
              116,00024,400,000
              
              
              
              
              
              $
              550,000
              
              $0.025
 
 Options
              
              Number
      of
                Shares
              
              
              Weighted
      Average Exercise PriceOutstanding
      at December 31, 2004
              
              
              6,600,000
              
              
              $
              0.016Granted
              
              
              2,000,000
              
              
              
              0.063Exercised
              
              
              -
              
              
              
              -Expired
              
              
              -
              
              
              
              -Outstanding
      at December 31, 2005
              
              
              8,600,000
              
              
              $
              0.027Granted
              
              
              15,900,000
              
              
              
              0.020Exercised
              
              
              -
              
              
              
              -Expired
              
              
              (100,000
              )
              
              
              0.020Outstanding
      at December 31, 2006
              
              
              24,400,000
              
              
              $
              0.025Exercisable
      at December 31, 2006
              
              
              19,366,667
              
              
              $
              0.026
 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.
  45
 Index
  For the
year ended December 31, 2005, SFAS 123 requires the Company to provide pro-forma
information regarding net income and earnings per share as if compensation cost
for the Company’s stock option plans had been determined in accordance with the
fair value based method prescribed in SFAS 123.  The fair value of the
option grants is 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, 2005: expected life of options of 5 years,
expected volatility of 200%, 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, 2005, approximated $.063 per
option.  Pro-forma net loss for the year ended December 31, 2005 was
$(4,283,806).
  11.            
Subsequent Events
  On
February 8, 2007, Mr. Woody McGee was appointed as a member of our Board of
Directors.  Effective October 12, 2007, Mr. McGee resigned from our
Board of Directors.
  On May 4,
2007, the Registrant’s Board of Directors authorized and approved the following
compensation package for each of Peter Bordes and Herbert Hunt for his service
as an independent director of the Registrant for 2007: (i) the payment of the
sum of $20,000 on December 31, 2007 so long as he is serving as an independent
director 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 he is
serving as an independent director of the Registrant on such
date.  Such compensation was also offered to Mr. Woody McGee; however,
Mr. McGee resigned from the Board of Directors prior to December 31,
2007.
  On June
11, 2007 and June 13, 2007, we closed a financing with certain investors,
pursuant to which we sold an aggregate of $2,350,000 principal amount of
Convertible Debentures due May 2012.  Each investor was also
given the option to purchase additional convertible debentures; however, such
options have expired.
  As of
June 11, 2007, we also reached agreement with certain of our debt holders
whereby we repaid and canceled all prior existing indebtedness (other than bank
debt) at a fifty percent (50%) discount to the outstanding principal amount of
such indebtedness.  The total outstanding principal amount of such
indebtedness immediately prior to such repayment and cancellation was
$1,455,000.  This indebtedness included the following
transactions:
  46
 Index
  1.      The
March 3, 2005 private placement bridge financing of $1,100,000 All penalties and
interest were waived and the Company settled for $550,000.
  2.      Officer
and stockholder notes that were issued from November 2004 through January 2005
that had an outstanding balance of $280,000.  All outstanding
penalties and interest were waived and the Company settled for
$140,000.
  3.      The
note payable from an individual that had an outstanding balance of
$75,000.  All outstanding penalties and interest were waived and the
Company settled for $37,500.
  On June
12,2007,
the $300,000 promissory note assumed during the SuiteSpeed merger and owed to
First National Bank of Colorado was paid in full.
  On June
20, 2007, we issued warrants to four individuals for services
rendered.  The warrants are initially exercisable for shares of Series
B Preferred Stock and ultimately exercisable into shares of common stock once we
have sufficient shares of common stock available for issuance upon
exercise.  The ultimate number of common shares under warrant coverage
is 7,000,000 at $0.03 per share and 2,962,500 at $0.02 per share.  All
of the warrants have a five year term.
  On August
6, 2007, we issued 7,500,000 shares of our common stock, as compensation for
services rendered to, or the settlement of obligations owed by, the
Company.
  On
November 5, 2007, the Registrant’s Board of Directors approved the grant to
employees and consultants, under the Registrant’s Long-Term Incentive Plan, of
an aggregate of 1,450,000 Incentive Stock Options and an aggregate of 800,000
Non-Qualified Stock Options.  Such options were issued at an exercise
price of $0.015 per share and vest one-third (1/3) on each of the first three
anniversaries of the employment date.
  On
October 1, 2007, the Board approved issuance of 1,699,726 shares of our common
stock, as interest for the third quarter of 2007, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.
  On
January 1, 2008, the Board approved issuance of 1,437,041 shares of our common
stock, as interest for the fourth quarter of 2007, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.
  On April
1, 2008, the Board approved issuance of 1,386,885 shares of our common stock, as
interest for the first quarter of 2008, pursuant to the clauses outlined in the
convertible debenture agreements of June 11, 2007.
  On April
14, 2008, we issued to Creative Hospitality Associates (“CHA”) a Warrant
pursuant to a sales agent Agreement with CHA (the “Agreement”).
  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.
  ITEM8.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
  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 to perform the review
of the financial statements for the period ended September 30, 2005 and to
perform the audit of our financial statements for the year ended December 31,
2005.  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.
  ITEM8A.CONTROLS AND PROCEDURES
  The
Company is required to maintain disclosure controls and procedures (as defined
in Rule 13A-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934,
as amended) that are designed to ensure that information required to be
disclosed in our periodic reports filed under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and that such information is accumulated and communicated
to our management, including our principal executive/financial officer, to allow
timely decisions regarding required disclosure.
  48
 Index
  Our
management has conducted an evaluation under the supervision of our current
Chief Executive Officer of the effectiveness of the design and operation of our
system of disclosure controls and procedures pursuant to the Exchange Act as of
December 31, 2006.  Based upon that evaluation, our current Chief
Executive Officer concluded that the Company’s disclosure controls and
procedures were not effective, as of December 31, 2006.
  Specifically,
our current Chief Executive Officer noted the following material weaknesses as
of such date:  our inability, due to lack of capital resources, to
hire and retain personnel with background and training to fulfill the role
of  Chief Financial Officer of a publicly traded company and the
inability to devote the personnel resources necessary to timely prepare and file
financial reports; we did not maintain a consistent system of maintaining
corporate accounting records, which resulted in significant difficulty in
retrieving documents for our audits; our lack of documentation to support
entries made to the general ledger; our lack of documentation regarding
calculations for deferred revenue and depreciation and amortization; our lack of
documentation and failure to review financial instruments to determine treatment
as a derivative; and our failure to maintain controls to verify that ledger
accounts accurately reflected the balances in the underlying
documents.
  Our
management concluded that the material weaknesses described above could result
in material misstatements of substantially all of our financial statement
accounts which would result in a material misstatement of our annual or interim
consolidated financial statements that would not be prevented or detected on a
timely basis.  Accordingly, we implemented corrective activities, including
the performance of additional procedures by management designed to ensure the
reliability of our financial reporting.  We believe that the consolidated
financial statements in this Report fairly present, in all material respects,
our financial position, results of operations, and cash flows as of the dates,
and for the periods presented, in conformity with GAAP.
 
 After
identifying the existence of the material weaknesses, we began a
process
 to
remediate the identified material weaknesses.  That process includes (a)
allocating additional capital resources to the accounting and financial
reporting function, (b) certain personnel changes, (c) consultation with
advisors who have the background and training to implement and maintain an
effective system of internal control and financial reporting, (d) increased
corporate focus on key accounting controls and processes, including
documentation requirements; (e) additional training for accounting personnel,
(f) ) the implementation of more rigorous period-end financial reporting
policies and processes involving journal-entry approval, supporting
documentation, account reconciliations, and officer
review.
  49
 Index
  The
remediation plan, once fully implemented and operational, is expected to result
in the correction of the identified material weaknesses in internal control over
financial reporting.
  ITEM8B. OTHER
INFORMATION
  None
  ITEM9.
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 May 10, 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
              
              PositionPeter A. Bordes,
      Jr.
              
              45
              
              Chairman
      of the Board of DirectorsMichael S. Wasik
              
              39
              
              Chief
      Executive Officer, Chief Financial Officer, and
DirectorHerbert I. Hunt,
      III
              
              51
              
              Director
  Peter A. Bordes,
Jr., has served as the Company's chairman since June 28, 2004. Prior,
Mr. Bordes was chief executive officer of Arc Communications, Inc. from
July 2003 through April 2004 and a director of Arc from September 2002 through
June 28, 2004, the date of the 2004 Reorganization. Mr. Bordes is currently the
CEO and founder of MediaTrust Inc. a convergent integrated online media and
marketing company that develops unique, highly customized, cost-effective
solutions for advertisers, marketers and publishers.  Prior to
MediaTrust Mr. Bordes was a founder and Chairman of the Board of Empire Media
inc., a publishing, marketing and technology enterprise based in New
York.
  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.
  50
 Index
  Herbert
I. Hunt, III, has been a director of RoomLinX since May 2000. Mr. Hunt joined
R.M. Wax & Associates, an international search firm focusing in corporate
finance, in 1984. In 1992, he founded H.I.Hunt & Company and, as principal,
has developed (from 1992 through the present) a leading financial services
search firms in both the US and UK marketplaces. Mr. Hunt has been retained by
many of the country's financial services firms to fill key personnel positions.
Mr. Hunt is a well-known figure amongst the professional investment community in
both Boston and New York. He sits on the board of directors of several private
companies.
  AUDIT
COMMITTEE
  The
Company has an Audit Committee of the Board of Directors, the current members of
which are Peter A. Bordes, Jr. and Herbert I. Hunt III.
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:
  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.
  51
 Index
  ITEM10. 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, 2006 and (ii) each other individual that served
as an executive officer at the conclusion of the fiscal year ended December 31,
2006 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
              2006
              
              
              75,000
              
              
              
              
              
              
              
              
              
              75,000CEO
      and CFO
              2005(8/10/05-10/15/05)
              
              
              150,000
              
              
              
              
              
              
              
              
              
              150,0002005(10/15/05-12/31/05)
              
              
              75,000
              
              
              
              
              
              
              
              
              
              75,000Aaron
      Dobrinsky
              2006
              
              
              0
              
              
              
              
              
              
              
              
              
              0Former
      CEO
              2005
              
              
              200,000
              
              
              
              
              
              
              
              
              
              200,000Frank
      Elenio
              2006
              
              
              0
              
              
              
              
              
              
              
              
              
              0Former
      CFO
              2005
              
              
              125,000
              
              
              
              
              
              
              
              
              
              125,000
  52
 Index
  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.
  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, 2006)
 
 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
              
              
              10/30/2010Michael
      S. Wasik
              
              
              
              10,000,000
              
              
              
              10,000,000
              
              
              
              0.020
              
              
              11/20/2013
  53
 Index
  Director Compensation Table
– Fiscal Year-End December 31, 2006
  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
              
              
              
              60,000
              
              
              
              20,000
              
              
              
              
              
              
              50,000Peter
      Bordes
              
              
              
              60,000
              
              
              
              20,000
              
              
              
              
              
              
              50,000Aaron
      Dobrinsky
              
              
              
              20,000
              
              
              
              10,000
              
              
              
              
              
              
              20,000
  ITEM11.
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 May 10, 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 May 10, 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
STOCK
  Shares
      Beneficially OwnedName
      and Address
              
              Number
              
              
              Percent*Michael S. Wasik
      **
              
              
              33,900,231
              
              
              
              22.32
              %2925
      N. Torrey’s PeakSuperior CO 80027Herbert I. Hunt,
      III
              
              
              8,234,612
              
              
              
              5.42
              %***H.I.
      Hunt & Company, LTD.2
      Avery St., #30-GBoston, Massachusetts 02111Peter A. Bordes,
      Jr.
              
              
              9,824,148
              
              
              
              6.47
              %****62
      White StreetSuite
      3 EastNew
      York, New York 10013All
      directors and current executive officers as a group (3
      persons)
              
              
              51,958,991
              
              
              
              34.21
              %
  54
 PREFERRED
STOCK
 Shares
      Beneficially Owned NumberName
      and Address
              
              Number
              
              
              Percent*Herbert I. Hunt,
      III
              
              
              0
              
              
              
              0
              %H.I.
      Hunt & Company, LTD.P.O.
      Box 120220 Boston, Massachusetts 02112-0220Peter A. Bordes,
      Jr.
              
              
              0
              
              
              
              0
              %62
      White StreetSuite
      3 EastNew
      York, New York 10013Michael S. Wasik
              
              
              0
              
              
              
              0
              %2925
      N. Torrey’s Peak DrSuperior,
      CO 80027All
      directors and current executive officers as
      a group (3 persons)
              
              
              0
              
              
              
              0
              %
  *
              Based
      on 151,892,050 shares of Common Stock and 720,000 shares of Preferred
      Stock issued and outstanding as of June 23,
  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
      expire on November 20, 2011, of which 8,666,666 are vested and the
      remainder will vest on August 10, 2008 if Mr. Wasik remains employed by
      the Company on such dates.
  ***
              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.
  55
 Index
  ****
              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.
   ITEM12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  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
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.
  On
November 20, 2006, the Registrant’s Board of Directors approved the grant, under
the Registrant’s Long-Term Incentive Plan, of an aggregate of 11,400,000
Incentive Stock Options (“ISOs”) and an aggregate of 3,700,000 Non-Qualified
Stock Options (“NQOs”).  10,000,000 of the ISOs were granted to Mr.
Wasik, the President, Chief Executive Officer and Chief Financial Officer of the
Registrant, of which (i) 6,000,000 vest 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
vest 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.
  56
 Index
  ITEM13.
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.
  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.
  57
 Index
  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.
  *31.1Certification 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
  *32.1Certification 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
  *99.1Risk
Factors
  99.2
  ITEM14.
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, 2006, 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, 2006, were $35,000.
  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, 2006 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 2006
audit, Stark Winter Schenkein & Co LLC’s engagement and engagement letter
were approved by the Company's Board of Directors.




58
 Index




Signatures
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 RoomLinX,
      Inc.By:
              /s/ Michael S.
      WasikMichael
      S. WasikChief
      Executive OfficerDate:
              7/1/08
 
 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/ Peter A. Bordes,
      Jr.Peter
      A. Bordes, Jr.Chairman
      of the Board of DirectorsDate:
              7/1/08By:
              /s/ Michael S.
      WasikMichael
      S. WasikChief
      Executive Officer,Chief
      Financial Officer and DirectorDate:
              7/1/08By:
              /s/ Herbert I. Hunt,
      IIIHerbert
      I. Hunt, IIIDirectorDate:
              7/1/08






59